Tourism and regional air transportation

Tue, Oct 19, 2010

The Caribbean is at it again, where regional air transportation is concerned. Hopes have once more been raised that cheap flights are to at last become a reality, possibly as soon as December. The dream surfaced at the recent meeting of the Caribbean Tourism Organisation (CTO) held in Barbados. There, it was announced that a Barbados-based air carrier, AIRONE, plans to initiate an era of what is called “no frills” flights with fares as low as US$10.00.{{more}} According to reports, AIRONE is set to unveil a low-cost model on December 1.

The revelation came as leaders in the Caribbean tourism industry examined prospects for the further growth and development of this vital industry which is critical to the economic well-being of the region. Given the Caribbean’s failure to implement a comprehensive strategy for sustaining and promoting agriculture, tourism has become by far, the region’s biggest foreign exchange earner and several countries are now almost totally dependent on it. But there are many factors threatening this industry, externally-caused as well as emanating from regional causes.

Among these is that of regional transport. With the region physically divided by water, transportation is a key factor in any regional equation. However neither the public nor private sector has been able to come up with a viable plan for transport by sea, even though the geography of the region would suggest that this is of paramount importance. In the absence of meaningful sea transport, air access has assumed an even higher priority and the tourism industry is absolutely dependent on it.

Hotel occupancy relies heavily on bookings from abroad and they are in turn, reliant on airlift, principally from some of the giants of the global airline industry as well as charter operators. In fact, such is the reliance on the external feed that there are several examples of national governments actually subsidizing non-regional airlines in order to receive a “feed” of tourists from North America and Europe. In addition, airport development and security factors now play a critical role in tourism strategy, forcing major regional players to constantly spend huge sums on airport infrastructural development, while smaller countries like Dominica and St. Vincent and the Grenadines grapple with the challenge of providing international access by air.

But tourism in the region is not just based on external visitors. Intra-Caribbean travel has long been of great importance, though hardly ever getting the recognition and support it deserves and needs. It is of significant economic value and its role in fuelling regional integration is an essential one. But it is plagued by a serious bugbear, one of high cost. Travelling from one Caribbean country to another neighbouring country can incur costs which almost defy logic. Countries like ours, without an international airport, and hence dependent on connecting flights, often lose out because the cost of the connecting flight is completely out of proportion with that of the international flight when distances are taken into consideration.

This cost factor has resulted in a fall-off in intra-regional travel, a matter which greatly worries persons in the regional tourism industry. The CTO estimates that regional air travel fell by well over 20% in the past year. It is out of this concern that the search for a solution continues. Many have been the failed attempts, the latest being by the disgraced Texas billionaire Allen Stanford. Now AIRONE is set to make another venture, using a model now common in Europe and North America.

Its announcement has fallen on very receptive ears in the region since the price of air tickets for regional travel is a major complaint. Recognising this, Barbados’ Acting Prime Minister Freundel Stuart told the CTO gathering that, “..the acquisition of a reliable and competitively-priced airlift with adequate geographical spread, becomes a key issue upon which policy-makers are forced to cogitate.” It means that hopeful eyes will be turned in the direction of any new initiative which promises financial relief for regional travelers.

However the solution may not be as simple as it seems. One big hurdle which must be overcome is that of high taxation. Governments worldwide have a tendency to impose onerous taxation on the air transport sector. In fact, Caribbean countries are themselves currently fighting a battle with the British government over a so-called “Green Tax”. The contradiction is that a big component of the high cost of air travel in the region is taxes by regional governments themselves. This must be addressed if Caribbean travellers are to have affordable fares, permitting the further growth and development of air travel in the region, sustaining regional economies and promoting Caribbean integration.