(Antigua Sun) – The inability by regional governments to subsidise the airline industry has been cited as among the reasons why LIAT has to maintain high fares.
While speaking at a press conference following a meeting with prime ministers of LIAT’s three main shareholder governments in St. Vincent, Chairman of the airline Jean Holder gave several reasons for the high airfares.
He said the base fares represent about 55 per cent of the ticket cost while the fuel charges represent about 15 per cent of the cost and insurance.
“Finally, there are various add on and tax. If you survey the international scene, you will find that all of the government everywhere have had to increase taxation on their transportation,” Holder told reporters. “The customer at the moment is regrettably paying the commercial costs of operating an air transportation service in the region.”
He said last year, airlines worldwide lost an estimated US$10.4 billion and that LIAT struggled to maintain its 900 staff and they have not considered at this time sending anybody home.
“I would love to be able to say we are going to be able to offer a much cheaper service but that is very difficult. I can tell you that everything is being done and we have promised the prime ministers that we will review the base fare and see what we can do,” Holder stated.
Prime Minister of St Vincent & the Grenadines, Dr Ralph Gonsalves, backed Holder’s statements by saying that the airline is faced with increasing expenditure including fuel, maintenance, airport charges as well as aircraft ownership costs.
Gonsalves went on to say that since 2007, the average base fare on the aircraft had increased by three per cent with 30 per cent accounting for taxes and other add-ons by the various airports in the region.
Barbados’ Prime Minister David Thompson added his voice by saying that he would like to see regional air travel to be as cost effective as possible for Caribbean citizens.
He said as the major shareholders of LIAT, the three governments had an obligation to ensure that they do all within their power to provide low cost travel at the highest quality to Caribbean citizens.
Thompson was quick to point out that the regional governments had obligations that had to be met including servicing the loans for upgrading their airports as well as maintaining a high standard for aviation policy all of which come at a considerable cost.
Meanwhile, Prime Minister Baldwin Spencer noted that improving the product at the airports could be a very costly affair and therefore governments have to look closely at the tax structure that they put in place to service these loans.
