Summary
- Air Antilles faced financial difficulties and strikes by employees, before being placed into liquidation.
- The local authority of Saint-Martin rescued Air Antilles despite the risks and former failures of government-run airlines within the region.
- Air Antilles’ relaunch has been delayed because of pending approval from the French Civil Aviation Authority, with a practical relaunch window of February or March 2024.
Air Antilles suspended operations at the top of September 2023 after its holding company was placed into liquidation. The airline has since emerged under recent ownership and has since been preparing for its relaunch. Air Antilles is a French airline based in Guadeloupe (within the French Antilles). This territory is, in actual fact, a part of the European Union, given its status as a region of France. The official currency is the euro.
Recently, news has emerged that Air Antilles is not going to find a way to relaunch in January 2024, as previously hoped for by recent CEO Jérôme Arnaud. The carrier is under recent mixed ownership, with the local authority of Saint-Martin holding the bulk stake. Nevertheless, history has shown that government-run airlines within the region often struggle to earn a living and act primarily as a financial burden. As such, why did the local authority of Saint-Martin rescue Air Antilles?
Photo: Debbie Ann Powell | Shutterstock
Damaging difficulties
The Caire group, owners of Air Antilles and Air Guyane, was heavily indebted and subjected to severe criticism from its employees for poor working conditions. The summer season saw an enormous strike organized by 42 of the group’s 225 pilots, which led to a near-complete grounding of all aircraft. This move was taken because of this of frustration with CEO Eric Kourry, his lack of interest in dialogue, his lack of respect for certain agreements that were made, and requests for salary increases. The pilots went on strike on July 14 and only returned to work on August 2, after the group entered liquidation. In early August, Kourry told RCI Guadeloupe (translated from French):
“I’m not bored with fighting, I’m pragmatic. I consider that we’re doing business with a radical population that refuses to barter. For the last 6 days, we’ve been mediating with the state and, over the 5 meetings, they’ve not come as two. They refuse to return to work, not even to repatriate their very own people. We now have radical people. We’re talking about 42 strikers who’re going to wreck an organization of 220 people in Antilles and Guiana.”
On the time, there have been prevalent calls for the CEO to resign. Apart from the throughout the Caire group, as described by Le Figaro, the corporate also faced ever-rising heavy debts.
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Requisite restructuring
The plan put forth for the restructuring of the Caire group was the dissolution of Air Guyane and the continuation of Air Antilles but under smaller and more constrained operations. This included a reduced fleet and staff numbers. It was acquired by Cipim, a holding company under the jurisdiction of the Edéis group, which partnered with the Saint-Martin collectivity.
Chancy Connectivity
The Caribbean region is thought for its unstable local aviation industry. Plagued with airline failures or government-run carriers that rack up severe debt, whether Air Antilles will join the remaining is a major concern.
CEO Jérôme Arnaud noted Air Antilles’ recent priorities in an interview with Guadeloupe La 1ère (translated from French):
“[…] But firstly we are going to prioritse the calling of the corporate which is to serve the populations and supply a daily and timely service and restore regularity and trust for and from our passengers.”
From a simplified perspective, there are two different models that Caribbean airlines are inclined to follow, listed below:
Important Priority |
Secondary Priority |
|
Model 1 |
Profitability |
Intra-island connectivity |
Model 2 |
Intra-island connectivity |
Profitability |
Air Antilles previously followed Model 1 as an independent, private airline owned by the Caire group. With the Saint-Martin collectivity now acquiring a stake within the carrier, its model will likely shift to the second during which intra-island connectivity becomes the priority and profitability comes after.
Yet, connectivity is crucial for these islands, that are almost entirely isolated without strong air links. Since Air Antilles’ suspension, prices on some routes it used to operate have skyrocketed. As an illustration, on the Pointe-à-Pitre (in Guadeloupe) to Grand Case (in Saint-Martin) sector, Air Caraïbes was the one airline linking the 2 cities directly every day. Prices were so high that local news site Guadeloupe La 1ère wrote about it, emphasizing the worth benefits of Air France recently introducing service twice-weekly on the sector as of last month. Journalist Hervé Pendurant wrote (translated from French):
“Pending the arrival of the longer term airline run by the Saint-Martin Collectivity, will competition from Air France result in lower prices on the Saint-Martin-Antilles route?
Air Antilles is crucial for regional connectivity between these islands. That said, a give attention to connectivity could mean profitability is neglected.
Airport consultant Gérome Arnell wrote on this topic that it’s ultimately very difficult to choose between the 2 models given the advantages of each. In the case of an investment by the collectivity in Air Antilles, he said:
To purchase signifies a commitment to investment, growth, and transformation. It’s a declaration of belief within the potential for improvement of Saint-Martin connectivity and attractiveness.
As for a possible decision (which was not taken) to permit the dissolution of Air Antilles to proceed without state intervention, he said:
Then again, to depart [the deal] is usually a strategic move, an acknowledgment of our own limitation and must be a conscious selection, considering all of the labour, financial and operational issues. It could be a call, to prioritize, or to hunt recent opportunities elsewhere. The Collectivity of Saint Martin, leaving the pursuit of an airline investment could open up opportunities for other investments in sectors like renewable energy, tourism infrastructure, or alternative technique of transportation.
Arnell says that the stake in Air Antilles would require an investment of roughly €10 million per yr for the subsequent three or 4 years to permit the corporate to interrupt even. It’s value noting that, in response to the group, the collectivity has an annual budget of around €70 million.
Photo: Markus Mainka | Shutterstock
Guadeloupe La 1ère wrote that Saint-Martin’s decision to avoid wasting Air Antilles and French Guiana’s decision to not rescue Air Guyana means the latter is the Perhaps, strategically speaking, French Guiana was not completely wrong-footed in its decision to avoid investment despite the numerous impact the lack of its airline is having and can proceed to have on its connectivity.
What do you’re thinking that? Was Saint-Martin right to speculate in Air Antilles?