REDjet on the edge of financial collapse?

UPDATED: REDjet denies rumours. Says route closures are about expansion

Ian Bourne has the story at The Bajan Reporter.

Too bad: but that’s what happens when the competition is government funded – and governments stand in your way to protect their own businesses.

The Nation is reporting that REDjet is cutting back 56 flights because the low-cost start-up is running out of money.

Local investor Ralph “Bizzy” Williams told The Nation that he and his Irish partners are unwilling to invest any further as they were “fed up with the way their investment had been treated by the Barbados government.

Not the best advertisement in the world for Invest Barbados, fuh sur, but actually a common scenario. Many folks come into the Caribbean looking to start a business or even a hotel – only to later discover that the competition is funded by the deep pockets of government one way or another. That’s tough competition!

Remember the GEMS hotels were all heavily subsidized by government as is the current Barbados Hilton. I wonder how many of the recently closed hotels in Barbados might have survived without competition from government-owned businesses?

Perhaps REDjet could have made it on a level playing field, but there’s no such thing in the Caribbean.

19 Comments

Filed under Aviation, Barbados, Barbados Tourism

19 responses to “REDjet on the edge of financial collapse?

  1. Ru4real

    What a shame it was agreat idea.

  2. Green Monkey

    Don’t tell me a smart businessman like Bizzy didn’t know that the easiest way to become a millionaire is to start off as a billionaire and buy an airline (and that goes double in the Caribbean for the reasons listed above)..

  3. peltdownman

    A low fare business model in the small-market environment of the Caribbean was bound to fail. Just as with Carib Express, where a number of very successful businessmen invested without thinking, RedJet owners have found that running an airline in any circumstances is a risky business. Not least among their problems was the idea that they would get traffic rights within the Caribbean as a matter of course, without even looking back at the problems encountered by Carib Express. They tried to cajole and then bully governments into granting rights. They thought that the anti-LIAT sentiment in the Caribbean was so strong that governments would yield and damage their investments – wrong! RedJet was first and foremost a predator that would have weakened LIAT even further – a parasite if you will. Would we see RedJet operating from Dominica to Antigua, or from St Kitts to St Maarten? Of course not. All they wanted were the high traffic routes.

  4. Angela Ifill

    I wonder if these planes were really drug mules?

  5. Adrian Loveridge

    We have a golden opportunity here to transform intra Caribbean travel as we know it. Let Government play their part and take off the ridiculously high departure taxes (at least for the summer) and match the BHTA’s StayCation programme with the cheaper priced seats.
    Some people have mentioned Carib Express and when I conceived and launched the Carib Escape programme, within three months it was producing over 22 per cent of the airlines total revenue.
    Sadly the BTA has lost interest in the re-DISCOVER the Caribbean Show and without some sponsorship funding it will not take place this year but it would have been a wonderful platform to get a hotel/flight programme going within the region.
    I am afraid I do not share the BHTA’s President optimism about this year regarding jobs losses and without some defined marketing strategy its (in my humbe opinion) going to be a difficult eight month summer.
    It was refreshing to see the new Minister of Tourism for St. Lucia requesting that they should get ‘all hands on deck’ and until this is done on Barbados we continue to miss so many opportunities.

  6. Captain BadBob

    OK-Here’s what we need to do:
    1. A jump seat in the cockpit of every plane so “government officials” can ride free and play with the controls as they fly to some island paradise.
    2. Ten [10] free tickets per month valid for open transport to any Carib destination
    3. The “Free Ride” will be in First Class-I know, we’ll arrange the seating as soon as this is approved. The “Sky King” option that I’m proposing will allow Priority Boarding, unlimited baggage, NO Customs bother & you bump any actual “paid” customer.
    4. FREE DRINKS and a US$50 voucher [or cash!] to be used at your discretion.
    5. The unlisted telephone number of any aircrew [male or female] you find yourself attracted to; or we’ll hook you up with the Ukrainian hooker [sorry, “air hostess”] of your choice from the Staff Menu.
    6. Free lodging at the Airling Lodge while you visit

  7. dumb and dumber

    right.. and Redjet didn’t know it would be competing with tax payer funded airlines. stupse.. and bizzy and co . are never the beneficaries of tax payer funded projects to the exclusion of others.. stupse

  8. De BagLady

    As a firm supporter of the regional integration movement, what I liked most about Redjet, the low cost carrier was its promise of facilitating greater intra-regional movement and with it increased opportunities for business and cultural exchange. The merger between Caribbean Airlines and Air Jamaica two years ago effectively established a monopoly on Caribbean air space which left the consumer at the vagaries of the government supported operations. The logic of free enterprise should be regulated in some things but not in all things. It should be of course, and especially for small developing states. But, which things do we exempt from market logic?

    However, I am trying to reconcile more than that. The cost structure of the govt-endorsed regional airline has been a prohibitive factor in the development of the wider/deeper regional integration project which regional governments also endorse. Outcomes of the monster merger – the consumer was seriously disadvantaged(literally kicked off the plane) and yes, a whole Movement was further setback in the process. The latter is extremely consequential. But who really cares? If the ‘major stakeholders’ could so easily, without reservation set in motion something that contradicts its own mission, its goal, its cause then who should care?

    Please send a ferry soon!

  9. NOTsurprised

    This (near?)collapse not surprising at all!
    Plus they made a start …in THIS economic environment?? lol

    Had they made a start at some other time, with $$$ sloshing around
    they might have made it, but trying to operate an airline in these islands
    is fraught with the problems they thought they could overlook or overcome.

    I was wondering how long this would take…….
    Glad I didn’t put any money in it!

  10. what will they think of next

    Accra Beach Hotel and Spa is doing quite well. Occupancy in the eighties most nights.
    Also one million dollars being spent on room furnishings and room decor. Keeping the product fresh and exciting.

  11. Mark Twain dismissed reports of his demise and so is REDjet, albeit not as sarcastically as the author of Tom Sawyer as well as The Prince & The Pauper; “REDjet– the Caribbean’s Low Fares Airline today announces its planned expansion and improvement of its services for 2012. As part of the airline’s continuing development and investment in its services REDjet has made the commercial decision to make schedule changes over the coming weeks to some flights. Passengers can expect to benefit from new and more convenient flight times and from the launch of three new routes to two new destinations in time for Easter 2012.” Thus my URL beforehand, READING is a marvellous option once exercised – just click on the link folks and see what poop you’re spewing!

  12. peltdownman

    @what will they think of next

    And about bloody time!

  13. what will they think of next

    nothing happens before its time, peltdownman

  14. People of little faith. I hear no fat lady singing, so why are you discussion REDjet in the past tense. We need REDjet more now than ever. The workers at LIAT would have standed us for a longer period if they didn’t have competition.

  15. Sunshine Sunny Shine

    Hahaha. Who was expecting that redjet would not have ended up in the red wid dem catch prices. Bizzy ya dumb in this one. Doan blame it on the government because you know wuh dem dey gives. Ya should did moe homework before fly into this venture. And to think I ain’t even get a fly in the Red oh well will stick to Easyjet

  16. Joe Itellit

    Guvvahmunt duz bull evahbody who cross dem…wuh difrfunt now?

  17. 250

    MAN THIS IS F*** UP

  18. How is RyanAir still in the skies? Why are Northwest and Southwest in the USA still zipping about, inclusive of Celebrity Faux Pas (Gerard Depardieu and his Urination)? Or Celebrity Victimisation (Kevin Smith & Seating)? How do EU or USA Governments assist or how do these Low Fare Carries thrive?

    Ask CAL the ridiculous concessions all regional governments made about Fuel Surcharges for them, approvals that take no time for LIAT or CAL are dragged on as REDjet will NOT “grease squeaky wheels” – ask which inter-island service has staff who deliberately leave off luggage since the hold has so much room and do with impunity, they are aviation civil servants, believing they are immune to sacking!

    Why is Gabrielle Springer, a Permanent Secretary in Barbados, apparently affiliated to LIAT?

    LIAT Directors of (Barbados)

    Mr. Trevor Mayers
    Mrs. Gabrielle Springer-Taylor
    Mr. Grantley Smith

    If indeed accurate, is this not a blatant CONFLICT OF INTERESTS in the whole sordid mess? Should she not resign from the Civil Service for holding two similar posts simultaneously? In turn, George Hutson, if aware of such a mistake and took no disciplinary action, should be made to demit his Cabinet Portfolio, you cannot be buying planes for LIAT and in turn telling REDjet fend for yourself when Government already granted it Designated Carrier status!