Air space - by Marlon Madden October 5, 2018

Just as Barbados added more taxes to airline tickets, Caribbean governments are being told lower taxes and a single airspace would “free up the Caribbean skies” and encourage more intra-regional travel.

High taxes and a lack of cohesive legislation continue to be the major hindrances to the expansion of the airline industry and inter-regional travel within the Caribbean, say industry experts, who placed the long-standing issues back on the table during the State of the Industry Conference (SOTIC) 2018 here.

Among those leading the charge against the high taxation was the island-hopping airline LIAT, which is part owned by Barbados.

LIAT’s Legal Counsel Diane Shurland challenged participants in a panel discussion on regional aviation to book a LIAT ticket online to realize that government taxes accounted for approximately half the airfare in many instances.

“I challenge you to go on liat.com and search for flights let’s say between Barbados and Antigua or St Lucia and Antigua and then when you pull up the fare, look at it closely . . . it is a rap sheet of taxes,” she said.

“It is near impossible to encourage people to travel to support the tourism industry if you have growing taxes, fees and charges. It is near 50 per cent of your ticket cost and look at the description of the charges and judge for yourself. It makes the industry extremely difficult,” she added.

When Barbados TODAY searched for a ticket between Bridgetown and St John’s for travel for one week from January 20, the cheapest price found was US$379.70. Of that amount there were eight Barbados taxes and fees amounting to US$141.95.

The airfare alone was merely US$80.

On the return leg from Antigua and Barbuda there were six charges amounting to US$77.75, while LIAT’s price was also US$80.

Barbados, the majority shareholder in LIAT, has long been criticized for its high taxes associated with travel going back over successive administrations.

But that did not stop Government from introducing a fee of $70 (US$35) on travellers within the Caribbean Community (CARICOM) and $140 (US$70) on international travel, which took effect October 1, as part of a wider revenue-raising austerity package.

Agreeing that ticket prices were simply too high because of the various government taxes, Chief Executive Officer of InterCaribbean Airways, Trevor Sadler, suggested that governments charge regional travellers only a portion of the tax rate that they apply to international travellers.

“Air service is a critical component. Unfortunately, many governments have seen it as the cash cow. The airport is like Las Vegas . . . and naturally you just keep trying to extract a little more and a little more,” he said.

By taxing the regional travellers less than international travellers, economies in the Caribbean could experience an increase in tourist spend, Sadler argued.

“People are going to put that money in taxes back into the economy be it one more night at an hotel, two more beers, three more dinners, four more t-shirts.

“You just might not be able to measure it in the same way. This is how we can address inter-Caribbean travel, by reducing taxation. It will surely stimulate a greater amount of travel,” said Sadler.

He declared that his company would be introducing a new flight from one of its destinations to Barbados this coming winter.

But he declined to say from where the Turks and Caicos-based airline would fly to
Barbados and when the exact commencement date would be.

He would only disclose that it would be “a couple flights per week and then we would build frequency with the potential to connect to other markets”.

LIAT’s Shurland also welcomed movement in relation to the CARICOM Multilateral Air Services Agreement (MASA) with the signing on of several of the 15 member-states earlier this year.

But she said implementation of the agreement was simply too slow, suggesting it was time regional governments “free the Caribbean skies”.

“We have no domestic flights. All LIAT’s flights are international flights in one Caribbean. That is something that really must change,”
she said.

Pointing to the experience of travel during the 2007 Cricket World Cup in the Caribbean, Shurland added that this was “the best time for Caribbean travel”.

“We moved freely, we moved frequently and we moved without restrictions. Was there any crisis, any security issues out of that movement? No. Why then in the Caribbean must we treat our travelling public, locals and tourists alike, as if they are flying between New York and London every day, why can you not move freely?” she asked.

The experts’ comments came as they participated in a panel discussion on the topic Aviation: The Sky is the Limit, as SOTIC continued here at the famed Atlantis resort.