New airline flies into strong headwinds from some governments

Airline officials said they have also applied to the U.S. National Transportation Safety Board for permission to service the Barbados-U.S. route and are awaiting a response.

From the very beginning, REDjet set fares at a level to undercut those of the two other major regional carriers, LIAT Airlines and Caribbean Airlines. Shareholder governments of LIAT are Antigua and Barbuda, St. Vincent and the Grenadines, and Barbados. The government of Trinidad and Tobago owns more than 90 percent of Caribbean Airlines shares.

REDJET began operations in early May, offering $9.99 fares between Barbados and Guyana. Those fares have since been increased but still fall well below those of the competition.

Given the difficulties with other target countries, it has to date carried passengers only between Barbados and Guyana, with both governments hailing REDjet’s presence as a positive development in the process of regional integration that would stimulate increased travel within the Caribbean.

However, bureaucratic encumbrances in Trinidad and Tobago and Jamaica have blocked the airline’s plans for wider service. Barbados deemed the delaying tactics contrary to both the spirit and the letter of the charter of the Caribbean Community (CARICOM) and discrimination in favor of domestic interests.

The REDjet dispute among Caribbean governments over airspace, landing rights and other aviation matters has generated concern about the serious obstacles still in the path to stable community in the region. And while governments continue to squabble over the crumbs of regional airlift, it is the long-established U.S., British and Canadian airlines that still pick off the plums of the regional market where a tourism sector dependent on non-regional arrivals remains the bulwark of most of the economies.

Squabbling in the region over domestic air carriers is nothing new and there have been repeated failed attempts by individual countries to have their own airlines. Just about every country has had the experience of a national airline begun with great pomp and ceremony, struggling to operate and, in time, collapsing. Almost always they were strangled by escalating fuel prices and low passenger levels.

Guyana Airways’ regional and international service in time became a drag on the national purse and eventually disappeared from the scene. The Barbados government-owned Caribbean Airways suffered a similar fate. Air Jamaica struggled for years as the national flagship of that country, consuming scarce resources of both the island's government and the private sector until recently, when it was taken over by the government of Trinidad and Tobago and incorporated into Caribbean Airlines.

The twin-island state has shown itself the only territory in the grouping with the capacity to effectively operate an international airline, because, as a net oil exporter, it has the ability to carry the high costs.

Caribbean Star, based in St. John's in Antigua and Barbuda, took to the skies in 2000 with great fanfare, primed with resources from the now disgraced American financier Allen Stanford, operating the sleek twin-engine Bombardier Dash 8s. For a while, it presented a serious challenge to regional competitors, particularly LIAT, which plied the same route and used the British Avro 748s aircraft of similar size to those used by the new airline.

The Star's performance brought LIAT to the brink of collapse but the Stanford subsidy could not be sustained and Caribbean Star eventually folded — into the embrace of competitor LIAT which received an equity injection in 2007 and returned a small profit in 2008.

LIAT itself first operated as a regional adjunct of BOAC (later British Airways), then was heaved off to the British private sector company Court Line. When that company collapsed in 1974, it would have been a disaster for intra-Caribbean travel had LIAT, then known as Leeward Islands Air Transport, been allowed to go under also. That was when a number of Caribbean governments bought the airline with a loan from the Caribbean Development Bank (CDB) and it continued operating under the name LIAT (1974) Ltd.

In the years since, LIAT shareholder-governments have supported the airline with resources, in addition to obtaining more cash from the CDB to finance expansion and modernization, particularly the acquisition of new, better performing turbo-prop aircraft.

For West Indians, the most distressing experience in the region's airline saga was the demise of the 66-year-old BWIA, formerly British West Indian Airways — widely known as BEEWEE – which, for all the years it operated within the Caribbean and across the Atlantic, had never experienced a fatal crash, a record sustained despite the unique situation which developed in 1978, when, in a labor dispute, then Prime Minister Eric Williams of Trinidad and Tobago dismissed all the pilots who were on strike and recruited replacements.

As it turned out, the country's oil wealth was not enough to underwrite BWIA's perpetual substantial operating losses. The airline collapsed in 2006 and the government created the much smaller Caribbean Airlines as its successor, re-hiring just about one-third of BWIA's staff.

In the war of words since its inauguration, REDjet has argued that fares within the region are artificially inflated and that its entry and sharp price adjustments will bring its competitors to heel and benefit to the Caribbean traveler.  Time and fuel and other costs will prove whether that analysis is correct.

Photo by Redjet Airline Press photo