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.

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?

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.

The REDjet Revolution

BU has been following the progress of new entrant REDjet to the regional air transport market with interest. Not since Carib Express have we seen a new airline generate so much debate. The airline was approved to fly by the Barbados government albeit after a mountain of bureaucratic hurdles had to be leaped. The airline had to confront a suspicious minister of transport in Jack Warner  in its quest to fly to Trinidad. A recent report suggests permission for REDjet to touchdown at Piarco International Airport should be known when the cabinet meets on Thursday.  It was left to the Guyana government to welcome the airline free of controversy.

If we are to judge by the comments emanating from REDjet management the response to the airline has been overwhelming. Why should this be a surprise to anyone when in recent months it has been cheaper often times to fly to Miami or New York than to Antigua or Jamaica.

It is ironic and exposes the hypocrisy in the region that external players are the ones to attempt to make regional travel affordable. We are not ignoring the contribution of local investor in the airline Bizzy Williams. For decades our political leaders and intellectuals, or should we say pseudo-intellectuals, have pontificated about the importance of freedom of movement to the success of the regional integration movement. However they have all failed to deliver a solution which would make regional travel affordable. Barbados, St. Vincent and Antigua are the major shareholders in LIAT which currently has the monopoly on regional transport between the islands of the Eastern Caribbean. Whether because of mismanagement or a flawed business model LIAT has been a generator of debt for its shareholders and venerable Chairman Doctor Jean Holder through the years. The less written about Caribbean Airlines and Air Jamaica the better.

American Eagle To Suspend Its Service Out Of Barbados To Puerto Rico

Adrian Loveridge - Hotel Owner

I WAS SURPRISED to read in this publication last week that American Eagle will suspend its service to Puerto Rico from April 15. Especially as according to the American Airlines website, a twice-daily service five days a week and once daily on the other two days of the week will continue from St Lucia to San Juan. Grenada also retains a thrice-weekly direct flight.

St Lucia’s minister of tourism was recently quoted in the media as saying that his government was negotiating with American Eagle to resurrect the St Lucia to Barbados route, so this may represent some sort of alternative link to Puerto Rico depending on flight schedules.

Otherwise it will involve a minimum travel time of four hours with a change of aircraft in either Dominica or St Lucia and Antigua with LIAT.

The loss of at least 280 airline seats per week must be a concern to our tourism planners as San Juan was frequently used as a hub to connect passengers from other United States cities.

Read full article in Nation Newspaper

What’s Wrong With Our Politicians?

Here is what Kammie Holder is writing elsewhere – Credit to Nation Newspaper 16/07/2010

Kammie Holder

Too many of our leaders seem allergic to eating humble pie and come over as  insular in their thinking. The CARICOM Single Market and Economy is under threat by narrow political ambition.

The Caribbean Court of Justice is still not accepted by Trinidad where it is headquartered. St Lucia does not give LIAT the financial support even though it heavily relies on intra-regional trade and tourism.

Guyana offers land to extra-regional countries cheaper than it offers it to fellow Caricom members. Where is the visionary leadership within the Caribbean? The new prime minister of Trinidad and Tobago, Kamla Persad-Bissessar, recently made what I considered to be the insular statement that “Trinidad will not be an ATM”.

Would you believe that Trinidad’s largest market for its goods has been within the Caricom for years? These Caricom  countries seem obligated to acquire Trinidadian goods, despite that cheaper alternatives can be had within Asia. Thus, it’s imperative the new prime minister of Trinidad tread cautiously and think before making such ready statements. Someone should remind Persad-Bissessar that elections are over and words can be misconstrued.

With Oil Now Dropping to US$40+ A Barrel, WHY Have LIAT’s Fuel Surcharges Not Been Further Reduced?

Submitted by Adrian Loveridge

Buy the cheapest currently available return airline seat from Barbados to St. Lucia and you will pay US$200.45. Of that figure US$125.45 are passenger facility charges, VAT, Airport Departure taxes (US$52.50) Airport Authority or Passenger tax and a massive US$47.50 in fuel surcharges and insurance.

• First of all I wonder how consumers would respond, if hotels and other tourism partners starting showing insurance as an additional add-on?

• Secondly, exactly what is the current fuel cost of flying a full Dash 8 to St. Lucia from Barbados and back?

Less than US$2,375 or the fuel surcharge applied methinks!

LIAT, Political Football Par Excellence!

LIAT Chief Makes A Valid Point: Adrian Loveridge

 

LIAT Chief: Blame heavy taxes

In a Nation news story today (Tuesday 12th February) under this heading, the Chief Executive Officer of LIAT is blaming regional Governments, including the three principal shareholder’s for the high intra Caribbean airfares. (Nation News link here) Mr Darby has in my humble opinion a valid point. Departure taxes, handling fees and other user fees have climbed to an all time high. But let us examine an example of these fares. Booking a month ahead and looking at the cheapest option on LIAT’s website for return flights from Barbados to St. Lucia, the fare is US$240.24. Of this, the outward taxes and add-ons are US$55.87 and on the return leg, US$57.37.

So a total of US$113.27 or 47% of the overall airfare is made up of taxes and additional charges. What Mr Darby fails to mention is that of the US$113.27 in add-ons, some US$28 is made up of LIAT’s own fuel and insurance surcharge. There is no doubt that the new Minister and Tourism and all the associated agencies involved will currently be grappling with ways to redress the decline in intra regional travel.

Source: Barbados Free Press

We read the above blog on Barbados Free Press and was forced to offer our two pence worth.

Is it not ironic that Adrian Loveridge, our resident tourism expert, who has been vilified and invective hurled at him by all and sundry on the issue of LIAT? He has been consistent in his belief that LIAT, our regional airline, MUST be held to a high standard regarding its management. Is it not unacceptable that at a time when our tin pot leaders in this region are promoting regional integration, it has become an unbelievable farce that ticket prices for intra-regional travel have now reached a point where to travel is viewed with some trepidation by West Indians.

It was reported in the news recently that Governor of the Central Bank of Barbados Marion Williams validated the dark reality that intra-regional travel has fallen by 16% in 2007 compared to 2006. The article above which quotes LIAT’s CEO Darby confirming that 30% of a LIAT ticket reflects taxes levied by the respective island governments. Is this not a laughable situation of an immense proportion?

Was It A Misprint?

LIAT’s more than EC$300 million (BDS$225.3 million) debt has been erased from its books and the airline could be on the verge of a profit.

This story was carried in the Barbados Business Authority 14^th January 2008. The article went on ‘In praising the board’s tremendous feat, Holder said that at the end of 2007, the board had presented an airline that was completely debt-free’.

‘Completely debt-free’!

Does this include ‘the US$60 million (BDS$120 million) loan package from the Caribbean Development Bank, that was reported in the Nation on 29^th July 2007?

I really think that Dr. Jean Holder (the Chairman) and Mark Darby (the CEO) of LIAT need to clarify this to the taxpaying Caribbean people.

Adrian Loveridge

14^th January 2008