Future of Curacao aviation sector is in government’s hands
WILLEMSTAD - When the now defunct local airline, Dutch Antilles Express (DAE) was going through its last stages before being declared bankruptcy, the Department of Economic Development presented a document about the economic impact of the Curacao economy of a possible bankruptcy of DAE. The airline requested a guarantee of 5 million guilders from the government to receive financial assistance from the Giro Bank. This guarantee should have come from the public company, Curacao Airport Holding (CAH). This request was denied. DAE also asked for financial help from the development bank Korpodeko, which at the end was also denied. But, according to our sources, this document was requested by the government to analyze if it was necessary to give financial assistance or at least a guarantee to save the local airline.
In this document, the Department of Economic Development states that the amount of 67.9 million dollars (in 2013) will be lost directly by the tourism sector if the projected 72.000 passengers are not transported by DAE. The spin off effect that will be missed by the local economy, owing to intermediate supplies by other sectors, will be around 40.8 million dollars. Adding the indirect impact to the direct impact totalizes the amount of 108 million dollars that will be subtracted from the local economy in 2013.
The Department’s conclusion was that in 2013, the impact of a possible bankruptcy of DAE in terms or direct as well as indirect will exceed 100 million dollars.
The Department indicated in their document that the macroeconomic impact was calculated by using the macro model Curalyse. This model is an econometric system, which was developed to calculate the economic impact in terms of employment, gross domestic product and export generated on the island. The following parameters were used as an input to the model: the decrease in the number of visitors owing to the bankruptcy of DAE, the decrease in private consumption owing to the unemployment and the omitted investment planned for 2013. The calculated numbers indicate that the number of stay over visitors will cause a shrink of the real GDP by almost -1.45% in 2013.
This document was one of the requirements for the government to analyze if it was necessary to help DAE. Now, the other local airline, Insel Air finds itself in the same situation. Recently it was announced that the tourism sector wants the government to help the airline and save if from going bankrupt. The government has not asked for a document like this and is not seriously considering helping Insel Air.
The question is why did the government refuse to keep DAE afloat? Now that Insel Air is confronting same problems, the Minister of Finance Jose Jardim, is not willing to act differently to save another local airline! Pressure within the coalition parties, must go into high gear to change Jardim’s mind.