All eyes on upcoming LIAT meeting

EVERYONE will wait to see what comes out of the meeting which the LIAT shareholder governments said they want to have with the Government of Trinidad and Tobago.

It is a meeting that could determine the way forward for the region’s airlines, which are facing challenges in relation to operational costs.

The subject of the discussions is a fuel subsidy which LIAT officials have repeatedly said  gives Caribbean Airlines (CAL) some unfair advantage.

News about the proposed meeting is one of the key decisions that emerged from the session the shareholder governments of LIAT, held in Barbados last week.

In a media interview following the meeting, St. Vincent and the Grenadines Prime Minister, Dr. Ralph Gonsalves, made it clear that LIAT is seeking either a subsidy similar to what CAL receives or that CAL be made to pay the going market price for fuel. What is more interesting is that if nothing comes out the meeting with Trinidadian Government officials, the matter could be taken to the Caribbean Court of Justice or to the Caribbean Competitive Commission for resolution.

These developments mark another chapter in the continuing state of affairs which characterise the aviation industry in the Caribbean.

There has been considerable debate on what ought to be the best way forward for the two regional carriers in view of the fact that there is not a lot of cash going around to sustain them.

One year ago, debate focused on REDJet, the low cost carrier and its possible integration into the market. Some time after, REDJet exited the scene. Both Caribbean Airlines (CAL) and LIAT continue to incur losses, with the latter accusing the former of benefiting from a fuel subsidy. There was the acquisition of Air Jamaica by Caribbean Airlines and, more recently, the authorities in Jamaica have been hopping mad because of cutbacks to flights in and out of Jamaica by CAL in an effort to trim costs and reduce losses on some routes.

In as much as Dr. Gonsalves recognised it could be a long drawn out process with Trinidad and Tobago, the approach as outlined by him indicates just how serious is the attempt by LIAT officials to get to the root of this matter. He produced figures to the media to support his contention that there must be a level playing field in the industry. The challenges facing airlines in the Caribbean have been around for a considerable length of time, even when recommendations have been put forward as solutions for dealing with the myriad issues facing the carriers.

The one that comes to mind is an amalgamation where all Caribbean governments would be involved. In this way there would be route rationalisation so that planes are not seen flying to the smaller Caribbean destinations with five or six passengers.

Airlines have to make a profit or break even if they are to survive. However, what is happening is that with airfares in the Caribbean being as high as they are, then carriers are operating at a loss since the fares are a deterrent and some routes are more lucrative than others.

In the meantime, many voices have been heard repeating that it is cheaper to travel from some destinations in the Caribbean to North America, than it is to move from one regional country to another. It is as bad as that. The situation calls for remedies and quick ones at that.