Ramiz: ‘DAE was murdered’
The local airline Dutch Antilles Express (DAE) was on its way to implement its fourth phase of the project of recovery. Finally all hurdles were overcome with the intentional delays of the Curacao Civil Aviation Authorities (CCAA) under the grip of Giselle Hollander. The airline had received all 3 ATR’s 72-200 and its entire 3 MD 83 fleet. With its 3 F100, the airline had 9 aircrafts that would have made its expansion possible. For months, the company was hiring staff and crews to be well prepared for what promised to be an excellent last 6 month of 2013.
Today the airline is history and close to 50 thousands passengers were stranded unable to travel to the U.S. alone and over 21 thousands passengers were stranded from August 30 to December 2013. In Venezuela between 25 thousands passengers with booked and purchased tickets but were unable to travel due to INAC’s sanctions on the airline and the rest to Santo Domingo, Aruba, Bonaire, Sint Maarten and Surinam.
The majority of the 300 plus employees are still out of a job many lost their homes and today are sleeping in their cars. Others moved in with families and only a few have found a job at the other airline regardless of the assurance from two Ministers (Palm and Balborda ) that they will all be taken by Insel Air. What happened? A bad business model? Unqualified management? Under funded? Wrong type of equipment? Or was DAE murdered?
DAE’s business model was the correct one. Curaçao is too small as a country to be able to generate the passengers needed so the model of hub and spoke was the correct one. The airport at Hato did not help to facilitate a pleasant connection for the hub but DAE was told that once it reached1.8 million passengers they would expand. DAE was not a low cost airline. It was certainly not when we arrived and it would take time to transition to one. DAE was well on its way to change the reservation system to one with lower cost for distribution (1/3 of the cost), web base system scheduled for implementation starting December 2013. The web page was completely rebuild to a more user friendly and fast one supported by a division of Iberia with a new team of E-Marketing, well trained on social media marketing skills based in Miami which was ready to increase DAE’s direct sales, reducing our dependency on travel agencies and reducing our pay commissions cost of sale. DAE was on its way to be at the leading edge of Airline Ecommerce and E-Marketing vital in today’s airline industry.
The ATR’s were the aircraft type needed for the inter island, Venezuela and the Caribbean gateways in Colombia like Cartagena Barranquilla and Santa Marta. The F-100, while not the aircraft desired by the new management, it was what we found and we increased the fleet with one more. The F100 is the right size, fuel efficient aircraft with 600gls per flight hour compared to the MD83’s 1,100gls, 100 seats makes it the right size aircraft for our business model of daily Santo Domingo, twice a day Sint Maarten and daily Surinam. The F-100 is the right size aircraft to open new routes and DAE planned to use them to open Colombia, Central America and Cuba as well as Jamaica with a minimum of 3 frequencies a week to each destination except Cuba that was planned for once a week. The F-100 would have been replaced in 2014. We were already talking to GE Capital to replace them with A-319. The MD, while the fuel consume is approximately 33% more than the A320, nonetheless the capital cost is less and makes it a right type of aircraft to start with. Falcon which was operating the MD’s to USA for DAE was already in talks with GE to replace them in 2013 for the USA operations. The savings in fuel alone would have justified the investment and it will give the customer a better product. “We have to remember that management took this challenge and had to run and expand in order to face the inhered debt from the previous management and had to start generating revenues and profits fast in order to start paying those negotiated and reduced debts after the grace period given by the existing creditors was over. We knew that we had to grow and run fast. We had no time to re-fleet before starting. Some say that it is easier to plant a tree and see it grow than try to strait one that was born crooked. So we must assumed that we had the right fleet for a transition time,” according to Nelson Ramiz.
DAE, since its early days, was a fat cow that everyone came and sucked its milk and blood. We found an excellent staff but very weak management with the exception of one person, Steve Sloop. I should have cleaned the table on day one. There is two ways of doing aviation today, the old way and the new way. We found that the management had all the vices of the old times. I leave it there. There is no sense to clean the floor with anyone but it was no culture of safety, no ownership culture and no team play. It was everyone for itself as pirates. It took more than a year to get ready of the last prehistoric obstacle and be able to form an excellent team. I feel content that finally when we entered 2013 we had a team in place committed to safety; team play with the concept of ownership well defined and with a vision and mission to help us achieve our destination. It took time but regardless the limitations in Curaçao we had the team needed to take DAE beyond the fourth stage of our plan; Expansion.
DAE was funded with 7 million dollars of additional bank loans. These were treated as long term debts that DAE will start paying in the middle of 2013 and 10 millions of lending by Falcon in flying time and other lending. “Guarantees were extended by Falcon to DAE to obtain fuel lines of credits and the ATR aircrafts. It was made clear to all parties that the new management would not inject cash for working capital or to pay old inherited debts from previous managements. All old debts were negotiated and all commercial large debts were reduced by discount obtained during negotiations. DAE entered 2013 healthier and with the right equipment to expand and meet its planned goals,” Ramiz indicated.
Murder? Regularly in a murder case the prime suspect is the one that benefits from the victim’s disappearance. You don't have to be Sherlok Holmes to guess who the mastermind was here.
“No one talks about the financial issues that the other airline is having. Everybody knows about their mounting debts in Curaçao and internationally and something needed to be done fast in order to help the establishment to keep their investments in the other Curaçao airline. Some from the establishment bet and financially supported a political party with a condition they would name the Minister of Transportation. While all this was happening in Curaçao, in Venezuela a deal was made with a General that has a taste for luxury. The General was to revoke DAE’s permit in Venezuela. Something unheard of since it would violate every treaty signed between the two nations, but the corrupted General knew that his days were counted in that office and before he was taken out he needed to do his job to get his payment and the Curaçao Minister’s jobs was to just don't do anything leaving DAE to solve what they knew could not be solved without the involvement of the Curaçao Government. Treaties are signed between nations. Any disputes needed the involvement of the nations and the Minister sat there as Pontius Pilate washing his hands and blaming the victim DAE of its problems, History repeats itself time and time again.
Why? Well DAE had grown too big too fast already controlling the biggest market in Venezuela with almost 50 %. DAE was second only to American Airlines to Miami and rapidly incorporating aircraft from 2 to 4 and by the 15th month it already had 9 aircrafts registered under its name. Destinations were being open and DAE was expanding at the speed that it was putting the other airline in Curaçao in a difficult path. DAE confronted all previous attempts with the previous government and this time found a corrupt General in Venezuela that was willing "for few dollars more" to do what the local official was not doing and in the new government found a Minister that was willing to play Pontius Pilate in this soap opera.
The case is closed. The murderers got away with the perfect killing but someday soon those that today are enjoying the death of DAE will see that in this business glory does not last. A monopoly last only a short time since increased fares and deteriorating services are the wrong combination. Some call it "the fat cow syndrome," Ramiz indicated.
“I predict that before someone comes into the market to present a real competition to the "fat cow " the consumer would find itself in a short time with a monopoly within the ABC Island plus Santo Domingo and Sint Maarten, a complicity between the two airlines serving Surinam and limited service with Venezuela and USA resulting in fares increasing drastically and deteriorated air service.
DAE would be cried by some and missed by many.