Packaged flights and hotel accommodations might yield increased business!
It’s always very difficult to write about LIAT with absolute authority, because despite the Barbadian taxpayer being the single largest shareholder in the airline, the public for years has been denied sight of any business plan or annual audited accounts.
During the recent spat with a clearly dissatisfied customer and the involvement of Sir Richard Branson and the worldwide attention this generated, LIAT fought back by posting two videos on their website which have been subsequently removed. Perhaps on reflection, it was thought that it was more productive to address the issues, ie: the complaints, rather than battle with someone that has indefatigably demonstrated they are a master of media exploitation.
What really surprised me in one of the videos were the numbers quoted by the Director – Commercial and Customer Experience – who stated that the airline operated ‘approximately 100 flights each day’ and carried around ‘3,000 passengers daily’.
According to Planespotters, LIAT currently has a fleet of 14 active passenger aircraft with various seating capacities from 37 to 68, but collectively totalling 685. So what immediately stands out is, if the overall numbers are correct, then the average sector flight carries only 30 passengers.
That equates to what could be up to 19 empty seats on each flight overall, across the fleet.
Therefore, it is logical to conclude that unless LIAT entices considerably more passengers in the immediate future, and/or changes to potentially higher capacity point-to-point routes, that number of empty seats will rise. This will happen at least until all of the ATR72-600, 68 seater and the smaller ATR42-600’s with 48 seats are fully integrated into service and the Dash 8’s are retired.
LIAT’s chairman recently commented that there must be more tour operator involvement to ‘package’ flights and accommodation. Even though this has happened in the past with trans-Caribbean travel organisations like Going Places, I fully support his call.
But LIAT must sit down with with the operators to identify routes, times and days of the week, where there is excess capacity and some room for ticket price reduction – even if this is revenue restricted to ten seats per flight. I still believe this is an enormous untapped market, not just from the indigenous regional population, but also as an add-on for our overseas visitors. This, despite increasingly deterrent taxes applied by Caribbean Governments.
By putting the component parts, flights, accommodation etc. into a one price package, it helps break down the perception that the product is overly expensive. US$150 a day including flights and hotel, sounds better than $1,000 for a week.
With Barbados taking the biggest risk in LIAT, our Government could take a critical lead in stimulating additional business for the airline by removing VAT on the airfare element, at least in the softer summer months. Some of the ‘lost’ taxes could be re-couped by levying VAT on cruises originating in Barbados, which currently avoid any significant taxation. The residue will be generated by the additional VAT collected on increased accommodation occupancy, car hire, restaurant dining, shopping etc.
For statistical purposes ‘we’ measure Caribbean arrivals as ‘Trinidad and Tobago’ and ‘other Caricom’ and it is the third largest market in terms of all our main sources. Regional visitor arrivals fell by 4,487 in 2012, when compared with 2011.
“So far this year (January-May) has witnessed the single biggest percentage decline with 6,359 less visitors, or a staggering 240 percent fall!”
Relate that to average stay and spend and you start to get a grasp of the fact, that we are not addressing the problem.