Report commissioned by the Economics Department of the Caribbean Development Bank (CDB)

From The Caribbean Development Portal Source: Caribbean Development Bank (CDB)

Making air transport work better for the Caribbean Authors: Ian Brunton, David Warnock-Smith Year: 2015

From the document:

The Air Transport Sector in the CARICOM Region is close to reaching a tipping point. Some domiciled carriers that have made significant contributions to the socio-economic welfare of the economies they have served over the years, are going through a period of uncertainty. The airlines continue to make losses, with shareholder governments concerned about having to prop them up indefinitely.

Against this backdrop, the Caribbean Development Bank (CDB) has commissioned an independent study that details the need for a complete rethink of the modus operandi of the regional airline industry, and spells out a set of practical ‘how to’ recommendations to:

a. limit the vicious cycle of losses, high debts, bankruptcies and bailouts; and

b. to place the industry on firmer footing in order to facilitate its re-launching into the global marketplace as a stronger competitor.
The Study was carried out between Autumn of 2014 and Spring of 2015, and solicited participation from a broad range of air transport industry stakeholders, including the Region’s domiciled carriers.

Over the last 45 years, there have been efforts to force cooperation among the major airlines of this region (Holder, 2010). Unfortunately, most of these efforts have proven fruitless. Reasons can be advanced as to why there has not been more cooperation. However, the problems remain and further efforts are needed towards resolution.

This study proposes a fresh two-pathway approach:

a. the setting up of a ‘Quick-wins’ CARICOM airlines association to identify cost reduction and revenue enhancement opportunities that can be pursued jointly; and

b. the establishment of a high-level Air Transport Reform Authority to address the longer-term structural, institutional and industrial barriers. The Authority would consist of proven aviation professionals from each of the CARICOM states, accountable to the Region’s taxpayers and reporting directly to their respective Heads of Government.

To download a copy of the 72 page Report go to: http://www.caribank.org/wp-content/uploads/2015/06/New-CDB-Air-Transport-Thematic-Study-Digital-FAW-19MAY2015-1554.pdf

For more on this story go to: http://caribbean.eclac.org/content/making-air-transport-work-better-caribbean