BU has been following the progress of new entrant REDjet to the regional air transport market with interest. Not since Carib Express have we seen a new airline generate so much debate. The airline was approved to fly by the Barbados government albeit after a mountain of bureaucratic hurdles had to be leaped. The airline had to confront a suspicious minister of transport in Jack Warner in its quest to fly to Trinidad. A recent report suggests permission for REDjet to touchdown at Piarco International Airport should be known when the cabinet meets on Thursday. It was left to the Guyana government to welcome the airline free of controversy.
If we are to judge by the comments emanating from REDjet management the response to the airline has been overwhelming. Why should this be a surprise to anyone when in recent months it has been cheaper often times to fly to Miami or New York than to Antigua or Jamaica.
It is ironic and exposes the hypocrisy in the region that external players are the ones to attempt to make regional travel affordable. We are not ignoring the contribution of local investor in the airline Bizzy Williams. For decades our political leaders and intellectuals, or should we say pseudo-intellectuals, have pontificated about the importance of freedom of movement to the success of the regional integration movement. However they have all failed to deliver a solution which would make regional travel affordable. Barbados, St. Vincent and Antigua are the major shareholders in LIAT which currently has the monopoly on regional transport between the islands of the Eastern Caribbean. Whether because of mismanagement or a flawed business model LIAT has been a generator of debt for its shareholders and venerable Chairman Doctor Jean Holder through the years. The less written about Caribbean Airlines and Air Jamaica the better.
BU has held fast to the position that building the planks to facilitate a regional integration movement (Caricom) or a form of functional cooperation depend on a few key things. We must have affordable regional transportation, freedom of skilled people to move and a financial framework to facilitate the settlement of financial transactions. It is disingenuous that we have had a few making noise about the immigration policy of Barbados but remain quiet on the issue of the lack of affordable regional air travel. Do you get the sense that Peter Wickham, Rickey Singh, Annalee Davis, George Braithwaite, Tennyson Joseph and others of that ilk have not been as concerned about the high cost of air fares in the region? The one-trick pony argument has been exposed by their passivity on affordable air travel in comparison to the issue of immigration.
A scan of the media in Barbados, Guyana and Trinidad in the last week shows that LIAT and Caribbean Airways have miraculously been able to slash airfares. One wonders if LIAT has been piling up losses and Caribbean Airlines is the result of a restructure out of the BeWee experience how will the two airlines be able to sustain this level of pricing which is obviously a competitive reaction more so than a competitive repricing strategy.
Bear in mind that Barbados is the significant shareholder in LIAT and Trinidad is the only shareholder in Caribbean Airlines. The story behind the story here is that a price war will hit the taxpayers of both countries where it hurts most. BU disagrees with those government spokespersons who suggest that REDjet will complement existing regional air carriers as it serves the region. For REDjet to survive LIAT, Air Jamaica and Caribbean Airlines will have to pay a heavy price.
The next three months or so will be some of the most interesting times for air travel in the region. Sit back relax and enjoy the flight!
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