Leaders to review airline taxes and licensing issues

(Barbados Today) Caribbean governments are plotting a new course to stimulate and facilitate intra-regional travel, Prime Minister Mia Mottley today disclosed.

That plan, said the outgoing Caribbean Community (CARICOM) Chairman, includes a review of taxes, long blamed for the high cost of intra-regional travel, and matters relating to licensing.

With the final departure of LIAT 1974 Limited on route following a weekend decision by its shareholder governments to liquidate the insolvent airline and form a new carrier, Mottley signaled it would not be business as usual as efforts get underway to fill the void.

Appearing as a guest on the radio show Ladies Room aired on Power 95.1 FM in Grenada, she told listeners that while LIAT is a “treasured institution” it could not continue with millions of dollars of accumulated debt.

“It is a sad moment but, equally, we are not going to leave Caribbean people stranded, because we understand that at the core of the community is the issue of transport and communication,” she said.

The Prime Minister pointed out that a recent paper she received from the CARICOM Secretariat showed there were 38 airlines flying in the Caribbean region. Of those, nine are overseas carriers, leaving 29.

“Now, it is true that by far the greatest majority of them are in the Northern Caribbean, but in the Southern Caribbean you have a number of them already flying and we have had a number of applications within the last few days for others to fly to various countries,” she said.

Mottley said regional leaders have started the conversation on how best to facilitate existing airlines to ensure they can deliver cost-effective and reliable travel.

“I believe that heads have agreed that we are going to look at taxes, and Prime Minister [Dr Keith] Mitchell has been strong on this again, Prime Minister [Dr Ralph] Gonsalves has already started, and we are looking at it in Barbados. A number of us recognize that even if we needed the money before we are going to have to create that kind of environment to be able to stimulate travel in the region, because travel has a great multiplier effect within the context of our community and other things,” the Barbadian leader said.

“We are also going to have to look at how we can also deal with the licensing because even though we have these 29 airlines about the place, in some instances they don’t have the access, the freedom of rights that they need to be able to move freely among the islands, so that is our role as governments.”

Mottley said she favoured the private sector taking the lead on the proposed new carrier to replace LIAT, referencing comments made by leading economist Dr Justin Ram, chief executive officer of the securities trading firm GSEC, who told Barbados TODAY in an interview on Tuesday that the Caribbean should look towards a private sector-led airline, lower taxes on airfare and develop a single air service agreement for the region.

“I agree with him,” Mottley said. “I think governments may keep small shares in whatever may be created to give the private sector investors the comfort that we are not going to subject them to regulatory confusion and long, long processes. But, predominantly, we need lean entities that are private sector driven, where people are focused on how to stay afloat through making a profit and through ensuring there is adequate cash flow, while providing the service to our people.”