Travel from Barbados to Select West African Countries and Back

Submitted by Roslyn Shepherd

Demand for travel determines the servicing of routes by airlines.

The pandemic has triggered economic hardship worldwide, failures and or downsizing of some airlines, and in the absence of a definitive end to the effects of the pandemic, an on-going contraction in the demand for travel. This is bad news for Barbados whose economy is tourist dependent.

Whilst the country is in a wait and see position, it might well be beneficial if it looks at establishing a connection with Western Africa via air travel. As the most easterly Caribbean country, Barbados is nearest to West Africa, 6,406 km from Ghana and 7,431 km from Nigeria. There are seventeen (17) West African countries of which Nigeria and Ghana have a population of 100 million and 30 million respectively. Ghana is defined as a third world country but with the world fastest growing economy in 2019 and Nigeria, a rich 4th world country. Both Ghana and Nigeria have controlled the spread of Covid-19 and could be the main routes.

Demand for travel between Barbados and Ghana and Nigeria would have to be assessed by the Government of Barbados. In the absence of information, Barbados could benefit from promoting its educational institutions from primary to tertiary level. Parents who can afford tuition plus boarding and all the incidental costs might for a variety of reasons, prefer their children being schooled outside of the country. It might also be possible for Chefette to expand into West Africa. How Barbados can benefit from other aspects of oil rich Nigeria and agricultural based Ghana will also require research.

This suggestion is not new; both Jamaica and Guyana tooted flights to Africa but they failed to materialize. However, the present economic climate might just be right to follow through with these West African airline routes. Though flying to Barbados, most of Virgin Atlantic airplanes have been grounded by the pandemic. Dire warnings about the continued spread of Covid-19 in the USA, UK and even Europe do not indicate this airline will return to full flight in the short term. With assets grounded and the airline bleeding money, Sir Branson might well be receptive to a route from Barbados to West African countries. His planes would be back in the air earning money. There’s no direct competition. Ticket prices can be relatively cheap because the airline would be flying to an oil rich country, Nigeria. However, the viability of each route is incumbent on Barbados justifying demand.

Wouldn’t it be ironic if the former slaves in the Caribbean reverse the slave triangle to carve out trade between West Africa and the Caribbean and even North and South America.

This challenge is not outside the Prime Minister of Barbados’ orbit. The PM has resource people who can pull together a comprehensive Business Proposal. Her several interviews at the international level has raised her profile which should lead to contact and persuasion of the key international asset providers, Sir Branson or the alternative British Airways and though not discussed herein, the governments of Ghana and Nigeria.

This is not a start-up business where projected minimum start-up capital would be around $22 million in the first year as per a Business Plan done for a proposed new airline in 2010. The airport hubs, planes, personnel, etc., already exists. It would be interesting to know the flaw(s) in my idea.

Adrian Loveridge Column – Intra Regional Airline Hustle

It is very encouraging to witness a bevy of regional carriers that have already announced or plan to operate or extend flights to and from Barbados including Inter-Caribbean Airlines, Air Antilles, Caribbean Airlines and One Caribbean among others.

Sadly though, not all of them have seemingly promoted the routes, times and fares in sufficient time to ensure there is a reasonable possibility that flights will operate to economic capacity.

Another concern is that several Caribbean leaders have called for a reduction in the deterrent add-on taxes, that Government’s actually imposed previously, but the carriers are still waiting to know what will replace them and at what chargeable levels. This could, of course, dramatically determine the final fare, drive demand and give the operating carriers some hope of reaching viability on these services.

A quick check for instance, on the websites of Air Antilles, One Caribbean, Inter-Caribbean and Caribbean Airlines, where all four have opted to fly the Barbados /St. Lucia route, indicate that the cost of the lowest priced return flights varied by as much as 80 per cent.

Cursory fare comparisons in August are:

  • One Caribbean – US$369 (including US$145 taxes),
  • Inter-Caribbean – US$320 (including US$172 taxes),
  • Caribbean Airlines – US$276 (taxes included but not specified),
  • Air Antilles – at US$208 (taxes included but not specified).

Time will tell if there really is the capacity to sustain four or more airlines between these two destinations, at least in the short to middle term and whether price will determine their long term sustainability.

Sadly, search engine sites like GOOGLE Flights are not yet functional within this region, so it’s a fairly laborious process comparing each carrier’s price offerings, making effective marketing even more critical to capture market share.

I also hope that all these airlines will partner with travel agents, tour operators and tourism trade representative bodies, to offer hotel/flight inclusive options.

From my limited time working as a largely unpaid consultant at Carib Express, within three months, our Escape program generated over 22 per cent of the entire airlines turnover. While the airline eventually failed, largely through poor management decisions, Escape clearly demonstrated the market for affordable intra-Caribbean breaks.

From this initiative the very first annual event entirely dedicated to growing intra-regional travel was born and for 8 years the re-DISCOVER the Caribbean Show went on to bring millions of dollars of additional year-round business and hotel occupancy to Barbados.

While the Caribbean generally is perceived as a relatively Covid-19 free zone, this opportunity cannot go un-served, especially until a time, when we achieve anything close to the recovery of airlift from other major markets.

Perhaps this is the perfect scenario for implementing the much discussed travel bubble concept, allowing people to travel within the territories which have demonstrated the unequivocal ability to manage and control the pandemic at minimum risk?

Prior to the submission of this column, each named airlines was emailed and asked to comment and correct any of the information that it contained.

Adrian Loveridge Column – Governments Should be Working Together

As more and more tourism businesses indicate they are re-opening, hopefully over the next few weeks, our policymakers and planners will instigate a single source reference website or other social media platform to combat the mass confusion and speculation as to when our industry is ready and able to host locals and overseas visitors.

Meanwhile, potential arrivals are left to navigate a bewildering source of what, in many cases, turns out to be misinformation or at least misleading. Especially relevant when you bear in mind the overwhelming majority of people do not book flights at a day or two’s notice and cannot necessarily choose holiday dates at short notice.

Of course, it all comes down to safety and most reasonable people can fully understand Government’s reluctance to commit to specific dates before every possible precaution preventing the further spread of Covid-19 is put in place. And this even more reinforces the essential need to implement a single reliable source for the latest factual information covering every aspect of our tourism offering.

What is also disappointing is that there appears to be no unified regional plan to re-open Caribbean islands to the world. A recent statement issued by LIAT to the Leeward Islands Airline Pilots Association indicated ‘the need to extend the temporary layoff of its pilots for three months’. Adding that, it was still awaiting further shareholder funding or subsidies and ‘these funds continue to be delayed’.

Even allowing for the differential in available medical and testing facilities, every territory seems to be doing its ‘own thing’ in terms of accommodation and airlift. Perhaps, many may question whether bodies like the Caribbean Tourism Organisation (CTO) could have played a greater role in recovery and if we can ever seriously contemplate marketing the region under one umbrella.

The CTO rightly could cite limited financial resources at this difficult time as a major issue for not being more collectively proactive, but there is always something positive that can be done with the combined talents and knowledge available.

Naturally, each island state has its own priorities in terms of economic recovery, the survival of businesses and restoring employment, but surely a greater degree of unity when negotiating the return of airlines and standard safety protocol could be agreed?

There also remains the sticky subject of taxation. In the case of Barbados, since October 2019 the imposition of a bevy of new taxes and levies has virtually negated Government from any significant fiscal contribution to marketing the destination.  Throughout the duration of lockdown this valuable source has virtually dried-up and while the operating expenses that include staff salaries and premium location premises, both at home and overseas of the Barbados Tourism Marketing Inc., and its associated agencies have remained, clearly there must have been some significant savings in advertising and airlift support.

When flights eventually return, will the administration look again at the level of taxation imposed on airfares which includes Value Added Tax (VAT) and two departure taxes, among others, to aid recovery?

We should remember that our traditional sources markets have all experienced loss or depletion of earned income and unprecedented levels of unemployment for a sustained period and that will inevitably impact on destination choice.

Call for Caribbean Governments to Tax Cruise Sector MORE AND Tax Air Passengers LESS

MacLellan

Robert MacLellan, Managing Director, MacLellan & Associates

Can tourism dependent Caribbean governments learn something from oil producing countries? When relatively small and poor oil producing governments sought to get a fair price for oil – their main source of national revenue – they banded together to negotiate more effectively with the multi-national oil companies and the larger developed nations, which were the major consumers of their oil. In 1960 five of these countries came together to found OPEC – the Organization of Petroleum Exporting Countries – and were later joined by nine additional member states. As a result of their joint stronger bargaining power, oil prices have risen relatively steadily from US$1.63 per barrel in 1960 to an average of around US$77 during the last ten years.

The weak negotiating position of individual Caribbean governments versus the massive cruise line corporations, relative to port taxes, poses similarities to OPEC’s situation sixty years ago and the same potential “rebalancing” strategy should now be pursued in the Caribbean. If governments across the whole region, including Central America, come together and form OTEC – the Organization of Tourism Economy Countries – they can negotiate as a cartel from a position of greater strength with the cruise lines. Currently, when individual countries try to increase port taxes, they are threatened with being dropped from cruise itineraries and can be picked off one by one by the powerful cruise lines.

From a better bargaining position, state or national governments with single destination cruise itineraries – Alaska, Bermuda and Hawaii – have already negotiated higher cruise port revenues than those in the average Caribbean country. Cruise ships stay two nights in Bermuda and pay at least US$50 per passenger. For mainland United States and Canada cruise itineraries, an average of 33% of the cruise ticket price goes to port taxes, compared to an average 14% for a Caribbean itinerary. By negotiating together, governments in the Greater Caribbean region can achieve similar results to these destinations with higher port taxes.

A recent statement from the Government of Antigua & Barbuda summarized the history and current situation of regional cruise taxes, as follows. In 1993 Caricom countries initially agreed to impose a minimum US$10 port head tax for cruise passengers but this was never implemented because of internal disagreements. A range of today’s head taxes in the Caribbean is as follows: US$18 – The Bahamas and The British Virgin Islands, US$15 – Jamaica, US$13.25 – Puerto Rico, US$7 – Belize, US$6 – St Kitts & Nevis, US$5 – St Lucia, US$4.50 – Grenada, US$1.50 – Dominican Republic.

Imagine the economic benefit, if these cruise tax rates could be increased and standardized across the region at the higher levels listed. One directly relevant and current challenge could be addressed – the current sky-high airport and air ticket taxes in the region could be reduced to help increase the volume of stay-over visitors in the Caribbean.

Stay-over travellers, whether intra-regional or from outside the Caribbean, spend very much more than cruise ship passengers and generate considerably more local employment than today’s cruise ship business model, which is now highly exploitive of Caribbean countries. An increase in stay-over visitors drives the development of more hotels and marinas, as well as many other forms of real estate and tourism infrastructure investment. Reduced air ticket prices keep intra-regional airlines, like LIAT, flying and increase the number of airline seats in to Caribbean destinations from the rest of the world.

The cruise industry business model has changed radically and aggressively in the last fifteen years and should no longer be viewed as an ideal “partner” for the countries of the Caribbean. There is a growing sense in the islands with the highest cruise ship volumes, like St Thomas and Sint Maarten, that today’s port taxes are not adequate compensation for the overcrowding of down town areas, the pollution from the burning of heavy fuel oil and the minimal spend ashore of today’s cruise ship passengers. The mega ships now have multiple shops, casinos, restaurants and bars offering all inclusive packages that totally distract passengers from spending ashore. In the last twenty years ships’ commissions on shore excursions have risen from 10% to 50%, discouraging passengers from going ashore at all and squeezing any possible profit margin for local tour operators. Today, over 80% of a cruise ship passenger’s DISCRETIONARY spend is on board.

Most cruise ships enjoy a double high season – Caribbean for less than six months and the balance of the year in Alaska or the Mediterranean – operating virtually free of corporation taxes and with very low wage bills. The largest ships cost less than US$300,000 per cabin to build, while new hotel rooms in the Caribbean cost double that figure per room to develop and have only one high season. The cruise ship’s highly competitive business model and the further recent growth of cruise tourism in the region might be viewed as a direct disincentive for resort investment and re-investment in the Caribbean.

The total number of cruise ship passengers was over 27 million world-wide in 2018, up nearly 10% from two years earlier. In the next ten years, 106 new ships are expected to enter service and, currently, over 50% of the world’s cruise fleet is based in the Caribbean for the Winter. The hugely profitable cruise industry can afford to absorb higher port taxes in the Caribbean and will do so, once faced with a stronger negotiating entity.

Do not believe any cruise line threats that they can pull out of the region all together. The Caribbean is the only archipelago with natural beauty and sophisticated tourism infrastructure, located directly between the established feeder cruise markets of North America and Europe and the growth feeder market of South America.

Is it not now abundantly clear that, at the very least, there is an absolute logic to rebalance the tax burden between the Caribbean’s stay-over visitor and the cruise ship passenger?

Robert MacLellan
Managing Director
MacLellan & Associates
Note: MacLellan & Associates is the largest hospitality consultancy based in the Caribbean. Robert MacLellan is a veteran of the hotel and resort industry. In his early career, he was an onboard hotel officer with a major cruise line and, later, a Vice President of an explorer cruise line.
For further information: Contact robert@maclellancaribbean.com

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.

The Adrian Loveridge Column – jetBlue is Coming!

More good news with the announcement that jetBlue will commence a daily flight from Fort Lauderdale-Hollywood (FLL) airport to Barbados from April next year, opening up a second main gateway from the South Eastern United States. Depending on the final flight times, it also may present […] Continue reading

The Adrian Loveridge Column – The Definition of LIAT is Politics

LIAT

LIAT

Frankly I have employed extraordinary restraint in commenting on the subject of LIAT, because at the end of the day I believe until the politics is completely removed from the management of the airline and it is operated […] Continue reading

Complaint Letter To LIAT Airline

Submitted by Corey and Karen Burns

Julia Reifer-Jones, CEO of LIAT(Ag)

Julia Reifer-Jones, CEO of LIAT(Ag)

It is with great disappointment that I have to express my disapproval with Liat and how Liat conducts business. Most other airlines I have travelled on would simply wish to take me from A to B quickly as possible. I find it preposterous that Liat can just change a flight plan while customers have already boarded the aircraft (on a direct flight I might add).

My wife and I were departing from our honeymoon in Antigua on Monday, October 28th, 2013 and were on Liat flight # 362 from Antigua to Puerto Rico which was a direct flight to San Juan. The flight was delayed of course (“island time”) however once on the aircraft an announcement was made that we were stopping in St. Kitts on our way to San Juan, but not five minutes later we were told that we were now going south to Dominica (total opposite way than San Juan).  We arrived in Dominica at which time a grand total of 8 passengers boarded the plane.  We were then told that we had to wait for a fuel truck, which was not ready when we arrived in Dominica.  We ended up waiting on the tarmac for over an hour with no water, no food, and no air conditioning. I used to work in the airline industry and had that happened in Canada, PEOPLE WOULD BE FIRED!!! Numerous passengers asked for information about when we would be taking off and when we would be landing in San Juan as every passenger on the plane had a connecting flight to catch.  None of Liat’s customer service agents would give us a straight answer. We finally left Dominica sometime after 1:30 pm, over an hour after we should have LANDED in San Juan.

Continue reading

LIAT

Jean Holder resigned two years ago but continues to perform the role as Chairman.

Jean Holder resigned two years ago but continues to perform the role as Chairman.

We were asked to share the following article with the BU family. Although against our policy which is to be original in our postings sometimes we have to concede when there is merit in deviating from policy.

Business: LIAT’s turning point?

9/30/2013

For everything there is a season, and a time for every matter under heaven.” – Ecclesiastes 3:1

THE Caribbean is a diverse multi-cultural, multi-ethnic, multi-religious, multi-culinary, multi-genre (musical) and multi-lingual region officially made up of an archipelago of islands and selected mainland emerging territories nested between North and South America, Central America in the West and the Atlantic Ocean in the East, in and bordering on the Caribbean Sea.

The 17 English heritage administrations in the Caribbean are distributed as follows: North (7); South (7) and West (3) with an estimated population of six million, including the mainland territories of Belize and Guyana. The six French heritage administrations in the Caribbean are distributed as follows: North (5) and South (1) with an estimated population of 17.2 million, including the mainland territory of French Guiana. The seven Dutch heritage administrations in the Caribbean are distributed as follows: North (3); South (1) and West (3) with an estimated population of 0.8 million, including the mainland territory of Suriname. The three Spanish heritage administrations in the Caribbean sea are all in the North with an estimated population of 22.5 million, including the US territory of Puerto Rico. There are 33 Caribbean administrations with a total population of 46.5 million, albeit over managed, which is not to be ignored as a geographical market to be explored within the wider Latin American and Caribbean region.

Read full article

One Scapegoat Does NOT Fix LIAT or Caribbean Airlines

Robert MacLellan is Managing Director of MacLellan & Associates

Robert MacLellan, Managing Director of MacLellan & Associates

Some might believe that, for the second time in only three years, Captain Ian Brunton has been made a scapegoat by the board of directors of a Caribbean airline company – fired as CEO of Caribbean Airlines Limited in late 2010 and, this week, he resigned as CEO of LIAT. Indisputably, the overall operation of LIAT has continued to be disastrous during the last four months but so has the marketing / P R / communications function and yet the senior management there appears unchanged going forward. More importantly, the chairman, Jean Holder, and the LIAT board – which has authorised the strategy, business plan, operating budget and bank loans underlying the recent chaos and financial uncertainty – also appear unchanged going forward.

While Captain Brunton has resigned, Mr Holder is reportedly on vacation in the midst of the crisis. The chairman has been in position since 2004 and submitted his own resignation two years ago, although this was not accepted by the LIAT government ownership group at that time.

“Plus ca change, plus c’est la meme chose.” When Mark Darby, an undoubted airline industry expert, was fired from the LIAT CEO position in 2009 (and subsequently sued successfully for unfair dismissal) Caribbean 360 News carried excerpts from his interview concerning LIAT in Flight Global, a leading airline industry website. Darby pointed to “the lack of focus of the shareholder governments and the board of management as major stumbling blocks to the regional airline moving to higher heights”. He spoke of the complexity of three governments owning the airline, which involved conflicting agendas. Darby commented that this problem was compounded by weak corporate governance, with a board where few directors had held senior roles in major companies. “Instead, it operated more like a government department”, he said. Darby continued, “Board members got themselves involved in operational areas. This is one of the company’s greatest weaknesses”.

Continue reading

LIAT’S 2012 Strategy Plan Now BADLY Damaged in 2013

Submitted by Robert MacLellan

Ian Brunton, CEO LIAT

Ian Brunton, CEO of LIAT

On 28 August LIAT’s CEO, Ian Brunton, talked to Caribbean media and finally acknowledged in public some of the real facts behind the airline’s chaotic operations over the last three months. He also described LIAT’s worrying current financial position, in the same month that the airline has taken on a US$65 million loan from the Caribbean Development Bank to fund new aircraft.

However, it was reported that Mr Brunton has refused to have an investigation to hold people accountable for the recent chaos at LIAT. Instead, he said he will organise a “post mortem” (an unfortunate phrase) on what went wrong and use this to reward staff who have performed well during the crisis. Those who “dropped the ball” would be identified for “counseling or better training”.

This statement represents an unbelievable level of arrogance on the part of LIAT senior management and conveys gross disrespect for its customers! Ignore the widespread calls across the Eastern Caribbean for senior management resignations or dismissals at the airline. Instead, LIAT institutes some counseling and better training – presumably, for middle level and operative staff only? No personal responsibility accepted or culpability acknowledged on the part of LIAT’s Chairman, the CEO or the Director of Commercial and Customer Experience – all of whom have presided over three months of disastrous operations across the Eastern Caribbean and an equally disastrous public relations / communications exercise.

Continue reading

Letter to LIAT from Dominican Hotelier Requesting Executive Shake Up

I have to ask again, would a lot of the agony that LIAT customers have been forced to endure been avoided if the airline had opted for the Q400? Faster, quicker turn-around, less maintenance, longer range and no pilot re-training – Adrian Loveridge

Read letter

Main Shareholder LIAT Needs to Address the Issue of Increasing Airlift Fast!

Adrian Loveridge - Owner of Peach & Quiet Hotel

Adrian Loveridge – Owner of Peach & Quiet Hotel

It’s always very difficult to write about LIAT with absolute authority, because despite the Barbadian taxpayer being the single largest shareholder in the airline, the public for years has been denied sight of any business plan or annual audited accounts. During the recent spat with a clearly dissatisfied customer, the involvement of Sir Richard Branson and the worldwide attention this generated, LIAT fought back by posting two videos on their website, which have been subsequently removed. Perhaps on reflection, it was thought that it was more productive to address the issues, ie: the complaints, rather than battle with someone that has indefatigably demonstrated they are masters of media exploitation.

What really surprised me in one of the videos, were the numbers quoted by the Director – Commercial and Customer Experience, who stated that the airline operated ‘approximately 100 flights each day’ and carried around ‘3,000 passengers daily’. According to Planespotters, LIAT currently has a fleet of 14 active passenger aircraft with various seating capacities from 37 to 68, but collectively totalling 685. So what immediately stands out is, if the overall numbers are correct, then the average sector flight carries only 30 passengers. That equates to what could be up to 19 empty seats on each flight overall, across the fleet.

Continue reading

The ATR Story by LIAT

Submitted by M.R.Thompson

LIAT TO UPGRADE TO 11 ATRS over two years

LIAT to Upgrade  to 11 ATRs over a two year period

Quote from Barbados Nation Newspaper of June 27, 2013…

“LIAT, with the partial backing of some Caribbean governments, is enhancing and transforming its fleet, with 12 new aircraft over the next two years that will cost investors US$100 million.”

This very simple but not fully explained statement got me in the market for an ATR72, pretty cheap if you can buy 12 aircraft for $100m, that’s only $8.3m per aircraft. I think I’ll take a dozen at that price myself. A new ATR 72 500/600 model sells for $18 to 23m, used 10 year old aircraft still demand some $12m each.

Where did LIAT find such a good deal on these ATR72’s or is there some very creative book keeping promoting this exceptional deal. Creative booking is really a Caribbean political area of expertise. As LIAT is an airline owned by various countries citizens some questions should be asked to explain this seeming unrealistic purchase price.

Continue reading