Tourism Watch: Understanding LIAT’s Strategy

Adrian Loveridge – Owner of Peach & Quiet Hotel

Whether you attribute the now infamous saying, “there are three kinds of lies; lies, damned lies and statistics’ to a former British Prime Minister, Benjamin Disraeli or American author Mark Twain, it is perhaps even more true today, than it was then. And in the current silly season, I am sure we are going to witness many examples. I would prefer, as they say in the popular TV series CSI, ‘follow the evidence’, for those few people who still watch television.

When you look at the long stay visitor arrival figures, it is not all doom and gloom, and I wonder if we can learn from it. Take Canada, our fourth largest source market. Between 2004 and 2007 we welcomed 199,894 Canadians. For the four years 2008 to 2011 that number grew to 265,390, a rise of nearly 33 per cent.

While the numbers are yet to be released for the final month of 2012, up until the end of November, 63,053 Canadians came to our shores, compared with 71,953 for the whole of 2011. So if December turns out to be a strong month, we should not be too far behind the previous year.

Sadly, it does not negate the losses in other markets.

WestJet Model Creating Opportunity

Adrian Loveridge – Hotel Owner

It is certainly not all doom and gloom in the travel and tourism industry. Take WestJet, the Canadian low cost carrier as an example. This April it posted record load factors, achieving an average of 86.2 per cent and a revenue passenger miles growth of 8.2 per cent over last year, together with record first quarter profits. The airline handled over 120,000 more passengers in April 2012, hitting a total of 1.48 million for the month. During the same three months, Air Canada’s losses climbed to CAD$210 million.

WestJet founder, Englishman Clive Beddoe made no secret at the time when the airline was formed in 1996 that it was modelled on the highly successful US SouthWest Airlines, adopting the single aircraft type with different variations. However, the current President and chief executive, Gregg Saretsky, has moved away from this business plan to place a firm order for 20, and options on another 25 of the Bombardier made Q400 turbo-prop planes. In his words its to ‘connect the dots’.

REDjet’s Demise + LIAT’s Haemorrhaging = Regional Transportation In Crisis

His Excellency Desi Bouterse, President of Suriname, Chairman of Caricom

Redjet as still not paid its staff .The last time they were paid was February 2012.They will not have any pilots if they come back,because most of the pilots are looking jobs.Also they still have not paid some of there pilots who had left from last year.

 Andrew

The notes to support this blog were done in December, 2011 and given the demise of REDjet have taken on relevance. Columnist and committed regionalist Sir Ronald Saunders wrote an article a few months ago which probed the current state of LIAT and anticipated what its failure would mean for the region. Over the years there has been the fixation with movement of people and not the concomitant interest in regional air travel and financial settlement to support trade. Implementing one of the three at the expense of the other will always be an exercise in futility for those who want a more integrated region..

LIAT over the years has become synonymous with problems. Sir Ronald’s article paints a gloomy picture for LIAT by making bold that LIAT will collapse if shareholder governments are not prepared to implement required changes in short order. Prime Minister of St. Vincent Ralph Gonzales, who is Caricom’s lead spokesman for transportation along with Barbados, the largest shareholder, have hinted the number of shareholders will be increasing by two. Has there been an update on this matter?

What Concessions Did REDjet Receive?

George Hutson, Minister of International Business and International Transport

David Ellis who has become VOB’s goto moderator since the demise of Tony Marshall shared some interesting information today [26/3/2012] to his midday audience. On the subject of REDjet many Barbadians were under the impression REDjet was being treated like a stepchild compared to other airlines who are suspected of receiving subsidies from government. However Ellis received feedback from a source which suggested the following:

To date REDjet has received the following concessions amongst other exemptions and benefits:

• Exemption of corporation tax for 15 years
• No personal tax for its expatriate employees
• Waiver of import duties on aircraft spares
• Waiver of taxes on lease of aircraft
• No withholding tax on dividends or investment income
• No withholding taxes on interest from shareholder loans

BU has to thank our email correspondent [JD] who ensures BU remains informed on most issues.

Bear in mind REDjet has been carping about creating a level playing field and the like. What the REDjet experience has exposed is that there is too much wheeling and dealing under a cloak of secrecy. There is absolutely no reason why information about concessions – announced by Ellis – should not have been in the public domain. Here is another example which reinforces the call for the Freedom of Information Act to be enacted with haste. It is taxpayers money and benefits being distributed through its servant, the government of Barbados.

If there is a time for a new order of business to take root, the time is now.

REDjet Grounded!

The ‘sudden’ demise of REDjet has been a talking point in the Caribbean in the last few days. Each day that REDjet remains grounded secures another nail in its coffin. It would be a pity if this airline goes belly up the way of Carib Airlines and others before it.

It is perplexing how two local backers of REDjet, Messrs Kyffin Simpson and Bizzy Williams, would attempt to launch a low budget airline before securing all the regulatory approvals. The result of which compromised its finances or so it seems.

What went wrong?

It is hard to believe these two men who can boast of successful track records in business would commit what seem to be basic errors in judgement.

A scan of the Trinidad media space has revealed that Barbados is being short changed by how the REDjet issue is being communicated. Read the following article reproduced from the TT Guardian to see why.

Link to article:   Decision to ground REDjet takes Caribbean by surprise

REDjet And re-Discover Caribbean

Adrian Loveridge - Hotel Owner

By now, much of our energy would be going into fine tuning the annual re-DISCOVER the Caribbean Show, which usually takes place in late April. Just in time for the longer and leaner eight summer month tourism season. Sadly, unless a major sponsor comes forward, it will not take place this year and this may prove to be one of the biggest mistakes ever.

The Barbados Tourism Authority lost interest in what would have been the eighth annual show by reducing their already limited financial support and not even being prepared to ‘man’ a stand for the two days of the event. This despite a compliment of over 130 staff members and the enthusiastic support in the past by the current Minister of Tourism. In fact, before entering office, he won and enjoyed one of the spectacular prizes donated by our many exhibitors.

It became ever more difficult to explain to the twenty other participating Caribbean countries, who were willing and enable to send a delegation, often at considerable cost, when the national marketing agency of the host country was half-heartedly supporting the endeavour.

LIAT, REDjet and Caribbean Airlines – Who Will Pay The Price?

Submitted by BarbadosFirst

George Hutson, Minister of International Business and International Transport.

It has just been told to me that Barbados Civil Aviation Authority granted permission for Caribbean Airlines to fly the Barbados/Guyana and Barbados/St Lucia routes – two of the most profitable routes for LIAT (in which Barbados is the majority shareholder). This is after giving REDjet the same license. The Barbados Government now wants to catspraddle LIAT which we got our taxpayers money invested in???? Is this a bargaining chip for a fishing agreement with Trinidad? Where is the Minister responsible for International Transport? We really need an answer on this one…

The region is too small for 3 airlines to be flying these routes!!!! Or is this a response to the strikes at LIAT. .All the same, I see a loss for the taxpayers of Barbados in LIAT

Redjet: Playing The Fiddle As It Burns

Submitted by Looking Glass

The airline having promised wonders announces imaginary success. In the process Barbadosbecomes the culprit but to date not a word from us. That we need to give the green light–also suggested by the CEO–is another bit of unadulterated falsehood. Barbadosis not Caricom. It cannot control or dictate to the islands what they can should or cannot do. As such it cannot give the Green Light–whatever that means–for another country to grant licence to any airline. Yes the airline was given licence to operate from the country. However, at this point in time we are not a shareholder and cannot dictate or determine how the airline should behave or what others should or must do. That the other countries have not seen it fit to grant or formally announce the granting of licences to the airline has nothing to do with us.

St Luciais concerned about the delay in getting Redjet to operate there and “has written to the government about it” (Nation 20/9/2011). The minister must know that Barbadoscannot dictate what others should do. So why the letter if indeed there was one? That he like some of the airline officials should indulge in falsehood raises suspicion. Is there much more in the mortar than the pestle? More importantly why has our PM remained silent?

Redjet has been granted only Permission not Licence to operate out ofSt Lucia. Permission unlike Licence implies conditionality and is temporary to begin with. The minister should explain the granting of only Permission rather than Licence. The airline servicesGuyana. No problem there. So why has the airline, permission granted some months ago, not seen it fit to service St Lucia from Barbados? Economically the route is unlikely to be profitable and or sustainable even if theGuyanaroute is included.

Redjet: About Time To Say Goodbye

Submitted by Looking Glass

REDjet CEO Ian Burns

Redjet reminds one of a dying man gasping for breath. The CEO, having claimed to have met with Caricom officials, is claiming fictional success and profitability almost everywhere except St Vincent and attributing success to the Prime Minister. He told the Nation (7/20/2011) that your “intervention paved the way for Redjet to fly to Trinidad and Jamaica.” We supposedly own 51% of the airline and have a minister on the board but so far not a word from the PM or anyone there. Is this a case of fiction following fiction? Now we hear that Redjet is seeking to operate a charter service between Florida and Dominica, and six new low fare routes will include Panama and Antigua in three months time. Does Redjet have license to operate out of the USA or anywhere beside Barbados and Guyana? And through it all the normally very critical opposition remains strangely silent

The Advocate (8/9/2011) reported that Redjet received licences to operate scheduled passenger air services to and fromTrinidad,GuyanaandJamaicaand intermediate and beyond points were granted “in accordance with the agreement between the governments ofBarbadosandTrinidadand beyond their respective territories.” The Trinidad Express (8/6/2011) reported the same thing and that St Lucia’s Civil Aviation Minister told the Caribbean Media Corporation (CMC) “the airline was granted entry into their market a couple of months ago and could begin flying in October……We had meetings in Panama with Redjet with the idea of getting Redjet to operate into Panama both out of St Lucia and Barbados.”

The Pride (Toronto) (10/8/2011) noted that “the licences were granted in keeping an ‘open skies’ agreement between Port of Spainand Bridgetownthat allows for mutual recognition of carriers and automatic permission for air services between and beyond their respective territories.” The “open skies” policy is an ‘agreement’ between certain countries to which none of the islands are signatory. That Trinidad whose airline (CAL) doesn’t serviceBarbados has or will facilitate Redjet makes no sense. The PM stated that competition between Redjet and Liat should be seen as good for business and “part and parcel of the right to freedom of movement as enshrined in the Treaty of Chaguaramas” (Advocate 7/6/2011). The Treaty relates to land sold to theUSA ages ago. It has nothing at all to do withBarbados or the islands. That you were told this falsehood by a certain soul inTrinidad evokes more than suspicion.

REDjet: Cheap Flights And Validity

Submitted by Looking Glass

REDjet’s CEO, Ian Burns

First congrats to Joseph “Reds” Perreira. “Living My Dreams” is indeed a beautiful cover drive that belies the WISU experience.

According to the CEO the World Bank 2006 Report on air travel in the Caribbeanidentified the “need for competition and private capital to bring the region’s aviation capacity in line with other regions in the world.” Really Mr.CEO? Since when does competition facilitate standards? I suggest you send a copy of the report to the BU. Capacity has nothing to do with world standards. Where in the world does Redjet’s advertised fictional “poor man” fares apply? Until Redjet the region had been serviced by LIAT, BWIA (Caribbean Airlines) and other international carriers in ‘line with world standards’ without foreign “private capital” and with hardly a rumour about cheap flights. Foreign investment and benevolence do not go hand in hand. Exactly how much did it costBarbados to entertain Redjet?

Correct me if wrong: I believe Redjet is ‘connected’ to a travel agency in Barbadosthat is owned by Trinidadians. Ask who the shareholders are. The fleet consists of two 150 seat MD planes acquired (Leased) for two years at around US$10,000.00 per month. The planes, about fit for the scrap heap, do not meet certain standards and might not be allowed intoNorth America or theUK. There is no concrete evidence that Redjet will indeed be allowed to service the region. So will the owners of LIAT support the kind of competition that will push the airline into the red or out of business? Only a fool will do that.

REDjet Seeing RED!

REDjet forced to send home eight employees

The point is that the Government has been fully behind the establishment and operation of the REDjet airline, it has given REDjet the necessary certification … and it is incumbent therefore on this Government to add its voice to the call by REDjet for more prompt treatment in the region than it is getting  – Opposition Spokesman Ronald Toppin

 

REDjet actually got some kind of approval to fly the T&T and Jamaica routes, all that is required to complete the process is something Chairman of REDjet Ian Burns refers to as political and economic approval.  In a nutshell the approval just received from Jamaica and Trinidad confirms that the airline satisfies the safety requirements of both countries but …

It has been obvious to BU for sometime the big two i.e. Jamaica and Trinidad have been stonewalling the Barbados registered airline approval application process. The two countries recently mustered the political and economic will to seal the Air Jamaica and Caribbean Airlines (CAL) merger deal. Perhaps if it required such a long time to seal a deal in their interest, why the hell can’t REDjet wait?

Most surprising has been the feeble defense emanating from the Barbados government and other stakeholders about the position REDjet finds itself. It cannot be said that the local and regional publics have not been made aware of the bureaucratic pummelling Redjet has had to absorb. Both Bizzy Williams, a local investor in the airline and Chairman Burns have been refreshingly vocal on the blatant mamaguying being demonstrated by Trinidad and Jamaica.

REDjet Sabotaged By Caricom: The Big Two Jamaica And Trinidad

Two events occurred in the news this week which confirmed to BU that Caricom is in a coma. A mini-Caricom summit held in Guyana saw four heads absent, Prime Minister of Trinidad among them. In the obligatory end of summit communiqué which nobody reads except Rickey Singh, the heads advised the world implementation of a common currency would be further delayed until a review of the Guyana-based Caricom Secretariat. Have to admit the decision was a surprise, in fact the Caribbean is still in shock!

The other happening was REDjet’s decision to cancel plans to fly the Trinidad and Jamaica air routes. It is no secret both Jamaica and Trinidad have frustrated REDjet’s application to operate its low-cost airline between Barbados, Guyana, Trinidad and Jamaica. Barbados and Guyana gave the all clear to REDjet about a month ago.

Barbados Jurisdiction Category II Rating Explained

Posted as a comment on another blog

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“Category 1 airport status in corrupt Antigua; Category 2 status in number one developing state Barbados.” – Kiffin

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… the OECS created the Eastern Caribbean Civil Aviation Authority (ECCAA), funded it properly, and gave it some teeth and experienced people. The DCA here Barbados is still merely a gubmint Department over seen by a Minister, while the ECCAA is an agency – a Civil Aviation Authority (CAA) – which is to some measure independent and apart from politics, and collect their own revenues (as well as some government financing in many cases).

The DCA in Barbados has for decades been run by Air Traffic Controllers who rose through the ranks following very narrow rules and have little or no breadth of experience or knowledge, and (in Barbados) for their entire careers they have been abused by their Directors who have ensured they have as little say in their own professional lives as possible.

From personal experience I can tell you that the Controllers in Barbados have lost every part of their jobs – which is standard internationally – and gave them insight into airspace outside of Barbados. For instance, they are trained solely in Barbados, and “FAM” (familiarisation) flights to other islands or even to north America were cut off many decades ago. They are also treated with scant respect – and so have as much interest in expanding their personal horizons as a coffee cup.