Airline Partnership opportunities gained, lost and possible

Adrian Loveridge – tourism expert, hotel owner

With any number of uncertainties there can be very few other businesses like airlines which present a constant indeterminate challenge.

It only seems a twinkle ago since massive controversy hit the media over the sale of the valuable Heathrow slots by the now defunct BWIA for what many felt was an under-valued GB Pounds 5 million to British Airways in 2006.

In 2011 the current Trinidad and Tobago Prime Minister, Kamela Persad-Bissessar commissioned a forensic management audit which concluded that a fair market value for the slots then ranged from GB Pounds 23 million to GB Pounds 44 million in a report dated 8^th May 2012.

Then with a blaze of glory in 2012 it was announced the replacement Caribbean Airlines was going to return to London, but this time flying into Gatwick.

Last week according to AirwaysNews.com, Caribbean Airlines (CA) will return its Boeing 767 fleet to lessor ILFC (International Lease Finance Corporation) during the first quarter of 2016, axing the Gatwick route and these aircraft will join the Air Canada Rouge fleet soon after.

This year, the airline has already returned two Boeing 737-800 aircraft with two more that are set to go soon. This will reduce the fleet to twelve B737s while retaining all five ATR 72 equipment.

Since the re-birth of the carrier, it has been difficult to follow what if any substantial part they play in supplying airlift to Barbados, specifically for inbound tourism and I probably am not alone into thinking ‘we’ as a destination do not have the best of working relationships with them.

Can this be changed or improved on specific routes, perhaps with a Barbados/Fort Lauderdale service or would this further alienate the existing legacy and low cost airlines? 

James Lynch – LIAT probably gone in less than two years

by James Lynch, former LIAT pilot extraordinaire! *

Recently when having discussions with my fellow Bajans, it has become clear that a few points need to be made.

First, LIAT has ALWAYS been based (Head Office) in Antigua, has NEVER been based (Head Office) in Barbados – no matter what the politicians may tell you. There has been a PILOT BASE in Barbados for decades – a pilot and flight attendant domicile, if you will – but not the registered “home”. Never has been. Never.

Second, airplanes are not tied to concrete foundations by rebar or galvanised water pipes. They are scheduled and flown wherever they are needed, and if you will insist on moving LIAT lock, stock and barrel to Barbados then you also need to clearly understand that you – yes, you, the taxpayer, you personally – will pay Froon, Fumble, Dumble, whatever we may call him now, several HUNDRED MILLION dollars more for the necessary new offices, hangars, facilities, etc., AND lose access to US Territories – Barbados is Category Two, and LIAT (Barbados) Limited will approach the US government as an African-class airline with ZERO safety rating.

You will also not get that many high-paying jobs – all of those are technical, licensed, experienced professionals and permanent employees such as pilots, engineers and mechanics who will just be relocated from Antigua to Barbados – all at YOUR expense. I suggest you start putting the brain in gear before you mash the pedal and burn more than rubber.

Third, having seen LIAT from the inside, I can tell you that Holder & Co are not the only thoroughly incompetent, irresponsible, unaccountable “employees” of LIAT… the airline is riddled with political appointees and incompetents of all stripes from all of the shareholder countries. Virtually NOBODY at LIAT is at risk of losing their job for screwing up, no matter what they do (within reason, of course). 

Are LIAT’s major shareholders deliberately destroying the airline in order to re-create it without debt?

by Passin Thru

Sometimes our assumptions about a situation or problem blind us to simple answers that are right in front of us.

Could it be that the apparent increasing incompetence by senior LIAT management and a rapidly deteriorating cash flow are actually part of a plan to push the airline over a financial cliff as soon as possible, so that it can be reformed without debt and with limited political fallout?

LIAT’s biggest asset is its routes. Nothing else really matters. The aircraft are leased, and LIAT’s facilities are also mostly rented. The airline owns little of any real value that couldn’t be bought at fire-sale prices after a bankruptcy.

So let’s here from those who know about airlines and LIAT in particular… Is it possible that LIAT’s shareholders are deliberately destroying the airline?

Jim Lynch: Open Letter To The Majority Shareholders Of LIAT

“LIAT’s total passenger load (= income, revenue) in the last year was half what it was the year before – yet the expenses remain the same or even greater, considering the constant arrival/delivery of new airplanes.”

by James Lynch, former LIAT Captain

Since before 2012 I have repeatedly heard of calls by the current majority shareholders of LIAT, through Prime Minister Dr. Ralph Gonsalves of St. Vincent, to take up more shares or to simply contribute towards the airline’s losses.

Gentlemen, I can reveal to the Press that you know my own name well by now, it has been before you literally hundreds of times both privately through letters, emails, faxes, text messages, and recently in public in the Press.

For almost a decade I have been trying to communicate with you mostly for just one reason, and that is to take the politics and non-competence in aviation out of eastern Caribbean aviation, whether that is at the Civil Aviation Department (or Civil Aviation Authority) level or at the airline level (meaning LIAT).

Example:

Barbados is ICAO Category Two for very simple reasons – incompetence, lack of proper regulations and lack of oversight. With a little more interest, Barbados could be Category One, but for the last decade nobody has been interested.

Last time the FAA visited to conduct an evaluation, when they left they told the Civil Aviation people it was so bad that they ought not to bother to call for the next evaluation for at least another ten years.

But for some five decades LIAT has been abused as much as your own taxpayers for no good reason. Board after Board, management after management continue to be politically appointed buffoons – whether they are your “friends” or not – who know little or nothing about aviation (which is NOT the same as tourism) and continue to lose money and market share to the point where the airline is now on the brink of the precipice.

And you need not respond that this is not the case, because if all were well you would not be out in public demanding that other governments join you in throwing money at the existing form of LIAT to keep it alive.

Since at least 2012 Dr. Kenny Anthony has told you, in public, that his country’s taxpayers would not be supporting LIAT’s excesses, and that if you wanted St. Lucia at the airline’s table you had to make major changes in its oversight (Board) and management.

Nothing has changed, yet now here you are again making the same demands. And in the process you are also trying to rope a brand new Prime Minister into the fold before he can catch his breath after the election. Shame! 

Loveridge: New JetBlue Barbados flight brings opportunity and hope

Adrian Loveridge – tourism expert, hotel owner

The double positive whammy for our tourism sector last week was the number of English cricket supporters who came for the Kensington staging of the test series and the announcement by JetBlue that it was introducing a once weekly, Saturday seasonal flight non-stop from Boston.

From the first flight commencing on 7^th November it could easily add another near 4,000 American arrival numbers until the service initially halts on 30^th April next year.

It also gives us another incredible gateway from a market that many know could witness significant increases over the next few years. While the 48 square miles that make up the actual city of Boston only boasts a population of around 646,000 inhabitants, within the area known as Greater Boston live some 4.5 million people, making it the country’s tenth largest metropolitan density.

At first, concern may be expressed about a single flight per week, but you should remember the Americans generally have shorter holidays and many of those are crammed between two weekends, so a Saturday departure is perfect. Often overlooked are also the physiological flight times, departing Boston at 7.45am with a scheduled arrival time of 1.30pm, allowing most visitors time to journey from the airport to accommodation, check-in, unpack and possibly sea bathe before dark. 

LIAT: There’s only two basic choices…

by Iain Edghill

As I see it, there are only 2 choices facing LIAT and its government shareholders. Either it has to be deemed an “essential service” and continue to be subsidized despite the operational inefficiencies inherent in its structure; or, it has to be fully privatized, de-politicized, and forced to be self-sustaining.

Both options are problematic. In these tough economic times, when governments are cash-strapped and are trying to figure out how to stretch their dwindling resources, many constituencies will argue that subsidizing a national airline should be very low on the priority list. Conversely, there are those who will argue, not without just cause, that LIAT is crucial to inter-island communications and commerce.

Has any study ever been done as to exactly how much LIAT contributes to the GDP of CARICOM? That is crucial to the discussion here. What would the economic impact be, in $$ terms, if LIAT were to disappear? Once that figure is empirically established, that could be used as the baseline for government subsidies, a quid-pro-quo, so to speak.

Perhaps the solution is a form of public-private sector partnership, with CARICOM governments providing a baseline subsidy, and the private-sector, with aviation professionals providing the operational expertise in running the airline, as Mr. Lynch correctly suggests, being the other half of the operational and financial equation.

One thing is for sure with regard to LIAT: the status-quo is both financially and operationally unfeasible.

Welcome to Barbados! Oh… you wanted to be in Rochester, New York?

“When she got off in Barbados, she thought that she was in Rochester,”

“And she was like, what happened to Rochester? This looks a lot different.”

And you thought your day was interesting?

Will the demise of LIAT Airlines bring down CARICOM too? Do you remember “one from ten is zero”?

Our old friend Jim Lynch has been following the news that Barbados wants to pull out of LIAT Airlines and establish a national carrier. You can follow the story at CRANe – The Caribbean Regional Aviation Network.

That got us thinking… you remember the old CARICOM cry “one from ten is zero”?

LIAT isn’t CARICOM, but it is perhaps the most visible expression of Barbados’ commitment to the organization.

If LIAT falls, does it harm CARICOM?

Proposal for Barbados to Quit LIAT

ST. JOHN’S, Antigua, March 28 2015 – Caribbean News Service (CNS) has obtained a document titled “Proposal for the Establishment of a Barbados Air Carrier.”

The document, allegedly authored at the senior management level of LIAT, points to Barbados, LIAT’s majority shareholder, planning to quit airline

The document proposes that a Barbados air carrier be established with its own Air Operators Certificate (AOC) and Route Licensing Authorisation. The new company would effectively replace the majority of existing LIAT services throughout the region and would seek to develop new markets.

An approach, methodology and structure for the establishment of the new Barbados air carrier were detailed in the document.

It said a traditional approach to fleet planning in a startup airline with a projected requirement of 10 aircraft would be to launch initially with two to three aircraft and a limited route network and build thereafter incrementally over a period of 18 months to the final fleet number. The Caribbean Development Bank (CDB) has funded, via shareholder governments, LIAT’s wholly owned ATR -42 aircraft.

The plan calls for the title of those aircraft to be passed on to the Barbados Government either through shareholder agreement or through CDB taking charge of the aircraft and reassigning them.

… finish reading CNS article Proposal for Barbados to Quit LIAT

How many tourists use Air Miles to travel to Barbados? We should know!

Adrian Loveridge – tourism expert, hotel owner

Way back in 2001 we registered a business name and established a website domain under the trading title of MILESCloser.

 The idea then, which still has not changed, was to target the hundreds of millions of frequent flyer members who largely use their accumulated miles on vacation or holiday travel.

One of the impediments to growing the United States market especially, has been the reality that because we are a little further away from key source market cities. Inevitably airfares are often more expensive, resulting in the overall cost of the ‘vacation’ making it more difficult when competing with other destinations.

This is especially true with non-gateway departure points. A good example is Minneapolis-St. Paul to Barbados where the current cheapest bookable fare online in October or early November is US$761 economy return. For the same dates the miles required are just 25,000 and US$60.60 in taxes.

So by getting rid of the perceived ‘high’ airfare, we then only have to compete on accommodation options.

Gone are the days when you only earned miles by flying. In fact it is now almost the entire opposite. Most miles are gained by non-airline purchases.

The first major airline loyalty programme, American AAdvantage now boasts over 1,000 partners who offer miles simply by selecting a method of payment.

Among these are financial institutions who offer huge mileage incentives to sign-up with particular brand name credit cards, which in many cases grant sufficient miles on application for the first flight, without any or a very limited level of purchasing.

By selectively using a miles earning credit card to pay every day bills, it is surprising just how quickly the numbers mount. Personally I have not bought an airline ticket for myself for some time, but have currently amassed nearly 600,000 miles. 

Prime Minister Ralph Gonsalves lied about Argyle International Airport

When you lie to the Business Investors you ‘Own the lies’ when it all goes wrong

by Peter Binose

When Ralph Gonsalves announced the finish and operational dates for the Argyle International Airport, we must ask ourselves if he knew each of those dates was unachievable. I like many others believe he did know that the completion dates he gave us were not just unachievable, he knew that such statements were downright lies.

When you tell lies sooner or later your very own lies will come back and bite you in the arse, as the old folk would say.

Saying the airport would definitely be up and running by 2011 may very well have caused all sorts of business people who were ardent followers of Gonsalves, to invest money in their business’s to take advantage of the upswing in trade that the same Gonsalves claimed would follow the airport opening.

He also told the people that he would build a city on the Arnos Vale site when the air traffic was transferred to Argyle. He said the new city would be linked to the old city of Kingstown by a four lane tunnel under the hill, it doesn’t matter that approaching the tunnel from either end it would only be one lane. The whole matter was embroidered to wind the business people into spending money.

Hotels in Villa who are ULP supporters have invested fortunes in upgrading their family owned hotels in anticipation of the Gonsalves forecast of a huge surge in stop over’s and business in general.

People like Ken Boyer borrowed money from banks to build his supermarket and Kentucky Fried Chicken outlet, why? because as a cousin to Gonsalves he believed that Gonsalves would finish the airport by 2011 and the new city would be finished five years after that in 2016. Ken was a little silly because he should have known better than most of Gonsalves ability to make things up, to embroider the truth and make it into blatant lies.

The Harlequin Buccament Bay Project based all its plans on the airport opening in 2011, they have also been shafted and they must be seriously in danger of folding because the airport is the key to much of their projected business. They were made promises and are now suffering from lies.

Venezuela Declares Right to fly Warplanes over sovereign Caribbean Islands

by Peter Binose

In a speech on national television, Venezuela’s president Maduro reports that the air defense areas of the country have been expanded beyond the Windward Islands all the way up to St Maarten. President Nicolas Maduro, said that his country has the right to defend itself in the skies above the Dutch Antilles.

Venezuela is already a bully of the seas claiming areas that it does not own, now it appears they are trying to bully the airspace.

We have to remember how PM Ralph Gonsalves supported Venezuela’s sea grab of Bird Island. Just what kind of betrayal was that?

The yellow area shows the Venezuelan Economic space, with the effect of Aves Island/Rock.

Under the International Law Of The Sea Aves Island is classified as a rock which does not get the 200mile economic zone, however Venezuela hasn’t signed the UNLOS treaty. This rock effectively removes a significantly removes most of the OECS’ economic zone.

… from Notes from the Margin article How Venezuela Controls the Caribbean Sea

“St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves said the OECS had accepted Venezuela’s sovereignty over Bird Island and that he would not allow anyone to dictate whether or not he should put pressure on the Government of Venezuela in relation to the issue”. Speaking at a press conference at the Caricom secretariat, Gonsalves said, “Nobody is going to tell me which questions are important.”

When public support for this type of Venezuelan communist regime wanes at home they try and turn public attention from local matters to the international theatre.  

WestJet’s Valentine’s Day proposals a huge hit. Kudos to Barbados Tourism Marketing Inc.

Adrian Loveridge – tourism expert, hotel owner

Kudos to the recently revitalised national marketing organisation renamed the Barbados Tourism Marketing Inc., for facilitating the production of a series of videos where the airline WestJet partners with the chain store Michael Hill Jewellery and a number of Barbadian tourism interests to highlight two couples who become engaged on our island.

At the time of submitting this column already well over 1 million people had watched the three videos and this number will rise substantially over the next few days. Add the media coverage by print, television, radio and other shared social media and realistically millions of people will be exposed to Barbados as a desirable destination. Timing of course, can be everything, and the fact that WestJet posted the videos just before Valentine’s Day can be no coincidence.

To reinforce the positive effect the airline rolled out a supportive seat sale to Barbados which required booking by 14^th February, but for travel up to 24 June 2015.

When preparing for the filming, a few cleverly conceived twists were applied and to quote WestJet’s Manager of Communitity Investment, Sponsorship and Experiential Marketing (what an incredible job title), Corey Evans, revealed that ‘girls thought they were auditioning to appear on a new WestJet commercial that we were shooting in Barbados, and had no idea what was going to happen’.  

A river runs through it… Argyle Airport runway, that is!

Yambou River and mud in the middle of Argyle Airport runway

submitted by the SVG Green Party

If anyone tells you that aircraft will land at Argyle in 2015, then that person is lying to you. The middle of the Argyle airport runway is a river and a muddy wasteland. The Argyle airport will take at least four more years, and even then, it will not be a functioning airport.

Since 2006, we have been bombarded with ULP regime nonsense about how the Argyle airport will boost the economy, but the reality is Argyle has been a curse to our country. Throughout SVG, towns, villages and communities have been starved of jobs and money, all for the sake of building Argyle airport for tourists.

From Fancy to Fitzhughes, Union Island and beyond, the needs of Vincentians have been ignored. Hospitals have fallen to ruin, the economy is virtually dead and the country is littered with tombs that once used to be flourishing businesses. The consequence has been high unemployment, high crime, destitution and poverty.
Vincentians have been made to suffer under the economic delusion that tourism and the Argyle Airport will bring prosperity. Well, they will not.

Having an airport does not guarantee prosperity. Barbados has had an international airport since 1938 and tourism for over 60 years, yet Barbados laid-off 3,000 government workers in 2013 and rolled out yet another national poverty alleviation programme a few years previous.

We have been lied to time and again, being told that Argyle airport will be finished in 2011, 2012, 2013, 2014 and 2015. One need only look at the muddy mess at Argyle to know that it will not be finished in 2015, 2016, 2017, 2018 or 2019.

The Yambou River is yet to be culverted; there is a mountain of mud in the middle of the runway area; the northern end of the runway is just mud and is being washed away by the sea; and, the cliff at Peruvian Vale village impedes final approach to the runway and will need to be knocked down and cleared away. 

Falling fuel prices no guarantee of increased tourism – Barbados must work smart and hard in a tough market

Adrian Loveridge – tourism expert, hotel owner

Most of us, of course, warmly welcome the current fall in fuel prices which probably in the hospitality sector be demonstrated by the greatest savings in electricity prices, especially those properties who have extensive air conditioning units.

But almost needlessly to say, that Government will collect a lower level of taxes and VAT, so it’s a two edged sword.

I also wonder how long it will take our limited number of distribution companies to pass on the benefit of reduced delivery costs as a result of cheaper petrol and diesel prices. Assuming of course, they will pass on the benefits at all.

Experts in the aviation industry do not expect any dramatic reduction in airfares and again it may work initially against the consumer’s interest while used aircraft values rise as fuel falls, slowing down the delivery of newer most fuel-efficient aircraft in some cases.

Across our major tourism markets the halving of oil prices will hopefully give people more disposable income, perhaps most notably in the United Kingdom, where we have witnessed a recent significant fall in the value of Sterling against the US Dollar.

The Key to Success for Barbados tourism

Judging by the unprecedented level of email holiday bargains on offer in the UK I have tracked, there is absolutely no room for complacency this year and particularly in the more challenging softer summer months. Key to the success of this will be to portray the destination as offering real value-for-money. And I do not mean attempting to achieve the almost impossible objective by making everything cheaper, but ensuring that every product offering is as good as we can get it and going that extra mile to make visitors feel rightly special. 

Scotland’s plan to scrap air passenger taxes changes everything!

Adrian Loveridge – tourism expert, hotel owner

Just weeks after writing in this column about the need to explore further smart partnerships, British Airways have announced they are working with two rail companies, Heathrow Express and First Great Western, to offer seamless connections for travellers living in the West of England and Wales on a single fly/rail ticket.

While the Heathrow arrangement will not directly benefit Barbados, the concept offers enormous potential with Gatwick, Manchester, Birmingham and the Scottish cities of Edinburgh and Glasgow.

Frankly I am surprised that British Airways have pipped Virgin Atlantic to the post on this initiative, especially as Virgin Trains are significant rail operators in their own right.

From a recent media release ‘The combined booking takes away the stress and fear of missing a flight, if a train is delayed or a connection missed, by giving customers the peace of mind they’ll be on the next available flight – and even get overnight accommodation if the next service isn’t on the same day’.

It has become increasingly more important, if we are going to regain market share that we assess the whole holiday product components, rather than just focus on the ultimate destination itself. Both from a consumer cost basis, but also to ensure it the most overall pleasurable hassle free experience.

The Smith Commission recommendation takes Scotland a step closer to determining whether their airports will either eliminate the Advanced Passenger Duty (APD) altogether, or dramatically reduce it. There can be little doubt that the overwhelming conclusion amongst the business community is that elimination would substantially boost the Scottish economy and give Glasgow, Prestwick and Edinburgh airports a distinct cost advantage over airlines flying from those in England. 

Will falling oil prices result in lower airfares? Barbados hopes so!

Twenty years of Advanced Passenger Duty

Adrian Loveridge – tourism expert, hotel owner

It seems almost inconceivable to accept that the dreaded APD (Advanced Passenger Duty) was implemented in the United Kingdom, or others would say thrust upon the industry, some twenty years ago.

There has been a lot of recent misinformation spread in the media, so I think it is time to clarify just exactly what is happening. From 1^st April 2015, the two higher mileage bands, C and D will be abolished and flights from the UK will then be included in band B at an APD rate of GB Pounds 71 per passenger for economy and GBPounds 142 for higher classes of travel.

Many are watching to see if the reduced aviation fuel costs with the continuing plummeting fall in oil prices, together with a slightly lower APD rate will be reflected in the cost of airfares from next April.

There are other glimmers of hope on the horizon including a strong lobby to have APD removed, or at least lowered on airline tickets for children. Personally I believe it would make a massive difference for families contemplating holidays in the Caribbean, especially during the softer summer months.

Scotland the Brave   

So many questions about LIAT Airlines – so few answers from LIAT or governments

LIAT Airline hangar fire destroyed financial & aircraft records.

Adrian Loveridge – tourism expert, hotel owner

As someone who has championed intra Caribbean travel for over 40 years and invested literally hundreds of thousands of Dollars of our own money promoting, what for Barbados is still just about our third largest source market, it gives me no pleasure in witnessing the dramatic decline in regional arrival numbers.

For the first eight months of this year our Caricom (including Trinidad and Tobago) stay over visitors are down by 6,686 persons.

There is probably very little I can add to the many industry professionals and travellers comments made about LIAT over the years, but initially thought that I had misheard one of our policymakers recently stating that, among the reasons why the numbers were down, was due to the airline operating smaller aircraft.

“A number of aircraft are still listed as ‘stored’. Did the destruction of engineering, maintenance and other critical records in the hangar fire prevent the saleable realisation of these assets?”

It sounded so wrong that I looked up a recognised aircraft fleet website and according to Planespotters LIAT currently operate 4 ATR (Avions de Transport Regional) 42-600’s, 4 ATR 72-600 planes and a yet to be confirmed number of Bombardier/de Havilland Dash 8 – 300 equipment.

I did ask LIAT’s Head of Corporate Communications for clarification, but in the week until this column was published, had not heard back.

I got the blues in Barbados on a Saturday night

Talk ya talk.

Cliverton and Robert are back.

Never had so much party in all our lives. Photos soon!

Robert took me upside down!

This isn’t us, but it could be.

clive

(photo courtesy of Great American Days, Georgia USA)