Update Country Report Curaçao 13 Mar 2017

Event

In late February the UK's Foreign and Commonwealth Office (FCO) updated its travel advice on Curaçao, noting that safety concerns have been raised about Curaçao's national carrier, INSEL Air. High-profile guidance of this type could weigh on the airline's passenger numbers and revenue, which are already faltering because of financial concerns and requests for government support.

Analysis

The FCO guidance notes that UK government staff have been prohibited from travelling on INSEL Air, as have US and Dutch officials. The FCO does not issue guidance on specific airlines for non-government nationals, instead directing travellers to the website of the International Air Transport Association (IATA). However, its decision to mention its guidance on INSEL Air may have a knock-on effect on civilian passengers, who may be deterred from using the airline.

Although the FCO does not give a source for its safety concerns, these could be linked to a recent inspection by the Dutch Civil Aviation Inspectorate of both INSEL Air and its sister airline, INSEL Air Aruba. Following the inspection, which reported concerns with both airlines, INSEL Air Aruba was partially grounded, leaving INSEL Air Curação to pick up the slack by transferring some of the Aruba-registered aircraft to the Curação airline.

In late 2016 the Curação airline had asked the government to help support its finances, which have been undermined by difficulty in moving revenue out of Venezuela. As a result, the airline has been forced to suspend several flight routes and now appears to be flying only between Aruba, Curação, Bonaire and St Maarten. According to its website, INSEL Air normally flies to 26 destinations in the Caribbean, South America and Miami.

Impact on the forecast

A crisis at the national carrier may force the government to provide financial support, putting pressure on state funds. In addition, the reduction in routes may result in lower tourist arrivals to Curação over the short term, weighing on the country's main economic sector.