LIAT Chief Makes A Valid Point: Adrian Loveridge
LIAT Chief: Blame heavy taxes
In a Nation news story today (Tuesday 12th February) under this heading, the Chief Executive Officer of LIAT is blaming regional Governments, including the three principal shareholder’s for the high intra Caribbean airfares. (Nation News link here) Mr Darby has in my humble opinion a valid point. Departure taxes, handling fees and other user fees have climbed to an all time high. But let us examine an example of these fares. Booking a month ahead and looking at the cheapest option on LIAT’s website for return flights from Barbados to St. Lucia, the fare is US$240.24. Of this, the outward taxes and add-ons are US$55.87 and on the return leg, US$57.37.
So a total of US$113.27 or 47% of the overall airfare is made up of taxes and additional charges. What Mr Darby fails to mention is that of the US$113.27 in add-ons, some US$28 is made up of LIAT’s own fuel and insurance surcharge. There is no doubt that the new Minister and Tourism and all the associated agencies involved will currently be grappling with ways to redress the decline in intra regional travel.
Source: Barbados Free Press
We read the above blog on Barbados Free Press and was forced to offer our two pence worth.
Is it not ironic that Adrian Loveridge, our resident tourism expert, who has been vilified and invective hurled at him by all and sundry on the issue of LIAT? He has been consistent in his belief that LIAT, our regional airline, MUST be held to a high standard regarding its management. Is it not unacceptable that at a time when our tin pot leaders in this region are promoting regional integration, it has become an unbelievable farce that ticket prices for intra-regional travel have now reached a point where to travel is viewed with some trepidation by West Indians.
It was reported in the news recently that Governor of the Central Bank of Barbados Marion Williams validated the dark reality that intra-regional travel has fallen by 16% in 2007 compared to 2006. The article above which quotes LIAT’s CEO Darby confirming that 30% of a LIAT ticket reflects taxes levied by the respective island governments. Is this not a laughable situation of an immense proportion?
Regional transportation, just like CARICOM, and now CSME appear to be concepts which our respective governments continue to struggle to implement. Ground transportation is subsidized in many of the individual islands because it is accepted that the Gross Domestic Product (GDP) of any country requires cost effective transportation systems to facilitate high productivity. Is it not safe to apply the same logic for regional travel? Our American and European trained leaders feel justified to support multiple regional airlines in the Caribbean which is concentrated in a very small space. We currently support Caribbean Airlines, formerly BeWee, Air Jamaica, LIAT and few others which are too small to mention.
The former Barbados Labour Party administration led by former Minister Barney Lynch pushed Barbados to assume a greater equity stake in LIAT, we have been told by the Chairman, Dr. Jean Holder that the current LIAT ticket pricing policy is what the prevailing economic conditions support to ensure the airline can make a profit. The current state of affairs begs the question: do we want profit for LIAT at the expense of intra-regional travel? Shouldn’t our leaders understand that their is a relationship between intra-regional travel and regional integration?
Maybe what we need is one Caribbean airspace and all that goes along with it, Secretary General of the Caribbean Tourism Organization Vincent Vanderpool had a lot to say on this matter recently:
For a while, Caribbean tourism officials have been putting their heads together to come up with a viable plan to make travel to the region more affordable and efficient. One of the region’s tourism point persons remains convinced that the answer lies in the creation of a single Caribbean airspace that he classified as a “powerful concept.”
“What we do within the Caribbean is sheer madness in terms of the added cost that we apply throughout the region for visitors who are coming in,” Secretary General of the Caribbean Tourism Organization Vincent Vanderpool Wallace told the Bahama Journal.
read full article: The Bahama Journal
The recent mouthing by our newly elected Prime Minister David Thompson suggests to us that the LIAT saga will continue to be played like the proverbial football. Thompson’s position if we understand him well, suggests that he and Alan Chastanet from St. Lucia are of one accord. He believes that regional travel is important to the region and for that reason he resists the idea that Barbados should become wholly dependent on LIAT to move people around. We will monitor this situation to see how this latest chapter in the LIAT Saga plays out.
To all the players we wish to remind them of this famous quote:
Informed decision making comes from a long tradition of guessing and then blaming others for inadequate results –
LIAT Problem Or Solution?
Why Is It That Our Minister Of Tourism Has Stayed So Silent On The Ongoing Problems And Region-wide Criticism Of LIAT?
Do You Remember All Those Promises That Intra Caribbean Airfares Would Come Down?
Guyana Consulate Probe Into ‘Left Behind’ Luggage By LIAT and Other Airlines
Is There Really Any Long Term Future For LIAT?
How Many Barbados Underground Readers Have Tried To Book A TWO for ONE Seat Sale with LIAT?
Adrian Loveridge Continues To Ask The Searching Questions To LIAT~Our Only Inter-regional Air Transport Service
Pingback: LIAT, Political Football Par Excellence!
The Daily Nation Newspaper, Tuesday, February 12, 2008, pg 4, has a story over the caption: LIAT chief: Blame heavy taxes, that reports the chief executive officer, Mark Darby, as saying they were being asked to pay sometimes as much as 30% in additional taxes and other add-ons. The story goes on further to say that this year alone, the regional carrier will collect US $ 25 million to $ 30 million in taxes on the behalf of regional governments.
While the People’s Democratic Congress (PDC) does NOT know about the veracity of the statements attributed to Mr. Darby in the said newspaper, what we do know, however, is that any commercial and industrial enterprise, public, or private, local, regional and/or international, that allows itself to be used by the Barbados State/Government and other such states/government in the region and elsewhere, to carry out such wrong and evil acts as STEALING monies from members of the public and their customers a la violations of their (the members of the public and customers) income and property rights , is bound to be operating in an environment whereby it never reaches its fullest organizational potential, never always feels good about the value of the goods and/or services that are being sold by it to the public, being so damnedly degraded, never feels good about the state/government intervening in a totalitarian way in the relationships between itself, it workers, if so, and its sellers and buyers, and never secures the maximum sales revenue it really deserves within a market context, with such an ancient, suppressive, devaluing, totalitarian, and thieving Taxation system still being in place in Barbados and in other jurisdictions of this world.
Finally, we in PDC ask that managers and supervisors and workers of commercial and industrial enterprises, esp. those that are public or private ones, local and/or regional ones, and, too, ask that members of the mass consuming and general publics across Barbados and the region, give of whatever support they can to us – PDC – as we continue our efforts to win the government in Barbados and thereafter to promptly start the process of the ABOLITION OF ALL TAXATION IN BARBADOS, in the aim of bringing greater freedom and democracy, and progress and development to the country.
Correction: line two, paragraph one, a story under not over the caption.
Correction: line two, paragraph one, a story under not over the caption.
There is an excellent article in the Bahama Journal today entitled ‘New Push for Single Caribbean Airspace’.
I hope BU can post the link.
I would lke to quote CTO chief Vincent Vanderpool Wallace – ‘What we do in the Caribbean is sheer madness in terms of the added cost that we apply throughout the region for visitors who are coming in’.
‘However, researchers who compiled the 41-page report that was released by the CTO acknowledged that The Bahamas, Trinidad and Tobago and Barbados did not want to negotiate such an arrangement (Single Caribbean airspace) at any time in the near future’.
I met with the commercial dept of LIAT last week and was very impressed with the young enthusiastic staff I talked to.
LIAT have given special fares for exhibitors and delegates attending our re-DISCOVER the Caribbean Show that is taking place in April and I am very grateful for that.
However, I must admit that I am still doubtful that LIAT will be able to lower operating costs and fares until they address the staffing problem and operational base location.
Well Mr. Darby showed up in Guyana last week and stated the reason luggage is left in BGI is because planes have to carry extra fuel on runs to GEO because in most instances LIAT planes can not land in GY at night because of dense fog and also our airport does not have proper landing equipment. Well it’s a good thing some of our Guyanese men are flying the big jets for Air Canada, because they wrote back and said that it is LIAT planes that don’t have the instruments to land at GEO in dense fog. I think Guyana should not allow LIAT to start flights to Suriname from Guyana because if they cannot service Guyana properly how will they service Suriname, and besides we have META Brasilian Airlines to connects us to Suriname. I say to President Jagdeo stop LIAT from coming to Guyana, and so in this way Bajans and others will have to go to POS and change planes to come to Guyana on Caribbean Airlines. By the way you see the lastest Caribbean jet, it says GUYANA Land of Many Waters painted on it. They don’t have a Barbados Land of the Flying Fish
The rest of the world is benefiting from the low-cost airline model, why aren’t we?
According to the Ryanair web site today, you can fly from London Stansted to Belfast (Northern Ireland) for the equivalent of B$12 and to Shannon (Ireland) for B$20. Or go to Pisa or Stockholm from Birmingham for B$40.
Part of the equation here is that the Low cost airlines are using underutilized airports, but compare that with a B$400 ticket to Trinidad or St Lucia, traveling in less comfortable non-jet aircraft. Part of the equation too is that there are no subsidies. The industry is highly competitive.
We do an odd thing in the region. We subsidise inefficient airlines to keep them in business (Liat and Caribbean) and others out and then we stifle the market by heavily taxing passengers to pay for the subsidy.
When you combine these high costs with the standards of timeliness, customer care and baggage care it is almost enough to make you weep.
One solution would be to remove the direct subsidy to airlines and use the cost savings to remove taxes on journeys that begin and end in CARICOM, (so that the remaining tax falls disproportionately on out-of-region tourists).
If there are sufficient savings from ending the subsidy, we might even subsidise regional passenger tickets. The net fiscal effect is the same, but we would be subsidizing passengers not airlines and this would force the airlines to compete for the “passenger subsidy” rather than get it irrespective of “sloppy” service and reduced passengers.
Once we have this reverse passenger tax in place we should look to try and promote the region for low cost airlines like Easyjet or Southwestern to operate here. It is not clear to me that this is the solution, but it is clear that the current sky-high costs (excuse the pun) reflect government supported monopolies that are crimping regional travel and trade. I hope the Prime Minister follows up his remarks with some bold policy in this area.