Sabotage played role in REDjet demise – former director
(Barbados Nation) A former REDjet airline director admits that the carrier’s management made some mistakes, but he insists that sabotage played a role in the airline’s demise.
While not naming any particular person or entity, Ralph “Bizzy” Williams charged yesterday that its main competitor LIAT was allowed to get away with predatory pricing, while the aviation authorities in some countries put so many stumbling blocks in the way of the former Barbados-headquartered airline that its demise was inevitable.
REDjet, the trading name of Airone Ventures Limited which first tried to set up operations in Jamaica but moved to Barbados after being denied permission by the Jamaica Government, lasted just under 12 months in the skies.
Speaking at this week’s Editors’ Forum at the Nation Publishing Co. Limited, the businessman and former REDjet director revealed that the region was very unlikely to get the private sector to fund the creation of another regional airline unless there were some fundamental changes to the current structure.
Williams, who had few kind words about Barbados’ Civil Aviation Authority, said it was incumbent that new regulations be established to prevent carriers from “introducing predatory pricing as soon as a new competitor comes on the market and then after they have killed the carrier, immediately increase their prices back above where they were before”.
REDjet ceased operations on March 16, 2012 after falling into deep financial trouble. It faced significant delays in getting approval to fly to a number of destinations serviced by LIAT, which is owned by several CARICOM governments.
In an obvious reference to LIAT, the executive chairman of Williams Industries contended: “You were selling a seat for $500 when a new carrier comes into the market. All this time you’ve been selling this seat for $500 you were not concerned about the plight of the public, but as soon as this new carrier comes into the market you use taxpayers’ money [to significantly drop your prices].
“That is what I object to. If you are using your own money – no problem [but] you use tax dollars to drop the price to $200 to put the new carrier out of business and immediately after you sell your seat for $700.”
Williams, whose investments range from construction to telecommunications and alternative energy, told THE NATION’s editorial staff “something has to change”.
According to the executive: “If it don’t change you will never get anybody investing in a regional airline again.”
One of his solutions was for airlines to be made to declare and hold their fares to destinations for at least six months “so that you can’t fiddle with your rates to put a new competitor out of the market”.
Williams said competition was good but it had to be fair.
At the same time he admitted that REDjet’s management lacked enough experience in the airline industry and he also expressed misgivings about the extremely low introductory rates that REDjet brought to the market.
He said: “Instead of going with $9.99 we should have gone with $19.99 for the first seat. It was our fault.”
LIAT recently upgraded its fleet of aircraft, securing a $130 million loan from the Caribbean Development Bank for the exercise.