[Letter] Case for a single Caribbean airline

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[Letter] Case for a single Caribbean airline

Unread post by bimjim » Thu May 09, 2019

https://newsday.co.tt/2019/05/08/case-f ... n-airline/

[Letter] Case for a single Caribbean airline
2019/05/08

THE EDITOR:

The shareholder governments of LIAT ended a meeting on April 30 without a firm plan to rescue the financially strapped airline. The meeting considered an oral proposal by the Prime Minister of Antigua and Barbuda and undertook to give the proposal further consideration after it is submitted in writing.

In the past, there have been numerous meetings of prime ministers of shareholder governments with the objective of putting LIAT on a sound financial footing. None of these meetings have borne positive results.

Likewise, numerous reports based on studies by consultants have been published on the Caricom region’s air transport industry. All the studies identified a common theme: the region must develop and implement an air transport plan within a policy framework in accordance with the revised Treaty of Chaguaramas.

TT took the lead in 2006 when then prime minister Patrick Manning, after consultation with his Caricom colleagues, decided to rename BWIA Caribbean Airlines Ltd (CAL) and take over the operations of Bahamas Air, Cayman Island Airways, Air Jamaica (now defunct), LIAT, and Suriname Airways under a revised governance structure with Caricom countries’ participation.

When BWIA and the unions failed to agree on much needed work-rule concessions to achieve profitability, BWIA was shut down at the end of 2006 and Caribbean Airlines commenced operations in 2007 as a new airline. Needless to say, other Caricom states did not follow through with participation in CAL, resulting in the new CAL continuing to be a TT-owned airline.

The air transport industry is a major catalyst for social and economic development, particularly for countries with tourism-based economies. Efficient air connectivity is therefore vital to the economies of Eastern Caribbean countries, a sub-region served mainly by LIAT.

LIAT has served the Eastern Caribbean faithfully, but has a history of unprofitability. Shareholder governments had to pump hundreds of millions of US dollars to keep the airline airborne.

On his return from the 30th Caricom heads meeting in February, Prime Minister Dr Keith Rowley spoke about LIAT’s financial woes and suggested LIAT and CAL enter discussions about the economic benefits of co-operation.

CAL and LIAT operate a fleet of ATR-72 and ATR-42 aircraft and though competing with each other can benefit tremendously from functional co-operation in many areas such as fuel hedging, ground handling, purchasing, maintenance support, and code sharing. This can create better economies of scale with a consequent reduction in operating costs.

To date there has been very little movement on Rowley’s suggestion.

Also, given the thinness of the Caribbean air transport market, the big question is whether the region can afford to have five separate airlines, the majority of which incur huge losses that are borne by taxpayers.

For example, in May 2010, Jamaica’s then minister of finance and the public service, Audley Shaw, informed the Jamaican Parliament that the imminent shutdown of Air Jamaica was because the airline was an unbearable cash drain for the government, recording losses in 40 out of its 42 years of existence with an accumulated debt of US$1.5 billion.

He further told the Parliament that the proposed transaction with CAL operating the former Air Jamaica routes resulted in the Jamaica Government acquiring a 16 per cent ownership in CAL valued at US$28.5 million.

The global air transport industry is being rapidly liberalised with less restrictive economic regulations and the emergence of “open skies” air service agreements. Regional airlines will face more competition from extra-regional airlines, underscoring the need to co-operate, consolidate and perhaps integrate operations.

Therefore, the real solution may lie in the formation of a single Caribbean airline with an appropriate governance structure operating a suitable fleet of long, medium and short-haul aircraft with strategically placed hubs as envisaged by Manning in 2006.

Regional insularity is a major obstacle to the formation of any single Caribbean airline. It is time for regional governments to wake up, face reality and give true meaning to regional integration and the Caricom Single Market and Economy.

RAMESH LUTCHMEDIAL
aviation consultant

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‘Tackle regional air travel as one’

Unread post by bimjim » Thu May 09, 2019

https://barbadostoday.bb/2019/05/08/tac ... el-as-one/

‘Tackle regional air travel as one’
Marlon Madden
May 8, 2019

As shareholder governments struggle to come up with a new funding model to keep cash-strapped airline LIAT in the skies, a development banker is calling for a united regional front on tackling aviation challenges – including a single common airspace.

Director of Economics at the Caribbean Development Bank (CDB) Dr Justin Ram said that intra-regional air travel was still too difficult and suggested that it was unnecessarily expensive.

“Why are we trying to do so many things on a country by country basis when some of these things could be better implemented if we were to do them on a regional level. One I think definitely is aviation.

“I think we need to put our heads together and say ‘look, something needs to be done about this’. I am sure many of you travel around the region and you know how difficult that is.

“First of all, our governments slap a lot of taxes and charges on it, so for example, if you want to fly from Barbados to St Lucia, which is just about a half an hour away, 60 per cent of your fare is related to taxes and charges.”

Ram was addressing the opening of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) 20th annual conference at the Hilton Resort on Wednesday, under the topic, Obtaining Economic Security for the Region: The Transformation Agenda.

He also pointed to inefficiencies and the burden associated with regional travel, insisting that a regional approach to travel within the Caribbean would result in more business.

The CDB senior economist queried: “Why is it when I am going from Barbados to St Kitts I have to stop in Antigua, why do I have to get off the plane and go through security again?

“Why not come together and just think of the Caribbean as a single economic space and so it makes moving around lot easier.

“It means it would be a lot more attractive for Caribbean people to visit one another rather than it being more cost effective to go to Miami, for example. So this regional approach is really important for us”.

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Re: [Letter] Case for a single Caribbean airline

Unread post by bimjim » Thu May 09, 2019

On this subject matter we have to understand that small countries do see a need to provide the uplift THEY need on the frequency THEY need it.

We also have to understand that the "small" countries of the eastern Caribbean have historically been used and abused by the arrogance, self-centeredness and misbehaviour of the "large" countries of the eastern Caribbean, specifically Trinidad & Tobago.

Do you remember the days of BWIA? I do... I remember numerous occasions seeing a crowd of people in the airport parking lots in Barbados and Antigua - I heard it also happened in Hewanorra, St. Lucia - standing there staring up into the sky, watching their confirmed seat on THEIR flight passing overhead at altitude to New York or Toronto without them, BWIA having simply filled up all seats ex Piarco with Trinidadians as if the other-islanders did not exist.

And at the same time the shennanigans of Air Caribbean, Tobago Express and more, operating into the LIAT network? LIAT's woes are certainly due to politics and gross mismanagement, but also due to our "sub-regional brethren" doing as they like - simply because they could.

Back then also the NUMEROUS meetings and agreements forced by the politicians between BWIA and LIAT to better coordinate the schedules of the two airlines to make better connections. Then LIAT changing its schedules to suit the matches, and BWIA cruising right through the entire period unchanged as if the BWIA managers had been on vacation instead of a coordination meeting.

In recent years the stories and complaints about Caribbean Airlines mistreatment of Guyanese being routed through Trinidad and subjected to double security and customs inspections northbound AND southbound, and all the alcohol duty free being taken away from them?

This "little matter" of coming together and making one airline may be a reasonable fantasy, but there are few who remember the flagrant abuses and actually understand WHY our small countries have preferred to make their own decisions - or use the international airlines - when it comes to airlift.

Let us be 100% pellucidly clear: As BWIA before it, Caribbean Airlines is The National Airline Of Trinidad and Tobago - PERIOD - their ONE and ONLY priority is Trinidadians (not even Tobagonians make fist class citizen on that list). The "small-islanders" can go and walk a short plank as far as T&T and Caribbean Airlines is concerned. It has ever been so, it will always be so, and that attitude extends to everything encountered in Trinidad aviation - Immigration, Customs, Security, Fuel, Port Health, everything.

So if you are promoting Caribbean Airlines as a single airline for the eastern Caribbean, I suggest you wheel and come again, the most senior of politicians have tried, and that just is not going to happen - not with any visible degree of satisfaction for the rest of us, anyway.

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