The cost of regional transportation has again taken centre stage in recent times, particularly with the challenges that continue to face regional carrier LIAT, and the decision by the Caricom Heads of Government to push more for the free movement of goods and people across the 15-member grouping.
But if we are to truly fast track regional integration and better facilitate intra-regional travel, then transportation must become more affordable. We acknowledge though that this will not be an easy task and admit too that getting LIAT to the stage where the region needs it to be, will likely be just as, or even more difficult to accomplish.
The reality has often been that while the region as a whole has benefited from the airline’s operation, few actually contribute directly to its operating costs. That has meant that the extent of its financing has come from the main shareholders, the governments of Antigua and Barbuda, Dominica, St Vincent and the Grenadines and Barbados.
Now in recent times there was a proposal on the table for Caribbean countries to contribute to an emergency fund to the tune of just over US $5 million, to help the airline keep flights in the sky, but those minimal revenue guarantee (MRG) proposals have not been well received by some. At the same time, however, others have accepted that to lose the service provided by LIAT would damage their economy.
But this move should not have come as a surprise to these countries, for this has been touted by the shareholders for some time. It has long been their belief, and it makes sense, that LIAT could be in a far better position financially and perhaps not have to impose such high airfares on us, if each and every one of the countries that it serves gave some kind of financial backing to the regional carrier.
The principals of the airline have long pointed out that the air carrier could not continue servicing unprofitable routes, and if the countries to which the airline flies do not give some form of support to the company, they could be removed from the list of destinations serviced. But they have never followed through on the threats, so perhaps it is time that they do.
As such, we support any such move, especially hearing from Prime Minister Mia Amor Mottley that there have been some flights that only had one or two passengers on it. This certainly cannot be allowed to continue.
Now no one can deny that LIAT has had serious issues. Over the years there has been public outcry about poor customer service, delayed and cancelled flights, lost luggage and the most nagging issue, the overall high cost of airfares to its various destinations, due to high fuel costs and heavy taxes imposed by regional government. But, it has been argued that if Caricom countries serviced by the air carrier provided it with some kind of support, just as it pays marketing costs to overseas air carriers, LIAT’s fortunes could actually improve.
Instead, what we have seen over the years is several governments being openly critical about the management of the airline, while a handful, Barbados included, have been willing to put their money where their mouth is, and assist the company in becoming the best that it can be.
Going forward we have to look at ways to make the carrier profitable and while there is the tendency to want to manage it as a public good, privatisation maybe the better option.
Sacrifices have to be made for we cannot continue as we are, for as they say the definition of insanity is repeatedly doing the same thing and expecting different results. We say that because not only is it important to our economies, but LIAT has a major role to play in regional integration. As such, we believe the onus is on the region to work collaboratively to get the operating model right.
—Courtesy Barbados Advocate