Willemstad- According to local radio station Radio Krioyo, Insel Air had difficulty in paying employee salaries for the month of November 2018. Although the majority of employees reportedly was paid, this was not the case for a group of former MD-80 pilots which have been furloughed, but which are still on the embattled carrier’s payroll.
All eyes are now focused on interCaribbean which has signed an agreement for the take over of Insel Air’s activities, and the court session taking place on December 4, 2018. The fate of Insel Air, which currently still operates under bankruptcy protection, will most probably be sealed on December 4th, when it should be clear if the majority of creditors of the airline will agree with the takeover bid by interCaribbean.
Although creditors will all receive a relatively small sum of money owed by Insel, under the deal now on the table, interCaribbean will assume responsibility for various debts accumulated after the start of bankruptcy protection. Accumulation of new debt, while under bankruptcy protection is in fact not permitted, but so far the Bankruptcy Court has shown some consideration for the carrier, provided they would indeed be able to find an investor on a very short term.
The situation with the pilots, formerly flying the MD-80 airplanes of the Company, has proven very difficult and potentially even detrimental to the carrier. After the decision not to continue deploying MD-80 aircraft, Insel Air tried to lay of the group of pilots in question. The pilots on their turn decided to take Insel to Court and won the case, based on the fact that the Company had not applied the ‘last in, first out’ principle, normally used in the case of involuntary layoff and matters of redudancy.
Because of the verdict, Insel Air finds itself between a rock and a hard place, as the funds to retrain and re certify the pilots on other aircraft is currently lacking. As pilots are not exactly the least paid employees in the Company, the salary of this group continues to be a very heavy burden on the Company’s payroll and overall operational costs.
The possible takeover of Insel Air by interCaribbean will not bring an automatic end to the issue of the pilots in question. As the plan is for interCaribbean to take over the existing operating company, the labor agreements would still have to be terminated in agreement with local regulations and applicable stipulations in the labor law of the island.