Adrian Loveridge Column – Covid 19 and LIAT
It would appear that our citizens and residents will first have the option of travelling within the Caribbean, as and when Coronavirus restrictions are lifted.
As we are now in the traditional prolonged softer summer season, it also appears to be more logical that our tourism planners and policymakers will focus, at least part of their efforts on promoting this opportunity.
As airlift possibilities within the region are extremely limited and LIAT has so far indicated they will not resume commercial passenger services until at least 30th June 2020, here again comes the crunch.
As we have witnessed for decades, LIAT has drifted through various degrees of cash flow crisis, management turmoil and insolvency issues, seemingly unable to survive without massive taxpayer support. At the same time, most Governments within the region have increasingly levied what many consider deterrent taxes and surcharges on their airline ticket prices, making it cheaper, in many cases, to fly to Canada or the United States.
So if we, as a country, or other states within the region are remotely hoping that Intra-Caribbean travel will at least lead the charge in returning to some sort of normality in arrivals numbers, then the status quo will have to change. Our Government will have to weigh-up the fact that if people cannot be enticed to our shores, that they will not collect VAT and other taxes on hotel or other accommodation, rental cars, restaurant dining, shopping, attractions and activities etc, for those visits.
The predicament for the administration will be if they really wish our crushed tourism industry to recover in the least possible time, will they forgo at least some of the multiple taxes currently applied?
Of course, it’s not just about returning tourism to viability, but restoring employment to an acceptable level in the foreseeable future, with the additional taxes and national insurance contributions that brings.
According to recent reports the World Bank has approved loans of US$159 million for a series of Caribbean Regional Air Transport connectivity projects. This included concessionary financing of $13 million for Dominica, US$17 million for Grenada and US$45 million for St. Lucia with a maturity of 40 years including a grace period of 10 years ‘to improve regional capacity’ and ‘facilitate connectivity and support countries during the COVID-19 recovery phase’.
Will these incredibly generous borrowing terms, at least partially relieve financial pressures on these Governments and enable them to reduce airport and departure taxes?
Airline pundits have also been calling for radical reforms of LIAT over the last decade or more and for a company that has been so reliant on taxpayer’s monies for almost an eternity it seems almost incredulous that their accounts have not been made public for 40 years.
Perhaps this is the opportunity to finally restructure the company, without regional political interference preventing the installation of management that could ensure its long term viability and survival. Unless this happens, just the concept of developing the true potential of intra-Caribbean travel and restoring past arrival numbers will remain a distant pipe dream.