Regional regret over REDjet woes

(Barbados Nation) A day after low-cost carrier REDjet announced the immediate suspension of its flights, one of its primary regional competitors moved hastily to pick up the slack – as Caribbean officials expressed strong disappointment over its seeming demise.

“This is clearly a disappointing development since the Caribbean needs REDjet,” said Caribbean Tourism Organization chairman Ricky Skerritt, who admitted the news caught him totally by surprise.

Skerritt, who is also the minister of tourism of St Kitts and Nevis, said he needed more time to study the implications.

Former St Lucian minister of tourism Allan Chastanet also reacted to the news: “Tell me which airline in the region is making money?”

He also said: “Look how long it took REDjet to get its route rights to fly into St Lucia from Barbados,” while complaining that there was simply too much bureaucracy and official red tape within the regional aviation sector.

He added that to date Caribbean Airlines was still awaiting permission from Barbados to fly into St Lucia

“We have to sit down and start looking at aviation in a holistic sense,” said Chastanet, who wants there to be an open-skies policy that allows “all CARICOM registered companies to fly equally”.

However, St Lucia’s Prime Minsiter Dr Kenny Anthony told the SUNDAY SUN he had always thought that REDjet was a “courageous investment”.

“Firstly, when REDjet entered the market, you will recall that airlines all over the world were reeling and that they faced major difficulties because of [rising] fuel prices,” Anthony explained.

Added to that, he said, the Caribbean had proven to be an exceedingly difficult place to operate airlines, not only from the standpoint of regulation or licensing, but owing to the very nature of the islands with “several airports, short distances, and the cost of operating airlines tends to be very high; overheads are very high”.

Anthony also responded to concerns raised by REDjet about not receiving government support and assistance. The St Lucian leader said while he was not in a position to speak on behalf of Barbados, where the carrier is based, “what I can say is that governments throughout the Eastern Caribbean are reeling from the issue of subsidies to airlines”.

“We have just got into office in St Lucia and we now have to face fairly heavy bills to pay airlines who are induced to enter St Lucia to support our tourism industry.

“[Therefore] I don’t know for how long governments can continue to provide subsidies to airlines, and this is therefore a very, very challenging problem,” he said.

However, Anthony believes the owners of REDjet do have a point about the “uneven competitive environment”.

He is also concerned that the region could easily be held hostage in a market in which there is one dominant airline.

“For example, when you have industrial disputes between LIAT management and its pilots, the entire region is at their mercy; and I am not too sure that is the best thing for the region,” he said, while acknowledging that the “area may well be far too small for too many airlines”.

“I really do hope they can find a formula to help them [REDjet] to fly again,” said Anthony, who is not expecting any major fallout for St Lucia from its suspension.

The low-cost carrier, which entered the marketplace last year, got off to a rather bumpy start in several key destinations, but regional passengers immediately welcomed its discounted fares which proved to be an issue for LIAT.

Back in April when REDjet was first announced, LIAT chairman Jean Holder had suggested that its fares were simply too good to be true.

“If you are producing a service or a product of any kind and trying to sell at a lower cost than the cost of production – it doesn’t matter what you are selling – it is not a sustainable business model,” he said then.

But yesterday as the suspension news took regional passengers by surprise, Holder said his priority was in helping to transport displaced REDjet passengers who would have booked flights before Friday night’s announcement.

“We’ll do everything we can to assist REDjet with any issues they may have in terms of moving people. We’ve been in touch with them and have promised to assist them. We have also had a number of calls from travel agents and so on.

“We have given REDjet the assurance that we’ll do anything we can do to assist in this difficulty. That’s how airlines work. When in difficulty we help each other. You can’t just leave people stranded. The decent thing is to do all you can to move the traffic, and we’ve already started,” Holder told the SUNDAY SUN.

Asked what effect the REDjet development would have on intra-regional travel, Holder refused to speculate.

“We’re a Caribbean airline and the first order of business is to supply a service to the public,” he said.

 

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