The Adrian Loveridge Column – Is Antigua Based Caribbean Civil Aviation Authority Threat to Airline Industry?

After trying to avoid the subject intentionally for many years, is it now the time to focus all our attention that any change in the proposed majority beneficial ownership in LIAT (1974) Ltd could bring?

Following a whole pile of forays into competing with LIAT over the past couple of decades, which included Carib Express, RedJet, Caribbean Star and Sun, is now an opportune time to tempt other private sector airlines into our marketplace, to finally give some real competition and drive down fares?

To our south, the discovery and exploitation of substantial oil deposits off the coast of Guyana is already dramatically changing accommodation offerings and basic infrastructure. Additional airlift is already in place and this will only grow over the next few years.

Time will tell, if the Government of Guyana will plan for long term benefit of its citizens and channel some of this vast revenue into a sovereign wealth fund, like Norway did, which is now the largest of its kind in the world.

To the north, privately owned airlines like InterCaribbean Airways are continuing to expand and are currently pushing south as far as St. Lucia. Their aircraft fleet include eight 30-seat Embraer 120’s, two 19 seat Twin Otters, one 9 seat Britten Norman Islander and a Citation Jet which is used for executive charters. The airline presently operate to 22 cities in 13 countries, many of which do not have existing direct or one-stop connections to the south of the region.

The Embraer 120* has a range of 1,750 kilometers or 1,088 miles, with a cruise speed of 298 knots or 343 miles per hour, so ideally suited for mid-distance Caribbean routes. *source Wikipedia.

The St. Maarten based Winair airline, while Government owned, has previously expressed an interest in operating to more southern Caribbean destinations including Barbados. Their fleet includes ATR 42 – 300/320 aircraft with 48 seats which are wet-leased from Air Antilles*.

Air Antilles, the French West Indian carrier, already operates to Barbados, and like Winair, has some existing code sharing flight partnerships, but could they be encouraged to step-up capacity, especially if that helps feed additional French metropolitan and continental European visitors.

The biggest fly in the ointment might be the past record of various Governments and politicians who have interfered in the granting of route rights to airlines, interested in starting services.

A recent example is the Civil Aviation Minister of St. Lucia, Guy Joseph, pointing out to the media, that a number of airlines were seeking to operate in and out of that island but encountering difficulties acquiring the requisite licenses.

He went on to add, St. Lucia has hinted at the possibility of leaving the Eastern Caribbean Civil Aviation Authority (ECCAA) claiming that the Antigua-based organization was hampering the development of the airline industry there.

I think all our policymakers have to be reminded that across the Caribbean, our hotels only managed an average annual occupancy of 63 per cent in 2018.

Of course, it doesn’t stop there.

Every other tourism related business is negatively affected by those empty rooms and massive employment opportunities lost, with its profound economic consequence across the Caribbean.

9 comments

  • It’s quite simple to see where our “LIAT governments are coming from….. it’s their “cash cow”……. they will come together whenever there is a perceived threat and keep out any other airline. Meanwhile, they will squeeze the customers with ridiculous taxes they enjoy because of their monopoly to certain islands.

    Here is an example….. Barbados to Grenada return:

    Departing Flight:BGI – GND (Web Saver)
    1 Adult$ 65.00 USD
    Taxes and Fees: $ 120.74 USD

    Returning Flight:GND – BGI (Web Saver)
    1 Adult$ 65.00 USD
    Taxes and Fees: $ 81.06 USD
    Total: $ 331.80 US

    LIAT collects $130 USD while the greedy governments collect $ 201.80 USD !!!

    Would love to go to visit some friends in Grenada but not for BDS $ 663 to travel 162 miles …. a 55 minute trip.

    A return trip Barbados to Fort Lauderdale (in Sept) is $342.43 USD …. a distance of 1608 miles !!!

    Liked by 1 person

  • Vincent Codrington

    KS

    The pricing is not simply a function of distance. Does the FLL price actually cover the cost of that trip? Or was it to fill vacant seat?

    Like

  • The high taxes applied by some islands is to pay for the new airports.

    Liked by 1 person

  • David, if you apply that same concept to the PORT then the taxes paid by the cruise ship passengers/operators have NEVER covered the cost of the port or expansion.

    Like

  • @Adrian

    This is true, can you explain the anomaly?

    Recall when a head tax was being considered years ago. For whatever reason the Port is given a pass.

    Like

  • Vincent Codrington

    Correct, David BU.
    Airports built by governments for the use of travelers have to be paid for by travelers. There are no free lunches.

    Short aeroplane flights are more expensive per mile than long distance flights.

    Like

  • GAIA has been around for over 40 years …. according to World Airport Traffic Report for 2018, GAIA handled 2,194,931 passengers …… that equates to a lot of dough!!! Mean to tell me, our airport ain’t pay-off yet??? After 40+ years???

    When it does get “paid off”, will those taxes disappear? Lol….

    Comrade Gonsalves just built a new airport…… guess their taxes on LIAT tickets will sky-rocket?

    Like

  • @ks

    You have examined one side of the profit and loss?

    Like

  • Barbados Airport fees/charges (for passengers travelling within CARICOM), such as passenger service charge = $55; regional transfer fee (within 6 hours of arrival) = $10; security charge = $6.40 and terminal charge = $3; VAT, which is 17.5% of the airfare and the recently introduced Travel and Tourism Development Fee = $70……. are included in the airline ticket.

    Although the terminal fee is a meagre $3, if the figures from the World Airport Traffic Report for 2018 are correct and the GAIA handled 2,194,931 passengers, Barbados would have earned $6,584,793.

    There are operating expenses that must be taken into consideration, such as landing fees, parking fees (20% of landing fees) and over-night parking fees that would be deducted from revenue.

    According to Mr. Codrington: “Short aeroplane flights are more expensive per mile than long distance flights.” He is correct. I understand aircrafts use a significant amount of fuel when taking off. LIAT usually “island hop” enroute to many of its northern destinations. For example, passengers travel to Antigua, via Dominica and Guadeloupe.

    Taxes aside and taking the fuel cost into consideration, if we look specifically at the airfare, LIAT flying from BGI to SVG via SLU at an airfare of BDS$250, may not be economically viable for the airline.

    KS wrote: “Comrade Gonsalves just built a new airport…… guess their taxes on LIAT tickets will sky-rocket?”

    After the opening of its new Argyle International Airport, SVG’s departure tax was increased from EC$50 to EC$100. Government estimated the cost of operating the new EC$729M AIA would be EC$20….. EC$13M more than what obtained at E. T Joshua Airport.

    Liked by 1 person

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