Willemstad- The Court in First Instance will permit embattled Insel Air to continue their operation under bankruptcy protection law. This much became clear during a Court session this morning, dedicated to Insel Air’s bankruptcy protection.
However, the Court also ordered the carrier to start paying taxes withheld from employee salaries and -on top of that- keep current with current expenditures. This will most probably prove very hard for the struggling carrier, which so far have not been able to make all payments. Since the start of the bankruptcy protection, Insel Air has, with approval of the Government of Curaçao, not paid any taxes to the receiver’s office. They did however keep current with about 95% of monthly operational expenses.
Judge De Kort expressed less leniency with Insel Air compared to before. He instructed the court-appointed administrator, Rogier van den Heuvel, to report back to the Court on October 30th and December 4th about the progress made with the ordered payments. De Kort noted that the essence of bankruptcy protection is that no new debts are allowed to accumulate. De Kort also said he felt the carrier had turned into a sort of Government-subsidized foundation, now that Government in Curaçao had permitted Insel not to pay current taxes, and on top of that convert the amount in taxes owed by the company into non-preference debt.
Van den Heuvel did not seem very optimistic about Insel Air chances for survival. Although Van den Heuvel recommended for the bankruptcy protection to be continued (for now), he also noted that he felt that there should be a solution to Insel Air’s on a relatively short term, or that it would be better to still declare the Company bankrupt.
Edward Heerenveen, representing Insel Air management was more optimistic. He expressed that the carrier saw a positive trend and that the company hoped to be able to dry-lease a new airplane instead of a continued wet-lease of a Conviasa jet. Heerenveen also said that the carrier expected good results from restarting flights to Kingston, Jamaica.
Both Insel Air Management and Van den Heuvel agreed that the carrier is, at this moment, far overstaffed for the current level of activities. Van den Heuvel mentioned a number of 50 employees as realistic, while the airline in actuality still has a staff of about 175 employees.
Insel Air owes its debtors a total of 164 million Antillean Guilders. The carrier and the Court-appointed administrator are still in talks with two parties about a potential (partial) take over.