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KINGSTOWN, St Vincent and the Grenadines, Thursday February 3, 2011 – Prime Minister Dr Ralph Gonsalves says Trinidad and Tobago’s national carrier, Caribbean Airlines (CAL), will be creating unfair competition for LIAT if it goes through with its plan to expand services into the Eastern Caribbean.
In fact, he argues that doing so goes against the rules of the Caribbean Community (CARICOM), the Revised Treaty of Chaguaramas and the multilateral treaty signed by Heads of Government in 1996.
A tough-talking Gonsalves leveled the charge yesterday at a press conference held after a shareholder meeting that was also attended by Prime Minister Freundel Stuart of Barbados and Antigua and Barbuda’s Baldwin Spencer and the airline’s Chairman Dr Jean Holder and CEO Brian Challengers.
He said the treaties clearly addressed the issues of fair competition, the establishment of tariffs and subsidies and the interests of LIAT must be protected based on those provisions.
“If somebody wants to come into this region and take out LIAT from the air and replace it with a monopoly based outside of the shareholders of this sub-region, there is a problem. And bear this in mind, while we have to pay US$102 a barrel right now for aviation fuel CAL they pay US$50 dollars because they are subsidized by the government of Trinidad and Tobago…The Trinidadians call it a hedge; it is a not a hedge, it is a subsidy. Let us call the animal by the name that it is. So you want to come into my space with subsidized fuel and take me out of the air…and at the end of that you will then decide at what price you will charge and which services you will have?” Gonsalves said.
“Well that is not permissible.”
“I have no problem with competition for LIAT; none whatsoever. In fact I can’t stop another airline coming in on the basis of the multilateral treaty but you have to come in fairly. You have to come in with fair competition. If you are interested in us doing something together we have to talk,” he added.
Gonsalves, who is St Vincent and the Grenadines’ Minister of Civil Aviation as well as the prime minister with responsibility for air transport within CARICOM’s quasi Cabinet, said the carrier has already started test runs but has not communicated that to him or any other regional leader.
LIAT and CAL had talks in January 2010 on working together and Gonsalves suggested that a nexus is still desired.
But he said it must be in the spirit of cooperation and not takeover, as has been suggested by some in the twin-island republic.
“I find it very strange that officials from the government of Trinidad and Tobago and CAL could be talking about LIAT as though they own it, that they will come into the Eastern Caribbean and it is only a matter of time that they take over LIAT,” he said.
“I did not sign on to the revised Treaty of Chaguaramas to be somebody’s colony or somebody’s metropolitan centre. That’s not the bargain which we made, so I want to put down my marker very clear on this subject.”
Trinidad and Tobago’s Works and Transport Minister Jack Warner recently hinted at a possible merger with various airlines, including LIAT, to make CAL the airline of the Caribbean. But LIAT has denied any merger plans.
And speaking in Parliament last week, in response to questions about whether the purchase of nine planes from France-based aircraft manufacturer ATR had anything to do with replacement of LIAT’s existing fleet of aircraft, Warner also said that Cabinet had been advised that the proposed fleet upgrade was “the first step in attaining the vision of premier region placement in an intra-regional network”.
“It was further identified that there was a desire to replace the operations of LIAT 1974 Limited and that this was a factor with ATR to attain further economic scale with regard to fleet planning,” he added.
ATR announced on Tuesday that CAL had signed a deal for the purchase of the 68-seater turboprop planes at a price of US$200 million.
It said that first deliveries are expected in October and, with CAL will replace its current fleet of five Dash-8 300 aircraft in its domestic routes, and “add new frequencies linking Trinidad and Tobago and surrounding destinations”.
KINGSTOWN, St Vincent and the Grenadines, Thursday February 3, 2011 – LIAT has served notice that it will cut unprofitable routes if some countries refuse to give the airline the kind of assistance offered to foreign carriers, as the company revamps the way it does business in the Caribbean. Chairman Dr Jean Holder has also suggested there will also be job cuts as the carrier, which is projecting a US$1.5 million loss for 2010, tries to get on sound financial footing.
“LIAT does have to address some cost-cutting issues if it’s going to survive in the face of upcoming competition,” he said yesterday afternoon at a press conference held after a shareholder meeting in St Vincent, attended by host Prime Minister Dr Ralph Gonsalves, Barbados’ Prime Minister Freundel Stuart, and Prime Minister Baldwin Spencer of Antigua and Barbuda – all leaders of LIAT’s shareholder governments.
Among the measures under consideration is dropping routes which are not commercially viable.
LIAT has complained that several countries provide revenue guarantees to foreign airlines that fly to the region, but have strongly resisted doing the same for the regional carrier. Holder said yesterday that will no longer be tolerated.
“When we’ve done a cost benefit analysis of a particular service and it does not profit us, especially if the person is not a shareholder in the company, then we will not be able to continue that service without assistance,” the airline chairman said.
“So what I’m saying is that there’s going to be very much a new approach to how we do business in the region because the competition is coming and it’s coming heavy as far as we can see,” Holder added, in apparent reference to Trinidad and Tobago’s Caribbean Airlines (CAL) announcing that it will start flying into the Eastern Caribbean and new airline Redjet planning to enter the market with base fares which it said would be as low as US$9.99.
Holder said LIAT is engaged in a strategic planning process and it’s hoped the final session will be held this month.
“We’ve had a number of proposals put on the table which suggest that LIAT cannot continue to do the same thing it has been doing forever and expect a different result…We’re discussing how to change this airline to do things like lowering the cost of travel and at the same time giving satisfaction and…staying in business,” he said, although not revealing what the proposals are.
Payroll cuts needed
On the issue of staff reductions, Holder did not go as far as confirming media reports that LIAT is planning to send home 100 of the 940 workers it currently employs, but he did acknowledge the need to cut the payroll.
“Nobody wants to lay off staff,” he said. “It’s the most painful thing for those who manage a company, but at the same time we cannot operate with a complement of staff which is in excess of what the company needs.”
Prime Minister Gonsalves told the press conference that LIAT could reap significant savings – US$3 million every year – if it closed city ticketing offices across the region, but he said not all of the 40 people employed in these offices would have to be laid off.
“You may be able to use staff in other parts of your operation, say at the airport. Some may be willing to go; some may have an interest in migrating, for instance; some may want to go off and study and they’d like to take their golden handshake, but you will save a lot of the fixed costs, so these are practical matters which any company would have to be looking at very seriously,” he said.
LIAT closed its Port of Spain ticketing office on January 28, informing customers that they could book flights through the airline’s hotline, website, or at its airport office or through a local travel agent.
Meantime, Holder said the price of fuel has also been a major stumbling block for LIAT.
He explained that the airline started 2010 on an International Air Transport Association (IATA) projection of US$84 a barrel, but the airline found itself paying over US$100.
Prime Minister Gonsalves pointed out that the prolonged unrest in Egypt could push the price past the current US$102 and create even more problems.
LIAT is also looking at expanding its fleet and a meeting will be held in Barbados, perhaps as early as next week according to Gonsalves, to discuss that further.
ST THOMAS, USVI (MCT) – The US Virgin Islands Tourism Department announced on Wednesday that American Airlines will increase nonstop jet service from Miami to St Croix and St Thomas starting in June.
The additional flights will increase air capacity by 2,600 seats per week. Tourism officials said the move signifies the highest airlift growth on American Airlines to any Caribbean destination with the exception of San Juan and Santo Domingo, Dominican Republic.
Beginning June 10, American Airlines will increase its service from Miami to St. Croix to two daily nonstop Boeing 737 flights.
On St Thomas, the existing two daily, nonstop Boeing 737 flights from Miami will be increased daily to three.
“As the region faces diminished service on American Airlines from Puerto Rico, it is encouraging that our partners at the airline are taking proactive steps to ensure continued robust jet service to the territory from their Miami hub,” Tourism Commissioner Beverly Nicholson-Doty said in a written statement. “We continue to work closely with all of our airline partners to build demand and increase service to the Territory.”
Over the last year, the Tourism Department has worked with airlines to provide more than $3 million in cooperative marketing initiatives to support airlift to the territory.
GEORGETOWN, Guyana, Monday January 31, 2011 – Officials of Caribbean Airlines are working out a plan aimed at making travel more affordable and easier for passengers travelling out of Guyana.
Following a meeting involving President Bharrat Jagdeo, Chairman of Caribbean Airlines George Nicholas III, Vice Chairman Mohan Jaikaran and other officials, it was revealed that the Trinidad and Tobago owned airline will introduce ‘The Spirit of Guyana’ flight.
With that service, the airline will fly the Guyana to New York route thrice weekly and the usual difficulty which passengers face transiting Trinidad and Tobago is expected to be eliminated.
A statement from the government said that the airline is also proposing a Guyana-based Caribbean Airlines flight to some domestic and regional destinations.
During the meeting with the airline officials, President Jagdeo listed several issues that require attention including airfares from Guyana to New York which the company said should be reduced when the next generation of aircraft is introduced.
The Guyana leader has, for a long time, been lamenting what he described as “unconscionable monopoly” on airfare increases by some airlines and said at one point that the government was considering re-entering the airline business to change the situation.
He made reference to situation where travellers sometimes pay more from Guyana to Trinidad and Tobago than travellers pay from the twin-island republic to the US.
President Jagdeo said that for Guyana to benefit from an open economy there is need for services that are appropriately priced and from which customers get value for their money.
The three major shareholders of the regional airline, LIAT, will meet in St Vincent on Wednesday to consider a number of issues related to the regional air transportation sector. Prime Minister Dr Ralph Gonsalves will host his colleagues from Barbados, Prime Minister Freundel Stuart and Antigua and Barbuda Prime Minister Baldwin Spencer “to discuss a number of matters, based on an extensive agenda”, according to a statement issued here. “Among matters that will be looked at include the operational plans and performance of LIAT, Financial reports and projections and industrial relations and human resource development,” it said, adding that Wednesday’s meeting will also look at the attempt by the Trinidad-based Caribbean Airlines (CAL), to begin a service into the Eastern Caribbean. A number of top LIAT officials, including the Chairman of the Board of Directors, Dr. Jean Holder will be attending the shareholders meeting, the statement said. Over the weekend, an Antigua-based newspaper reported that LIAT employees were pondering their future amidst reports that the carrier is on the verge of placing close to 100 of them on the breadline. LIAT employs more than 900 people in 22 destinations throughout the Caribbean. The majority of the workers, more than 600, are based in Antigua where the airline is headquartered. (CMC)
PORT OF SPAIN, Trinidad–The REDjet airline, which boasts of offering affordable airfare without the hidden in-flight fees, will be launched in Trinidad and Tobago and across the Caribbean very soon. REDjet.says that its passengers can travel in comfort and customise their experience by either including or excluding extras like entertainments and meals.
The Business Development Director of REDjet, Robbie Burns, was working within the Caribbean region and his position required him to travel frequently which proved to be both costly and time consuming. He envisioned a cheap, convenient and stress-free flying experience. “I was amazed at the cost of inter-regional travel and wondered why a true low cost carrier (LCC) did not exist in the Caribbean, as it was and still is the only region in the world currently unserviced by such.”
According to him, there are only a few other airlines operating in the Caribbean and tickets are costly.
“Regional carriers are aware they are currently operating a monopoly of sorts on some routes. As a result of this they are charging exorbitant fares simply because they can. Airfare from Barbados to Guyana roundtrip at times can average USD$550 to USD$600. This is the same airfare from Barbados to Miami roundtrip. As a result of not having a choice, travellers are usually forced to pay that rate.”
He teamed up with his father, CEO/Chairman Ian Burns, and conducted extensive research into getting the project in motion. The airline initially started in Jamaica in 2008 and their operations moved to Barbados in 2010. Four years later, REDjet is on the verge of getting off the ground. REDjet has strategically partnered with corporate sponsors in Trinidad like Digicel and Bill Express to ensure that they can offer the most competitive ticket prices.
Sales and Promotions Manager Alicia Lynch explained that REDjet wants to create choices for flyers and eliminate charges for preferential services.
“The entire business model is new to the Caribbean. You will only pay for what you want. Why should you pay for two bags at 50 pounds each if you only have one bag that weighs 30 pounds? Why should I have to pay for a ‘complimentary’ snack if I’m not hungry? Why should in-flight entertainment be included in my fare if I plan to sleep the entire journey? We will offer the lowest fares, fastest turnaround times, less lost bags and less delayed flights.”
REDjet will launch regionally on the same date which is soon to be announced. “No territory will receive a specialised launch per se. There are several avenues of advertising planned which will ensure when we do launch our fares, that Trinidadians and the rest of the Caribbean territories will certainly be made aware.”
JetBlue has added fuel surcharges of $35 each way on flights to and from Puerto Rico and $45 each way on flights to and from other points in the Caribbean.
Consumers may feel the bite, but won’t see the charges broken out in airfare. The Transportation Department does not allow airlines to list fuel surcharges separately, so they are bundled into the basic fare.
Chief executive officer Dave Barger disclosed the surcharges in a conference call with investment analysts to discuss fourth-quarter earnings.
He said he is “encouraged” that the airline industry as a whole is raising fares to cover the increased cost of fuel.
The burden of that increase must be passed onto consumers, he said.
Oil prices have been very volatile in recent weeks, sometimes creeping past $90 a barrel.
In response, airlines have had four rounds of fare hikes since mid-December.
Barger said that JetBlue’s average one-way fare in 2010 was $141, 8% higher than its average fare in 2009
KINGSTON, Jamaica, Friday January 28, 2011 – The special Tourism Advisory Council (TAC) that has been established by Minister of Tourism Edmund Bartlett to provide guidance on long term tourism policy and strategy held its first meeting yesterday, with the matter of airlift security for Jamaica being the main issue of focus. Minister Bartlett, who convened the inaugural meeting of the TAC, said the issue of airlift security, which is critical to maintaining and growing tourist arrivals, will be the first matter for attention. “Jamaica is highly challenged to maintain airlift into the island, and to achieve this requires partnerships, which is the most critical issue the council has to deal with,” he said. The Tourism Minister revealed that Jamaica’s airlift routes have been proving to be less attractive to airlines when compared with other destinations such as Barbados. Hence, he said it was imperative for a way to be found to keep airlines flying to Jamaica given its importance to growing the tourism industry. Bartlett maintained that addressing the issue of airlift is also critical to efforts to tap into emerging markets such as Brazil, Russia, India and China, as many of them require long-haul trips. The TAC Chairman, Maurice Facey, expressed confidence that the expertise of the members will redound to its success in providing the right kind of advice and guidance necessary for the benefit of the tourism industry. He emphasized that tourism should serve as the pillar on which the development of Jamaica’s economy should rest, as it provides the best way to earn our way out of our economic problems. With the mandate of helping to shape the strategic direction of policies for the tourism industry, the terms of reference for the Council include advising the Minister on the long term policy direction for the tourism sector, as well as on global, regional and local issues affecting the operation of the sector. The Council is also charged with the responsibility of forging appropriate partnerships and strategic alliances, and advising on strategies aimed at further diversifying our tourism product, expanding source markets, achieving growth in the sector and identifying a sustainable source of funding to support marketing and airlift programmes.
State carrier Caribbean Airlines was the third biggest customer of European aircraft manufacturer ATR in 2010. Based in southern France, ATR builds and sells 50-74 seat turboprop planes. In a statement yesterday, the company said it booked orders for 80 new aircraft in 2010, plus options for 33 more. ATR generated a turnover of US$1.35 billion — three times higher than its turnover in 2005. A sale to Caribbean Airlines last year contributed to ATR’s success last year. Caribbean Airlines bought nine ATR 72-600 aircraft from ATR in a deal worth more than $1.2 billion (US$200 million). First delivery of the planes are expected later this year. The order for nine planes made Caribbean Airlines and Trinidad and Tobago ATR’s third biggest sale for all of 2010, data from the company indicated. Ahead of Caribbean Airlines was Air Lease Corporation from the United States which ordered ten ATR 72-600s with an option for ten more. The company leases and resells aircraft. ATR’s biggest customer was Brazil-based AZUL Linhas Aereas which ordered 20 ATR planes with 20 options. Caribbean Airlines was ahead of India’s Jet Airways, Malaysia’s Firefly, Sweden’s Golden Air, Syrian Air, Lao Airlines of Laos and Air Mauritius. These companies ordered between two and six ATR 72-500 aircraft while Caribbean Airlines ordered nine ATR 72-600 planes, data release by the company from Paris showed. An “undisclosed” company ordered 20 ATR 72-500 aircraft, company data showed. Air Guyane of France ordered one ATR 42-500 aircraft. Caribbean Airlines’ ATR plane purchase became part of a disagreement between Transport Minister Jack Warner—the line minister for the State airline—and its chairman George Nicholas and his board of directors. Former Caribbean Airlines chief executive Capt Ian Brunton was fired last year, months after the ATR deal was approved by Cabinet and a downpayment was made to the company to start making the aircraft. Warner and Brunton agreed that ATR offered the best deal while Nicholas and his new board wanted to examine other options. Prime Minister Kamla Persad-Bissessar said in December the board raised “safety issues” about the ATR planes. International aviation expert John Dunne was hired by the government to conduct a review and submit a report to determine whether the deal should go ahead. Later that month Attorney General Anand Ramlogan announced the deal would be completed and that Dunne had found ATR’s safety record to be good. ATR had previously defended its products, saying its aircraft were safe. The company has a portfolio of 165 aircraft operators in 92 countries and has a total workforce of 855 employees.
Image via exitotravel.com“Thanks to these new destinations and the increase in frequencies from our Hub of the Americas in Panama City, Copa Airlines continues to expand its coverage and reaffirm its leadership in Latin America and the Caribbean,” said Pedro Heilbron, CEO. “Copa offers flights to more international destinations than any other airline from any other hub in the region.”
“The Hub of the Americas continues to be the most efficient and convenient connection point on the continent,” Heilbron added. “The increase in flight frequencies will allow us to significantly improve our daily arrival and departure schedules to offer better connectivity, more flight options and more frequent connections throughout the day. In fact, some destination will now have up to six daily frequencies.”
In 2010, Copa Airlines transported more than 5.2 million passengers via the region’s most complete route network through the Hub of the Americas. The airline’s on-time performance of greater than 90 percent (measured by industry standards established by the US Department of Transportation), puts the airline in a leadership position in Latin America and among the best in the world. The arrival of 10 new Boeing 737-800 aircraft this year will signal even greater growth.
Copa Airlines’ transition as of June 15 from a four-bank to a six-bank operational system (groups of connecting schedules) will allow the airline to better utilize Tocumen Airport’s existing infrastructure, as well as offer passengers more and better scheduling options.
As of June 15, the Hub of the Americas at Tocumen Airport will add to its existing flight banks, currently two in the morning and two in the afternoon, a group of early-morning departures – ideal for travelers who want to arrive at their destination early in the day – and a group of afternoon departures.
These operational changes also translate to significant improvements in Copa Airlines’ flight schedules to major destinations on the American continent, such as New York’s JFK Airport and Dulles International Airport in Washington, DC, as well as to South America’s principal cities.
Opportunities for connection will increase throughout Copa’s extensive route network as well, resulting in shorter connecting times, giving the Panamanian airline a firm foothold as the best choice for connectivity and convenient travel schedules.
In addition to the four-times-a-week flights to its three new destinations, Toronto, Porto Alegre and Nassau, Copa will increase frequencies on the following flights from Panama to Lima, Peru; Orlando, Florida; Miami, Florida; Bogota, Colombia; and Santiago, Chile.
In operation for more than six decades, the Panamanian airline will offer a total of 180 daily flights from the Hub of the Americas at Tocumen International Airport to 55 destinations in 27 countries in North, Central, and South America, and the Caribbean. The airline will continue to strengthen Panama City as a business center and tourist destination and to improve Panama’s connectivity with the rest of the world.
