Barbados does not have a minimum revenue guarantee in place with COPA Airlines.
Responding to questions raised by Opposition Leader Bishop Joseph Atherley as he wrapped up debate on the Airport Service Charge (Amendment) Bill 2018, Minister of Tourism and International Transport Kerrie Symmonds said while GOL, which flew from Brazil, had a minimum revenue guarantee of US$9 million every year, the Mia Mottley administration had no such arrangement with the airline out of Panama.
“Copa functions on a contribution, first of all, of US$800 000 from the Government of Barbados which goes directly towards supporting the co-marketing effort with Copa Airlines itself; co-marketing because Copa Airlines has undertaken as part of the process to do the marketing of the airline together with Barbados as a beneficiary of the airline service,” Symmonds said in the House of Assembly on Tuesday.
He said that money was used for marketing in Brazil, Colombia, Chile and Panama where Barbados has “a very limited footprint”.
This includes promoting Destination Barbados in Panama City, similar to what was done in Times Square. Cinemas are used in the “more exclusive communities” because Barbados is a more high-end destination, “strategic advertisements in magazines because of the nature of the reader of those magazines” and pop-up advertisements on the Internet.
Symmonds added: “In addition to that US$800 000 there is a $1.2 million service guarantee to Copa Airlines which runs over the course of three years and that guarantees the service to Barbados for three years. It has nothing to do with yield, it has nothing to do with the load factor of the aircraft. It is obviously in our interest to try to maintain the load.”
The minister said loads were currently at 95 per cent capacity and it was in our interest to maintain this.
“The understanding is if we can maintain that load factor, over let us say the next six months, then there is every likelihood that Copa will put on an additional two flights per week. But if we were to lose it, which I believe we must fight hard not to do, there is no change on the fact that we have a $1.2 million service guarantee and that the plane is available to us for a period of three years.”
Symmonds said they started with an aircraft that would carry about 120 passengers, but had expanded to 188, given the level of demand and the speed with which it was released. Copa’s inaugural flight from Panama City was made last Tuesday.
The Amendment Bill was passed. (GBM)