The COVID-19 pandemic just might do for Caribbean air travel what countless passengers, critics and experts have long advocated – force the slashing of passenger taxes to make island-hopping more competitive, according to the influential trade group of the world’s airlines.
Declaring the state of the global airline industry as being “as bad as one could expect”, a senior official of the International Air Transport Association (IATA) suggested Caribbean carriers will need Government support to resume any form of service.
Appearing on the Caribbean Tourism Organization (CTO) podcast, COVID-19: The Unwanted Visitor, Peter Cerda, IATA’s regional vice president for the Americas also predicted the aviation industry will emerge from the crisis with fewer carriers flying small aircraft with leaner services to fewer routes.
“When it comes to the Caribbean, it won’t be the same market,” Cerda said.
The IATA official predicted that international travel will return to the Caribbean by June, but said Caribbean economies could lose $1.48 billion (US$740 million) and face 23,000 job cuts if borders remain closed through to the end of June. When all of travel and tourism is considered, the cost to the region could reach $13 billion (US$6.5 billion), with over 350,000 jobs at risk, Cerda said.
In a bid to help the regional airline recover from the pandemic, he suggested Governments slash the cost of air travel. Taxes and Government fees account for as much as 60 cents on every dollar in airfare.
Cerda told the CTO podcast: “Governments can… help the international carriers continue to operate there [by] lowering passenger fees and taxation fee.
“One of the biggest problems that we’ve always faced in the Caribbean is a very highly taxed market. And it’s always taxed on the airline side, on the passenger, consumer side. And this will be a big challenge for the Caribbean once we are able to escape from this crisis.”
The IATA executive predicted a sluggish resumption of air travel as would-be passengers opt to remain close to home. But he said the Caribbean’s proximity to the United States and Canada gives it an advantage it can quickly lose if the countries fail to be prudent.
Cerda said: “Because of the financial crisis that will follow the apprehensions that the consumer has, if the Caribbean does not position itself – that it is competitive, it has a good level of service in terms of medical services, it has the right procedures being implemented – these passengers may decide to go somewhere else, somewhere else in Central America, Mexico or even see in the US.”
With most aircraft grounded and airlines facing financial ruin, IATA has asked all Governments, including those in the Caribbean, to provide low-interest loans through their lending institutions.
He said many have already stepped forward to provide assistance but warned that those who do not will be at the end of the queue for service when flights resume.
“Those countries that are helping the industry will position themselves in a much better way when the crisis is over to reinstitute flights. In those countries where they are not helping their airlines, those airlines are going to be in a very difficult situation to be able to restart.”
IATA’s 290 airline members account for 82 per cent of the world’s air traffic.
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