Support for better regulated regional airline

A former airline investor is all for a new private sector-led airline taking the place of LIAT, but argues that regional governments must make several adjustments in order to better facilitate intra-regional travel.

Prominent businessman Ralph Bizzy Williams, who was one of the directors in the now defunct low-cost airline RedJet, said he believed a private sector-led airline would be good for the region.

However, he told Barbados TODAY important decisions would have to be made in relation to rules and regulations for such an airline to survive.

He said as it now stands the system regarding regional travel was “fundamentally flawed”.

“You need a private sector airline, which hopefully the unions won’t cripple and it will operate under guidelines so the ministry of aviation becomes a regulator and the private sector entity is allowed to function as a real business, not as a charity. Right now LIAT is the number one charity in Antigua. If you can’t get a job anywhere else you get one at LIAT no matter how nasty you treat the passengers you are assured of a job,” said the outspoken businessman.

Williams said in addition to rules and certain conditions, there was need for a change in attitude among officials in the ministry of aviation.

“My view is that the governments must require all regional transportation, and I don’t think you can dictate to the ones coming from extra-regional, but require all [regional companies] to declare their rates one year in advance for a 12-month period. So in January they declare what they are going to charge, with a fuel adjustment clause for the entire year.

“If that is done that will prevent a government entity from wasting taxpayers money to put a private sector company out of business so that they will get rid of the private sector company and then raise their rates to whatever they want to raise them to,” Williams explained.

This, he said, would encourage inefficiency “which we have not seen with LIAT”.

Shareholder governments in LIAT – Barbados, Dominica, St Vincent and the Grenadines and Antigua and Barbuda – are currently coming to grips with the imminent liquidation of that airline, which is said to have been losing millions of dollars in recent years and owed millions of dollars to its creditors.

Barbados Prime Minister Mia Mottley this week agreed with prominent economist Dr Justin Ram that the region should look towards a private sector-led airline, lower taxes and develop a single air services agreement.

Mottley, who was speaking on a Grenadian radio show, said a plan was being developed which would see the review of taxes and matters relating to licensing.

As it now stands, the ministry responsible for aviation in Barbados has to apply to its counterpart in other countries to get a route licence once the airline is a Barbados-registered entity.

That was one of the main issues that caused RedJet to go out of business when it did. Officials of the airline had complained that there were delays in the applications being made to the other countries so they could fly to those destinations.

It was believed then that the delay tactic was being used to protect major regional carriers LIAT and Caribbean Airlines.

When asked about the possibility of investing in an airline in the region again, Williams who is the owner of several business ventures under the Williams Industries Inc. group, said bluntly: “not one cent of Williams Industries’ money or shareholders’ money unless they put the regulations and rules in place.”

He said: “There has to be rules, and everybody got to follow these rules. You have to declare your rates for 12 months ahead with a fuel adjustment clause so you can increase your rates if fuel rates go up and decrease them if the rates go down. In other words, it would give a new private sector entity 12 months before it is hit by a government entity trying to put it out of business. It is all logical.”

Williams said based on his experience with Redjet, which was started in May 2011 and collapsed about ten months later, no private sector entity can compete with a government-funded entity that governments can easily pump tax dollars into.

Williams also pointed out that he was concerned that if an airline was to register in Barbados and wanted to go to US territories it would not be able to do so.

Currently, if a Barbados-registered airline wanted to go to US territories Barbados would have to obtain a category one rating.

Being a Barbados-registered airline, RedJet was never able to start planned flights to the US because of Barbados’ category two rating, which is assigned by the US Federation Aviation Administration (FAA).

At the beginning of May this year, the FAA also downgraded the safety ratings of the Eastern Caribbean Civil Aviation Authority, after finding that the agency did not sufficiently comply with international safety standards.

Williams, who was one of the original interests in a ferry system several years ago, said the same rules and regulations to the aviation should also apply to a water transportation between Caribbean countries.

In fact, suggesting that the whole structure of intra-regional business be examined.

Williams said: “When are the governments going to get together and have a common external tariff and make it possible for a car that comes into Barbados and pay the duties to be able to go on a ferry and drive off in any other ferry in the Caribbean and be sold or go to do business like how it happens in Trinidad and Tobago or the US? Every day we tie our feet together. How are we going to move?”
marlonmadden@barbadostoday.bb