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Let’s begin with aviation

Thursday, July 5, 2018

Our failure to carefully consider the big picture, to sensibly weigh all options in setting developmental goals, is possibly the biggest reason why so much energy and effort is wasted on matters that are of short duration, unsustainable or doomed never to see the light of day.|

We are continually “spinning top in mud”, consistently failing to get a viable tourism industry off the ground because of repeated failure to address the things that matter, preferring to go the route of political expediency rather than long-term sustainability.

As anyone who has travelled through the region knows very well, in terms of natural attractions, history, culture and entertainment, the destinations in this region that have successful tourism industries don’t have a marked advantage over T&T. Where they outdo us is in terms of the hospitality infrastructure, quality of service, promotions and marketing.

So while we talk about tourism development, we are no where close to developing that sector into an important contributor to GDP because we still don’t get it. We are in a situation where we are lagging so far behind the regional competition that we are not in a position to reap the benefits of the industry in any significant way.

Strangely enough, however, we are face the same threats that they do and will suffer the fall out from that critical aspect of tourism that should be high on the agenda for every single nation in the Caribbean basin—connectivity through air travel.

Indeed, efficient air transportation is critical in the wider region given the heavy dependence of most economies, with the exception of T&T, on tourism. For most Caribbean nations, the highest proportion of GDP and a significant number of jobs are derived from travel and tourism.

Efficient airlift is not only vital to bring business and leisure travellers but is also needed to transport the goods and services for the various accommodation, hospitality and entertainment operations that underpin the entire tourism infrastructure.

For those reasons, I hope industry stakeholders here paid some attention to the deliberations at Aviation Day, hosted in Barbados last week.

The concerns raised at that forum, which was attended by aviation experts, airline executives, airport officials and government representatives from across the region, should have the full attention of local stakeholders who have been speaking so optimistically about making tourism a key revenue generating sector in the T&T economy.

The key message coming out of that forum underscores the views of one analyst who some years ago described the region’s aviation industry as “a disaster, staggering from one financial and operating crisis to another, too often micromanaged by governments, costing taxpayers millions of dollars in subsidies while becoming expensive to use to the point at which the cost of interregional travel is now resulting in rapidly declining passenger traffic.”

Indeed, it looks like the situation has actually become worse, given the concerns raised by CDB president Dr Warren Smith, Caribbean Hotel and Tourism Association (CHTA) director general and chief executive officer Frank Comito and others about high aviation taxes and fees and other regulatory barriers and make it so expensive and so difficult to travel across the Caribbean.

Dr Smith described aviation taxes as a deterrent to travel which makes the fares offered by regional airlines uncompetitive. Mr Comito warned that the situation was serious enough to turn away visitors from travelling to or through the region and stated quite bluntly:

“We recognise the challenges facing countries, but it is our duty to point out that taxing for additional revenue may have a reverse effect as tourists may choose not to travel to or within the Caribbean and instead select other destinations because of the high cost of our destinations.”

Vital to our connectivity are the various regional airlines, both private and state owned, that operate intra-regionally, as well as to international destinations. However, almost without exception, these carriers operate at a loss.

Our very own Caribbean Airlines (CAL) has been mired in debt for most of its existence even though, as the largest of the Caricom-based carriers, it has the lion’s share of the non-stop traffic.

LIAT, also a loss-making entity, is redeemed only by the fact that it provides the only regular scheduled flights to some islands which do not have airport infrastructure for larger aircraft.

However, since 11 separate Caribbean governments have some stake in LIAT, conflicting objectives make it almost impossible to operate that airline in a way that is financially viable.

The concerns raised at Aviation Day highlight the extent to which decades of political interference and protectionism have damaged aviation and made it impossible to have even one genuinely profitable airline that is not heavily reliant on subsidies to survive.

The sector is in a mess—and that is putting it very mildly. Plasters have been applied to festering sores, so that instead of looking at the big picture to get things right once and go all, a series of stop gap, doomed to fail measure have been implemented.

Governments continue to subsidise foreign carriers to fly in, subsidise regional airlines, and subsidise fuel, then they turn around and try to recover monies lost through these subsidies by imposing high taxes on travel and travellers.

The situation is so severe that in some Caribbean markets, taxes and charges constitute more than 30 per cent of the cost of an airline ticket.

As if that wasn’t bad enough, unfortunately, excessive taxes are only part of a bigger, more deeply rooted problem. The high cost of operating some of the region’s airports due to high fees and charges, plus restrictive air service agreements which reduce the number of routes airlines operate further complicate the situation.

Solving the region’s connectivity problems is no easy fix but it is necessary to resuscitate the vital tourism industry. Ways must be found to free regional carriers from recurring losses, high debts, bankruptcies and bailouts

This region, made up of islands covering a vast geographic space that extends from the tip of Florida in the United States to just off the coast of Venezuela in South America, needs a strong competitive aviation industry to support the tourism that is so essential for our collective economic survival.

As it now stands, the Caribbean’s share of the global tourism market has been eroding and visitor arrivals growth is not where it should be.

The air transport problem needs to improve quickly—there isn’t the luxury of time in which to do it.

Unless there is a marked upgrade in the near future that will attract an increasing the flow of visitors to T&T and other parts of the Caribbean, there will be major economic consequences.

Since there is no time to waste, there should be a quick follow up to the Aviation Day deliberations, perhaps at the Caricom Heads of Government Summit which starts tomorrow, to set a recovery plan in train.

Studies have been done, experts have made recommendations over the year which were either ignored or not properly followed. Time for a fresh start, a different approach, with a commitment to do things properly. Otherwise, what has already been lost may never be recovered.

Tourism is a major economic pillar of the region.

In the case of T&T, it is a potential high revenue earner that must be given greater priority . However, all the natural beauty, vibrant culture and hospitality will be for nought is there isn’t a cost effective and efficient way to bring visitors to our corner of the world.

Let try to get it right.


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