PM Golding tilts the playing field against REDjet and Barbados
In the next 24 hours, some 6,000 people will read this article by Adrian Loveridge. We can only hope that Jamaica’s Prime Minister will be among them.
Has REDjet been treated fairly?
It’s a big question and without all the facts in hand it would be difficult to be totally objective.
However, if you ask the questions, is the concept of a low cost carrier desirable in the Caribbean and can it be made to work, then the answers have to be yes, and probably if they are allowed to operate in a truly commercial environment.
When you can book a week-long cruise that visits seven Caribbean islands with travel, accommodation and food all included for less than the cost of a return airline ticket to one of those territories, then something has to be fundamentally wrong.
LIAT now enjoys a virtual monopoly on certain routes out of Barbados, which includes Puerto Rico after the withdrawal of American Eagle.
According to their website, the cheapest return flights (a round trip of 1,140 miles) bookable in late June to San Juan is US$664.09, which includes a whopping US$176.09 in taxes and add-ons.
For exactly the same dates, return flights to New York with American Airlines cost US$615.50 (including US$177.50 in taxes) and US$664.80 (US$166.80 taxes) with JetBlue, a journey involving 4,182 miles or nearly four times farther both in miles and flying distance than Puerto Rico.
“If LIAT had competition on the San Juan route of course fares would be lower and that is why we need an airline like REDjet.”
REDjet has been criticised by some for having not having a viable business plan but does LIAT or the amalgamated Caribbean Airlines and Air Jamaica?
Without past massive taxpayer subsidies all three of these carriers would have perished by the wayside years ago and the much delayed partial assimilation of the ‘Lovebird’ by CAL has also been finally made possible only after the government of Jamaica wrote-off off huge debts.
And we have to remember that in its entire 42-year history, Air Jamaica recorded a profit in only one of them, 1986.
So when we talk about fairness, what do we really mean?
To the best of my knowledge the owners of REDJet have not asked any government for taxpayer bailouts, heavily subsidised fuel, preferential interest rates or any other major concessions. They just want to operate in a commercially level playing field where competition, supply and demand and all the other factors that in the ‘real world’ decide economic survival or failure.
The people of Jamaica now own a 16 percent stake of Caribbean Airlines and it has been designated that island’s national carrier to the world.
Clearly, Prime Minister Golding is keen to protect that interest and recently stated he was “not saying the REDjet application would not be approved, but it would have to be allowed with the CAL deal in mind”.
Perhaps he has every right to be so protective, but does it really foster better Caribbean unity or take us a step closer to marketing the region as one?
The writing is on the wall, the president of the Barbados Hotel and Tourism has already graphically warned that summer tourism business is down.
REDjet has clearly demonstrated that it can drive additional traffic to Guyana and there is no reason to believe it wouldn’t be the same for Trinidad and Kingston. This just may reduce the real risk of additional hotel closures and job losses this year.