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.
We try to make sense out of nonsense, and always make nonsense out of common sense. Does anybody feel that regional Heads of Government and other officials, don’t know the basic consequences of their fiscal and political actions? These politicians are supposed to have a higher brain level than most of us. But any dummy could figure that regional travel could be a bigger boost to regional tourism, than the international tourist trade, but what hampers it, is the various taxes added to LIAT’s airline ticket. But all you get from the various Prime Ministers, is much talk and little action. Talk, talk, talk. Just as with the Caricom issue. How can we talk about integration and free travel without borders,in the absence of having one common currency among us. Let’s deal with that first, before anything else. It would level the playing field, then we talk about free movement of people. any thing else, will create social tensions among immigrants who relocate from other islands, to – let’s say – Barbados, where the currency exchange rate is greater. That is my nonsense contribution.
“A rap sheet of taxes”.
Lord preserve me: I agree with my fellow scribes Johnny C., and Alex A.: indeed…a riddle inside a conudrum and wrapped in an enigma. If only we cud “rewind” LIAT to the start, and only let it fly after ALL CARICOM governments had each pulled their wallets to ante up the share-capital….AND signed a treaty not to bleed it dry with taxes. Sigh…..
As in late-stage cancer…we CUD let it wither and die…and allow market forces and cold realities to jolt all P.M.’s to their senses.I wonder whether C.D.B. might be willing to wield a “big-stick”…and force this sort of “major surgery”, next time LIAT we goes hat-in-hand to them for yet another bail-out?
US$379.70 from Barbados to Antigua for air fare on LIAT. Now this is why most people go through the Caribbean on a CRUISE SHIP.
“WAKE-UP YOU GUYS”.
Well don’t need experts to tell us any kinda travel in between islands horrendous as hell,high taxation plus a number of other problems, simply put these so call leaders amateurs clueless to anything.
I would bet the cost to travel 1 mile by air between the Caribbean islands is the highest air mile cost in the developed world. Maybe next time the caricom heads meet they can discuss one flat tax per destination per head.
You will survive Tony, you will survive.LOL.
I know every day won’t be Sunday.
Mia Mottley, holding more than 50% of shares in LIAT, met with Ralph Gonsalves, Minister Symmonds and the CEO about a month ago now and we are yet to be told a single word of the results of that or any other meeting since.
Mia Mottley, campaigning on a mantra of CHANGE and TRANSPARENCY, has the reins in her hands to force LIAT to become not only a commercial entity but to stop the eternal drain on our taxes, but for some reason neither change nor transparency is evident as far as LIAT is concerned.
If she does not have the time for LIAT because of other pressing national financial issues, then she should say so (transparency) and let LIAT bumble along until she has the time… to Barbados LIAT is not a rogue rum shop at Four Corners, it is a serious drain on our economy and a serious regional resource.
Because she has taken a look at LIAT – with professional advice – and still does nothing is neither change nor transparency, and if she wants to retain credibility then she needs to make s statement so her citizens and constituents know where they stand.
There was a startup airline out of Barbados charging only $25 to fly from Barbados to Guyana.
My understanding is that Trinidad Gov’t refused to give that airline landing rights and it subsequently went out of business.
My observation about Caribbean leaders is that most of them although highly educated are not critical thinkers and hence, stagnation within the Caribbean islands will remain the norm.
Why was Straughn at this meeting?
https://barbadostoday.bb/2014/05/01/reduce-taxes-new-liat-ceo-says/
Everything is MIA, MIA MIA….. hold on fellas, we lost Barrow and Tom gone in their prime, wunna want to do the same to her ?.
This is the way it is in Barbados…you are wasting your time….the only interest here is how much money they can bring in.
Regional travel is total garbage, just another way to keep us from our regional brothers and sisters. I agree with you Johnny Crow on this one.
The needs are always more expensive than the wants
It’s called supply and demand
Econ 101
If persons need to travel then they pay taxes
If people want to travel they decide on it’s importance and make a choice
Simple as that
Too much talk talk talk