ON THE RIGHT: Risk-sharing an option for air travel
The LIAT network spans 21 destinations from Santo Domingo in the north to Guyana in the south, covering most of the islands in the archipelago. Some of the 21 islands that we serve have a population that is less than 100 000 people.
I mention that because it is critical to the profitability of an airline and if profitability is to be achieved, you need people travelling. Our entire 21 destinations have about 20 million people. In the last five years we have been carrying just under one million on average so we have a very small market in the 21 destinations where we operate.
The majority of Caribbean Tourism Organization (CTO) member territories are served by LIAT; the 21 territories that we serve are all members of CTO.
More than 75 per cent of our traffic is from people who are domiciled in the region so we are basically dependent on what is happening in the region, the other 25 per cent are people who are coming from North America and Europe and they will be going to one of the destinations where there is no international traffic and are obliged to take LIAT to get to Dominica and St Vincent, for instance.
I can therefore say that LIAT is a major contributor to intra-Caribbean travel and indeed Caribbean tourism. Intra-Caribbean traffic has declined and we have seen a decline year-on-year since 2008.
Intra-Caribbean traffic is at its peak in the months of July and August. You get a little bump in either March or April, depending on when Easter falls, and then you get another little bump at Christmas time.
Sustainable tourism, which is what we are talking about in the region, needs sustainable air carriers. The sustainability of intra-Caribbean tourism is dependent entirely on sustainable regional air carriers. Without a sustainable air carrier or air carriers in the region, people will not be able to move from one territory to another. Intra-regional sustainable air service has been identified as a public good.
We have heard over and over how so many territories are dependent on tourism; people have to move between the islands in order for the territories to earn their living practically.
Viability has been a major challenge for Caribbean regional air carriers and everybody knows that LIAT and most of the other Caribbean airlines are struggling.
With the realities of intra-Caribbean tourism, we know air transport is the main mode of travel in the Caribbean but it is considered costly. Total air fares inclusive of Government taxes are just extremely costly and may have dampened air travel in the region.
In recent times many Caribbean territories have begun to realize and recognize the importance of intra-Caribbean tourism to their economies. Sustainable intra-Caribbean tourism may necessitate air service on a risk sharing basis. Who gets tourism? Territories that are building an attractive product, have something to offer, are effectively marketing their product, and are introducing innovative programmes.
• Lesroy Browne is advisor to LIAT’s chief executive officer.