For a country which deals with huge inflow of tourists that covers as many as 31 island states, Caribbean air services are commendable and it is a great challenge for the government to get it right due to constrains of geography and economy. Those many number of states call for a dual level of control and management- central and at regional level. Another constraint which comes to light is the varied range of population in all the states- but they all have to be connected through air bus services. A lot of things need to be considered- level of demand, seat capacity, the costs of maintenance and operating expenditure. The archipelago presents a lot of difficulty in terms of air transportation service and it is no less than a nightmare to hold everything in place.
Costs and Subsidies are important to deal with
Since the Caribbean islands see a large tourist inflow, it can be safely said that they fall back upon their air transport services for their social and economic growth. However, there are two major problems; it is very unlikely that one of the entrepreneurs in the nation will take up transportation as a social service and the government providing large subsidies to keep the airline services afloat.
There have been speculations that the privatisation of the Caribbean air transport is the answer to all the miseries. That theory however has been tested and failed during the mid 1990’s. The country has since then seen many small private sector companies from the country and abroad coming up with their airline services, but none has stuck around for long. There have been instances in the past where the Government has had to take the reins of an airline to save it back after the privatisation did not work much in the favour of the airlines. This makes the fact very clear that if air services in the Caribbean are to function smoothly, the core services will need to be under the control of the Government and no less. Private Sector ownership is not likely to turn in any profits.
Calls for Rationalisation of Air Transport Services
In the last decade, the whole world has seen some tough economic times. This has had repercussions on all the industries and airline is no exception. Caribbean along with the rest of the world has seen many acquisitions and mergers. This makes it necessary for a strong channel of communication between the various airlines for cooperation and smooth operation. As much as the Government would like to intervene, its suggestions have not been followed in the past. There has been last minute change of plans and backing out decisions and many other reasons that has seen great ideas dying. The air transport services have seen a lot of negative impact occurrences in the past decades and millions have been lost to no case.
There are communities that convene meetings and come up with suggestions like removal of taxes from the operating airlines and reduce the fares. But they leave out one important aspect- how is that supposed to help the maintenance and upkeep of airports.
The possible solutions
The basic idea is to get the houses in order, provide a good service at a reasonable price while keeping the cost cutting and increasing revenues in mind. Like the LIAT has taken onto itself to try and remedy whatever is not up to the scratch. The members of the board and the CEO have come up with a business plan that has been presented to the shareholders. There are plans to invest so that the aging fleet of air busses can be replaced. It is also trying to attract more investment from potential shareholders while keeping intact the ones on board. The tax structure is being studied for whatever reduction is possible to keep both the infrastructure and airlines happy. Marketing of the airline services are being considered.
The recommendations are that CARICOM heads meet in early 2013 to discuss the matter at hand. The focus of matter should be on how to improve the existing services to ganer more profits in the long run.