...Gonsalves speaks on solution
WASHINGTON, DC - THE challenges facing the region regarding travel are still evident, and it may remain that way for sometime as regional governments and institutions work to find the best solution to a vexing issue for citizens and residents who are paying more for intra-regional travel.
Since the collapse of regional airline LIAT, it has been a nightmare, especially for those who live in the Southern Caribbean, as the airline has restarted operation on a scaledown basis and is not servicing several territories in that geographical space.
In order for those down South to reach the northern islands, it would be cheaper for them to travel to the United States and then return to the islands.
In some instances, persons were being routed through the United Kingdom then to the islands.
Quite recently, Grenada indicated that it would seek to lease planes to assist in offsetting the burden faced by regional travellers - a short term fix to a major problem.
But St. Vincent and the Grenadines’ Minister of Finance, Camillo Gonsalves, believes that the proposal is not a fix to the current situation.
Speaking with SKNVibes on the sidelines of the 2022 Annual General Meeting in Washington, DC, Gonsalves reminded that LIAT had a pre-existing condition and the governments of the region did not see beyond the challenge of the day - meaning the impact resulting from the mitigation measures such as the border closures from COVID-19.
Those measures had resulted in no flights entering or exiting islands.
In the case of St. Kitts and Nevis, the Government had closed the borders to commercial travel for roughly eight months in 2020, and that had a significant impact on the local economy and tourism dependent job market.
Now, Gonsalves is also adamant that the previous structure of the company, where the cost of supporting it was borne exclusively by a handful of countries - Antigua and Barbuda, Barbados, Dominica and St. V\Vincent and the Grenadines - is no longer sustainable.
“Other countries could not be freeriders in the process,” Gonsalves said, noting that “Every country has to chip in if we are going to have an effective regional travel solution.”
He added, “So what we have done at the level of the Caribbean Development Bank (CDB) is get a general agreement from all the governments of the region that whatever replaces LIAT, whatever comes thereafter, is going to have to have buy-in and support from all the countries that the airline serves.”
A similar plan was laid out by the Government of Antigua and Barbuda, where all territories willing to own the service airline would have to pay for shares on entity.
That means all territories will have a stake in the company and would not want to see it falter.
Currently, some of the territories not fighting for the resuscitation of the airline are said to be subsidizing major international airlines when they fall short of the passenger target per flight.
The SVG Minister reminded that in the past many of the countries serviced by LIAT did not provide assistance to the airline during the difficult period.
“The CDB is currently finalizing a study that will tell us a number of things: in this post COVID environment, what is the optimal aircraft we should use; what is the optimal number of aircraft we should use; what is the optimal location of a hub for the aircraft; what are the likely profitable routes and what are the routes that are unprofitable, but nonetheless necessary; to what extent can the profitable routes subsidize the unprofitable routes; and what is the formula by which all governments will have to chip in for the upkeep of this regional airline.” disclosed Gonsalves.
Until those things are properly addressed, there is a long road ahead to deal with the vexing problem that continues to plague the region, since the CDB has not yet finalized its report on the matter to be laid out to regional governments.
When that is finalized Heads of Government across the regional will then deliberate on the way forward for the topic of intraregional travel. At this time, there is no indication when that report will be completed.
“My hope is that we will be able to identify funding and a structure sometime in the middle of next year to have a replacement. Don't forget that a lot of people out there said ‘get rid of LIAT’, the private sector will come in and the private sector will solve the problem…well we have seen what happened. That was always a fallacy and I think that a lot of people now realise that it was a fallacy,” added Gonsalves.
Citizens and residents would welcome actual fixes to the problem of intraregional considering that the region is highly tourism base, and that regional travel accounts for a large percentage of the tourism numbers.
