-CDB to do cost analysis of regional airline industry

By Ravin Singh in Grenada
THE Caribbean Community (CARICOM) under the Chairmanship of Grenada’s Prime Minister, Dr. Keith Mitchell, will be making an ambitious attempt to have the regional airline tax reduced.
In his inaugural speech at the opening of the 38th Meeting of CARICOM Heads on Tuesday in Grenada, Dr. Mitchell lamented that, comparatively, intra-regional air travel is more expensive than destinations outside of the region.

“Weak domestic and intra-regional air travel, added to low service competition and high travel costs—all culminate in the reality that Caribbean countries connect more easily to destinations outside of the region than to destinations within Member States” he reminded other Heads of Government.
Noting that transportation remains the life-blood of the regional integration process, the Chairman said that it would represent a significant installment to the regional integration account if leaders collectively agree to reduce airline ticket taxes, as well as, other fees attached to the cost of intra-regional air travel.

And, at a Thursday evening press conference which followed the conclusion of the meeting, the CARICOM Chairman informed journalists that the Heads of Government had agreed that air transportation in the region has to improve.
Building on this realisation, Dr. Mitchell disclosed that heads agreed to implement measures to facilitate the ease of travel in the region, and mandated the government-owned airlines to continue working towards increasing the level of collaboration and coordination in the region.

He noted too that there was agreement on the need for the establishment of a single airspace. To pursue this, Dr. Mitchell said that the CARICOM Secretariat was mandated to work with relevant agencies to define a roadmap and identify the necessary process for its implementation.
Further, he revealed that it was agreed that issues of aviation taxes regime within the context of appropriate mechanism for the financing of civil aviation, would be examined. As such, the Chairman related that the regional bloc requested the Caribbean Development Bank (CDB) to finance a story on the impact of aviation taxes on economy of member states.

Should this cost assessment recommend a reduction or elimination of taxes on air transport in the region, it means that CARICOM nationals will benefit significantly.
Meanwhile, a bitter aviation dispute has erupted within the regional movement. Unable to restrain himself, the newly-appointed Chairman in his opening remarks took aim at the management of LIAT airlines.
“I have long held the belief that political presence on the board of airlines, such as LIAT, is not helpful to its proper management and efficiency” Dr. Mitchell said.

The Chairman opined that LIAT’s sustainability would have benefitted it more, if it was run more as a private sector company. He offered that governments could then subsidise flights to given destinations or routes that are in the best interest of their respective countries.
“Colleagues, how could LIAT thrive when, for example, a few months ago, literally overnight, LIAT cancelled one of its most lucrative routes to and from Grenada, without any consultation with the citizens or leadership of Grenada?” the Grenadian leader questioned rhetorically.

He suggested that the move was “…all based on politics,” and that “we have to do better as a region”.
LIAT is owned by several governments in the region, including that of St Vincent and the Grenadines. And, those remarks were rejected by that country’s Prime Minister, Ralph Gonsalves.
“PM Mitchell’s speech was unfortunate in two respects. We disagree on LIAT. But to say the decisions which are made at the board level, is political, he just doesn’t get it; in relation to how the LIAT board is comprised” he said, adding that the Chairman of LIAT’s board is a distinguished former diplomat of Barbados. That Chairman is Dr. Jean Holder.
PM Gonsalves argued too that the mandate that the airline has, within the context of the 10 aircrafts they are operating, dictates that they are deployed the best way they can, professionally.