Reduced taxes, cheaper fare, says LIAT chief
The new man in charge of LIAT, a British aviation veteran, believes cutting the taxes on the regional carrier would lead to lower air fares.
David Evans, who has 35 years in senior roles in the aviation industry, was appointed the chief executive officer of the chiefly island-hopping service from April 22.
“In general terms, I believe a light taxation regime stimulates demand and the net effect of that is that the take back to government actually increases. I thoroughly support a long, hard look at perhaps easing the tax burden on the airline,” Evans said.
Antigua, St Vincent and Barbados are the major shareholders in LIAT, with recent small-scale investment by Dominica, and Evans said that the airline collected 66 different taxes totalling US$30 million annually for regional governments.
Evans was taking part in The TaX Factor – the Caribbean Tourism Organisation’s first TV programme for 2014 – on Wednesday night.
The CEO was joined in the live broadcast from the Caribbean Media Corporation studios in Barbados by Neville Boxhill, aviation consultant with the Barbados Tourism Authority, and economist and business consultant Ryan Straughn. Elizabeth Scotton, the chief commercial officer at Sangster International Airport, Jamaica, joined the discussion near the end by telephone.
During the 90-minute broadcast, the discussion focused mainly on the problems affecting inter-island travel, including costs, lack of competition and a comparison of international airfares versus regional ones.
“The debate I would like to have with not just shareholder governments, but with the governments in general, is to say please look at the overall economic and social impact that an airline like LIAT has,” Evans said.
He added that while competition was vital, there was scope for cooperation among carriers.
Boxhill queried if the reduction of taxes and regulatory impediments would stimulate more competition or travel.
And if that is the case, he wondered, would LIAT be able to cope with the increased volume?
If not, it was back to square one, he said.
Scotton felt that more competition would increase the access, which in turn would impact the problem of cost.
Straughn was concerned that the governments focused more on bringing tourists to the island rather than on moving around people and goods in the Caribbean.
“Our governments subsidise a lot of the foreign airlines so that when we [say that] we can go to New York for the same price, it is not the same price . . . . The fare that you see is not
the real fare . . . .
“The solution is really rooted in the need to work together and bring more businesslike practices to the running of transportation,” he said. (AC)