New airlines attempting to break into the regional air transport sector are likely fail due to the number of unprofitable routes, according to Minister of Tourism and International Transport Richard Sealy.
Sealy’s ominous warning came just hours before new carrier Trans Island Air was set to roll out services to select regional destinations.
In what could be seen as portent in the wake of the minister’s caution, the official launch of the carrier had to be postponed after a tropical weather system prevented several flights from landing at Grantley Adams International Airport.
Today’s system grounded key officials, including Minister of Commerce and Industry Donville Inniss, who were due to join St Lucian Prime Minister Allen Chastanet at Bay Garden Hotel in Rodney Bay, St Lucia, for the ceremony.
The Barbadian media had arrived on an earlier flight and had linked up with the press from St Lucia and St Vincent before word came of the postponement.
Only last night, at the tenth anniversary celebrations of the Airlines Executive Lounge at Grantley Adams International Airport, Sealy had cautioned that the Caribbean aviation market could be just as unforgiving and unpredictable as the weather.
Pointing to the failure of REDjet, Sealy said embattled carrier LIAT had stood the test of time because of the support of the shareholder governments.
“It would be extremely difficult for an airline, and certainly one offering as many destinations as LIAT does, to be profitable. I am not going to say it is impossible but it is unlikely. I have two different top airline executives that I have met from outside of the region who were very familiar with the Caribbean and they told me that they would never want anything to do with LIAT,” Sealy said.
The minister of tourism said a high percentage of the routes in the region were unprofitable, and it was only through a sense of social responsibility that LIAT continued to service these routes.
“LIAT is a peculiar creature because of the governments’ involvement they can take on the social routes. You can talk about the social good in the case of LIAT and there are other providers of aviation services that private sector interests would expect a return on their investment.
“There was analysis done sometime back which found that just under 40 per cent of the routes that LIAT is on is actually profitable, 60 per cent were social routes. No normal airline could operate like that, but LIAT, because of its mandate, can think in those terms. The aim is not to make money but at the same time not have excessive losses,” he added.
Trans Island Air is officially scheduled to begin operations next month and promises one-way airfares as low as US$50 before taxes. The airline is currently set to service routes between, Barbados, Dominica, St Lucia, Grenada and St Vincent.