The Adrian Loveridge Column – Antigua, LIAT and Pie in the Sky
I recently questioned the charging of US$70 of the October 2018 imposed ‘Airline Travel and Tourism Development Fee’ on a LIAT return ticket from Barbados to St. Maarten. This was in addition to the already existing US$27.50 departure tax. LIAT kindly responded by stating the “Airline Travel and Tourism Development Fee is US$35 for CARICOM and US$70 for other destinations. Since St. Maarten is not a member of CARICOM the fee is US$70“.
I further asked if the reduced CARICOM fee applied to the five associate members which include Anguilla and the British Virgins Islands and I am awaiting a reply.
As at least part of this new tax was originally intended to further subsidise the carrier, when the new levy was implemented, it was stated “the remaining $20 million will go towards regulation of tourism, civil aviation and our shareholder responsibilities to LIAT”. A later announcement was made to sell all or part of the 49.4 per cent Barbados taxpayer holding in the airline, is it now likely that this levy will be revisited as it no longer may be applicable to the total initial intention?
On August 9th 2013 details were published of a signed loan agreement for US$65 million from the Caribbean Development Bank (CDB) in respect of a ‘Fleet Modernisation Project’ of which the Government of Barbados’s liability was US$33.2 million at an interest rate of 3.95 per cent (variable) over a thirteen year period, following a two year grace period.
At the signing of that loan the CDB President, Dr. Warren Smith, noted “Our relationship dates back to 1975 when we funded the purchase of aircraft, spares and equipment to improve its (LIAT’s) inter-island air service in the Eastern Caribbean. In the ensuing years we have provided financing to the tune of US$153 million to improve and safeguard the financial viability of LIAT”. Adding “reliable and efficient regional air transportation is an indispensable underpinning of Caribbean development. LIAT’s services are therefore important to the continued viability and sustainability of the Region’s critical industries including agriculture, tourism and other services“. Dr. Smith has a long history with LIAT, having served as its chief executive officer for several years.
Within the last week the media has reported that the talks between Antigua and Barbados to discuss the possible sale of all or part of the 49.4 per cent shareholding the Barbadian taxpayer has in LIAT broke down after a quoted ‘two hours’.
Following this, further comments emanating from Antigua, the latest uttering include a possible plan to lease jet aircraft and begin operating flights to Florida, Dominican Republic, Haiti and Jamaica.
Is Antigua seriously considering competing with jetBlue, American Airlines and others into Florida and exactly where is the market to economically sustain viable routes from the eastern Caribbean to these other named destinations?
As an industry observer this is yet another graphic example of the imperative need for restructuring and finally put-in-place the people who are actually capable and qualified to rescue the airline. The absolute folly that the airline will attract any further private sector investment until this is fully implemented remains no more than “pie in the sky”.