On January 4, the member Van Raak (SP) asked the State Secretary for the Interior and Kingdom Relations two written questions (reference 2021Z00022) and on January 7, the members Van Dam and Amhaouch (both CDA) asked us both a number of written questions (reference 2021Z00179) regarding the mortgage loan to Winair. In this letter we answer both sets of questions.
The State Secretary for the Interior and Kingdom Relations,
The Minister of Infrastructure and Water Management,
drs. R.W. Knops
drs. C. van Nieuwenhuizen Wijbenga
Questions from members Van Dam and Amhaouch (both CDA) to the State Secretary for the Interior and Kingdom Relations and the Minister of Infrastructure and Water Management about the mortgage loan to Winair (submitted on 7 January 2021).
Question 1
Have you taken note of the “Million dollar state aid per device” message?
Answer 1
Yes.
Question 2
Are Winair’s financial problems caused exclusively by the corona crisis? Is there an underlying (business) analysis of the causes? Would you like to share that analysis with the House?
Answer 2
The cabinet has decided on the mortgage loan in response to a request from the Prime Minister of Sint Maarten on December 8, and on the basis of a political, social and business economic test in accordance with the ‘Assessment Framework for support requests for individual companies’ that was issued on 1 May 2020 has been sent to your House.
This test had already been started in response to the broader request for support that the Winair company previously submitted to the cabinet. Part of this assessment framework is a business economic analysis. This showed that Winair is a healthy company in essence, but that the consequences of the Covid-19 crisis are causing the company to financial difficulties. Winair’s financial performance is reported in the Annual Report for Management of State Participations that your House receives annually from the Minister of Finance. The research commissioned by the Ministry of Economic Affairs and Climate Policy consists of phase A and phase B. The results of phase A are enclosed with this letter. The results of Phase B contain business-sensitive information; these are shared confidentially with your House.
Question 3
What conditions are attached to the mortgage loan to improve an affordable air connection with St. Eustatius and Saba? Was there any form of tendering?
Answer 3
As reported to the House in the letter of 31 December 2020, conditions have been set for the mortgage loan. The company may not distribute bonuses, dividends or profits until the loan is repaid. In addition, the company must operate the routes Sint Maarten – Saba, Sint Maarten – Sint Eustatius, and Saba – Sint Eustatius at least twice a day once the Covid-19 entry measures have been lifted. In addition, the company must provide central government access to financial management.
Providing a mortgage loan does not require a tendering process.
Question 4
Is it true that recently, with financial support from the (Dutch) government, a renewed route Sint Eustatius – Bonaire was opened (also carried out by Winair)? Is it true that the Dutch government had to guarantee a significant number of seats on this route? Is it correct that at approximately the same time the route Sint Maarten – Curaçao – Bonaire was resumed by Winair? Are these routes not so mutually competitive that there is a great risk that both routes are not independently viable?
Answer 4
Due to the entry restrictions as a result of Covid-19, regular air connections between the Windward and Leeward Islands of the Kingdom of the Netherlands have been canceled. The Island Governors of Bonaire and Saba and the Government Commissioner of St. Eustatius have indicated that they are seriously concerned about the consequences of this. The Ministry of the Interior and Kingdom Relations considers it important that the islands remain well connected in times of crisis, and for this reason has made funds available to temporarily guarantee a weekly flight between Bonaire and St. Eustatius. A request has been made to various airlines, and Winair is the only party that has indicated that it wishes to accept this assignment. The routes are not competitive, because no direct connection is offered between Bonaire and St. Eustatius. There are only flights with multiple transfer times that are impossible due to the applicable entry restriction.
Question 5
What role does the fact that the State is a 7% shareholder of Winair play in the decision to provide a mortgage loan?
Answer 5
The government is a 7.95% shareholder in Winair. On behalf of the Dutch State, the shareholder role is fulfilled by the Ministry of Infrastructure and Water Management. The provision of a hypot
hecaire loan to Winair follows from the interest in keeping Saba and Sint Eustatius connected. This interest also underlies the shareholding in Winair. The risk for the state has been kept as small as possible with the option of a mortgage loan chosen.
Question 6
Which other airlines provide connections between the Caribbean parts of the Kingdom? Hadn’t guaranteeing flight movements between Saba, St. Eustatius and St. Maarten been a great opportunity to strengthen diversity and competition in the aviation world, in favor of consumer prices?
Answer 6
There are a limited number of airlines that provide scheduled flights between the Caribbean parts of the Kingdom, including Divi Divi, EZ Air, Jet Air, and Winair. There is therefore little market forces and competition. Saba and Sint Eustatius are served by only one company: Winair. Due to its small scale, this connection is not cost-effective. In the absence of a mortgage loan to Winair, the company would probably have had to apply for a moratorium, with the result that there would be no offer of scheduled flights to and from Saba and St. Eustatius in the very short term. The accessibility of Saba and St. Eustatius is guaranteed in the short term by providing a mortgage loan. The Cabinet is examining how accessibility can be safeguarded in the medium term.
Question 7
What is the financial situation of these airlines? Do these also receive support from the national government? If so, how much? If not, why not?
Answer 7
See the answer to question 3. The companies located in the Caribbean Netherlands can claim the Covid-19 schemes of the government.
Question 8
What is the state of affairs with regard to the recommendations of the Connectivity Expert Group, which advocates treating and subsidizing flight connections between the islands as a form of public transport?
Answer 8
Partly as a result of the Connectivity Expert Group, a pilot with a ferry connection between the Windward Islands has been announced. This pilot can be carried out after travel restrictions due to Covid-19 have been lifted. The flight connections in the Caribbean Netherlands are monitored by the cabinet. The accessibility of Saba and St. Eustatius is guaranteed in the short term by providing a mortgage loan. The cabinet is examining how this accessibility can be safeguarded after this period.