The Case of a Single Caribbean Airline
Barbados, jul 24. – The intense polemic about the air transport in the Caribbean wins space with the points of view of the current chairman of the regional airline, Jean Holder.
In his new book Dont�t Burn Bridges. The Case of a Single regional Airline, commented Friday by the Caribbean media, Holder declares emphatically: "To those who say Caribbean governments cannot afford to do this, I reply that they cannot afford not to."
Holder considers that the countries of the Caribbean archipelago "depend on air transportation services to connect them with the world and each other, and for this, they cannot rely solely on foreign carriers, which would take decisions about services, routes, schedules and financial performances according to the best interests of their owners and shareholders".
He argues that "such decisions will not, and cannot, always coincide with the best interests of the Caribbean states".
One of the compelling reasons that Holder advances for an airline that is a Caribbean Community (CARICOM) carrier, is the ambition to create a Single Market and Economy among the 15-member states of the grouping.
"In a vibrant, working, single market and economy where there is a greater harmonization of regional and international policies than currently exist, the political directorate of the CARICOM member states must know for certain that it is not a hostage to external forces, for either political or economic reasons".
"It should not be possible" he says, "for it (the Caribbean Single Market) to be cut off from the rest of the world and the member states from each other, simply because it offends some other country or some other person outside the community".
He may be over emphasizing the case to make the point. It is hardly likely that the region would ever be entirely cut off from the rest of the world by all foreign carriers. Equally, it is unlikely that all air transportation within the region would be cut off by all carriers at the same time.
Some airline or airlines will always remain to pick up the slack and the business, even though it may be at a higher cost to the region.
But, it is the case not only that some foreign-owned airlines could desert some countries in the region if they considered that the destinations had become uneconomic, but also that the airlines that remain could demand higher prices for the services they provide.
In this regard, it is important that all CARICOM countries should have a carrier, owned within the region, on which they can rely and which they can use to calm prices, provided that the governments of all the countries understand that they cannot expect other regional governments to subsidize their routes.
This is the contention right now about LIAT – the airline that serves the Eastern and Southern Caribbean.
LIAT is owned and financed by only three of CARICOMâ�Ös governments – Antigua and Barbuda, Barbados and St Vincent & the Grenadines. The St Vincent Prime Minister, Ralph Gonsalves, makes the point repeatedly that many other CARICOM countries (not Bahamas, Belize Jamaica, Trinidad and Tobago, and Suriname) depend on LIAT to provide air transportation for people, the services industries and some goods, but they decline to contribute to the cost.
It is quite remarkable that some of the Caribbean countries that refuse to participate financially in LIAT have no hesitancy in providing subsidies to large foreign owned airlines to continue flying into their countries. British Airways, American Airlines and even German airlines have been the beneficiaries of such subsidies.
The Caribbean has also witnessed the financial failure of airlines that have been owned within individual states – either by governments or private sector companies. BWIA, owned by the government of Trinidad and Tobago, collapsed under a mountain of debt and had to be closed-down to rid itself of many of its unsustainable obligations. The Trinidad and Tobago government assumed much of the debts of BWIA and launched Caribbean Airlines which now flies much less routes.
Jamaica, too, saw Air Jamaica seamlessly accumulate huge debt in a transition from government to private sector and back to government ownership, until the International Monetary Fund (IMF) made it clear, as part of its conditions for a loan to the government to prop up the economy, that Air Jamaica had to be sold.
In an arrangement between the governments of Jamaica and Trinidad and Tobago, Caribbean Airlines now owns Air Jamaica. Even though the name "Air Jamaica" will remain, the airline is now effectively owned by Caribbean Airlines and will be merged with it.
It has long been argued that the airlines, owned by individual Caribbean states in pursuit of their â��symbols of nationhood and sovereigntyâ�Ö were luxuries they could not afford.
When Holder wrote the book "Don�t burn our bridges The Case of a Single Regional Airline" and when he was working on it he could not have envisaged that the Trinidad and Tobago owned, Caribbean Airlines, would have bought out Air Jamaica a few months later. He said: "The move from national ownership and control, to what I refer as community ownership and control, would require a sea change in the thinking of the region, not only among political leaders but also at the level of the people themselves".(Prensa Latina)
