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Posted: Tuesday 3 July, 2018 at 9:52 AM

High regional cost continues to affect air travel

By: Jermine Abel,
    BASSETERRE, St. Kitts, Jul. 02.2018 – THE high cost of intra-regional travel is proving to be a major deterrent for travel, that is the view shared by President of the Caribbean Development Bank (CDB), Dr. Wm. Warren Smith
    Smith, while addressing the Aviation Day Caribbean on June 29 in Bridgetown, Barbados, called for a new paradigm in the aviation industry, defined by connectivity which is convenient, flexible, and reasonably priced.
    He said that transforming the Caribbean airline industry will demand significant reforms and actions by regional governments but will also lead to a better overall customer experience and to aviation making an even bigger contribution to regional economic activity.
    “Intra-regional fares have risen steadily to the point where it is often cheaper to fly to the Eastern Seaboard of the United States than it is to fly to neighbouring Caribbean islands. […] Studies commissioned by CDB, confirm that air travel is price elastic, so that reductions in these imposts should lead to increased travel, which in turn, should lead to additional tax revenue flow to replace some of the revenues foregone,” Dr. Smith noted.
    The CDB boss said that people should expect secondary benefits to government revenue arising from the in-country spend associated with the larger number of visitors.
    Air travel across the region has been a major talking point for many years, at the sub regional level, where Organization of Eastern Caribbean States (OECS) heads recently discussed the matter at their Authority meeting in Castries, St. Lucia.
    Following that meeting, Antigua and Barbuda’s Prime Minister, Gaston Browne confirmed that the governments of two other OECS states will become shareholders with St. Kitts and Nevis yet to be determined.
    The topic of intra-regional air travel, SKNVibes understands, will be on the agenda for regional Heads of Government meeting slated to begin on Thursday in Montego Bay, Jamaica.
    According to a statement from the CBD, amongst Dr. Smith’s recommendation for revamping the aviation industry, includes harmonizing regulation across the Caribbean, adopting and implementing a comprehensive open skies agreement, and strengthening the internal operation of Caribbean airlines.
    CDB partnered with the International Air Transport Association (IATA) and the Latin American and Caribbean Air Transport Association (ALTA) to host Aviation Day Caribbean, which was held at the Hilton Barbados Resort.
    Regional Vice President, The Americas for IATA, Peter Cerdá, told the conference that the profit per passenger in the Latin America and Caribbean region is less than half the global average.
    He explained that this was due in large part to the lack of growth in Caribbean connectivity, owing to “a combination of high taxes, fees and charges in air transportation, as they add to the cost of travel and make the Caribbean an expensive region to operate in; regulatory barriers, including the lack of liberalization in air services and an inefficient and aging infrastructure.”



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