By Vernon Khelawan From Trinidad & Tobago Newsday

LIAT’s Chief Executive Officer (CEO) David Evans took time off from running the airline to offer some advice to Caribbean leaders about solving the perennial problem of air connectivity in the region and how to make a regional carrier happen.

In an op-ed piece published in the Antiguan daily — The Observer — Evans wrote, “Both the history and the current reality of Caribbean aviation can be characterised by a consistent failure over the last 50 years to provide an efficient air transportation system that meets the needs of the 40 million plus inhabitants of the region.”

Nothing in that statement is new. Every Caricom government leader is and has been fully aware of this, if not for the 50, at least 30 years and has refused to do anything about it, except pay the idea lip service.

Evans proffers the reasons for such a failure are “many and varied” and lists them as, chronic under capitalisation; economic adversity, sparse populations, poor hub structures, lack of investment in infrastructure and skills training and technology; political interference; trade union activism; national self-interest and a reluctance to work together towards a common goal.

Aren’t many of the reasons given above the reason for the lack of unity in the Caribbean? Aren’t these reasons the cause of the failure of the Federation and even today as it struggles to be relevant — Caricom? The “big fish in a small pond” syndrome is manifestly responsible for Caricom’s irrelevance, but you will not hear it coming from any leader up and down the archipelago. Every so often the talk of a regional carrier comes up, but that is all it remains — just talk. Evans wrote, “The distinct lack of progress towards the realisation of this dream suggests that it is probably unachievable without the political and economic cohesion that would allow such a concept to develop.

“Nevertheless,” continued Evans, “I believe there are elements of the concept that can be achieved with the active participation of the key stakeholders.” He has suggested six steps which could see the creation of a truly regional carrier – the realisation of a long held Caribbean dream.

It has taken this Briton a mere four months to identify the many issues which serve as obstacles to the proper development of aviation in the Caribbean, a situation in which we have been flying around in for decades.

The six steps proposed by Evans -:

• A political framework: Caricom consists of 19 full and associated member states. It has created a Transportation Commission; an Aviation and Safety Oversight System and an Advance Passenger Information System (APIS). Yet only a handful of governments and airlines participate in these bodies. All the governments and all the airlines of Caricom States should commit to full participation in these bodies and devote serious time and effort to delivering air transport benefits to their populations.

• Government ownership of Airlines: In his 2010 book Don’t Burn Our Bridges, Jean Holder, LIAT chairman, presents an eloquent case for government ownership of airlines on the simple premise that governments in the region simply cannot afford to leave such a strategically important industry as aviation exposed to the harsh economic realities of commercial aviation.

The recent disappearance of American Eagle from the region, underscores his point. On the other hand, with regional governments being, if anything, more cash-strapped that the airlines they own, there must be a case for encouraging private investment with governments maintaining a golden share.

This in turn would require these airlines to deliver an adequate return on capital invested, but without raising fares beyond the ability of their customers to pay. This is a balancing act, but can be achieved by driving out the large costs and inefficiencies that exist in all Caribbean airlines without having to resort to price increases.

• Taxation on Aviation: For every (US)$3 spent on air travel in the region (US)$1 goes straight into government treasuries. I have argued that a reduction in taxation on aviation would increase demand and actually increase the tax take back to the governments.

If such economic liberalism is too rich for financially risk averse governments, then I propose a small but important gesture: removal of the tax on children travelling by air. There is hardly a moral or ethical case to be made for taxation on children. It is moderately risk free and would probably be seen as politically popular.

• Passenger facilitation: Transferring from one flight to another in the region is a torturous process due to the differing security procedures. The endless completion of lengthy immigration forms to be presented after lengthy immigration queues is equally mind-numbing.

Customs regulations and working practices in some countries that stipulate that their officials only work on weekdays and require airlines to pay their overtime for their attendance outside of these hours, have no place in 21st century aviation. There are political, legislative and technological solutions for all these issues and the travelling public would be mighty grateful to see them implemented.

• Physical connectivity: The Caribbean airline members of the Association of Latin American and Caribbean Airlines (ALTA) should form their own subset of ALTA. These airlines should then commission a fleet and network planning expert to take all of the aircraft assets in the group and as a planning exercise, construct an optimum fleet network plan with costs and revenues and route profitability statements, free of individual ownership considerations. The resulting numbers may be sufficiently attractive for those airlines to consider some form of alliance.

• Virtual connectivity: All airlines rely on a host reservation system through which they sell and distribute their products. In large airlines these systems are usually Global Distribution Systems (GDS) which talk to other airlines and allow global connectivity and commercial agreements among the airline community.

Historically, these systems have been expensive to acquire and expensive to operate and often beyond the financial reach of a small regional airline. More recently however, the rise of alternative and cheaper web-based distribution platforms have put pricing pressure on the traditional GDS and consequently some airlines have moved away from these providers.

However, the new distribution platforms usually fail to provide full connectivity with the large global airlines. The Caribbean is one of the few regions in the world where the traditional GDS have not gained a strong foothold and the prospect of acquiring the business of all the airlines in the region may be sufficiently attractive to them to offer an economically viable propositions to the carriers.

If this were to come to fruition, in one stroke, the Caribbean airlines would be connected to the global airline distribution system with all the concomitant benefits that would accrue from linking the inter-continental airlines to the regional airline system.

Evans ended his piece saying that the six steps may ” fall short of the dream of a single Caribbean airline and will require time, effort, political will and a healthy amount of plain goodwill from all the stakeholders, but it would be heartening to see a start along the journey.”

For more on this story go to: http://www.newsday.co.tt/businessday/0,199712.html

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