EDITORIAL: Flying by the seat of our pants

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The high cost of regional travel has been a major impediment to greater integration and just normal movement.  The cussin’ starts as soon as someone begins to look at booking a ticket on LIAT and intensifies when they actually see or hear the price.  LIAT defends itself by saying that its fares are competitive and in line with industry standards, but points to the high government taxes as pushing up the overall fare to consumers.  
To get some reference, we picked a random destination (Guyana) on a random date (June 2018) for a one-week stay.  The cheapest
fare for a return ticket, according to the liat.com website, was US$665.50.  The outbound portion from Antigua to Guyana was US$315.25 while the return to Antigua was US$350.25.  The outbound fare broke down to a fare of US$230.00 plus US$85.25 in “taxes and fees.”  The return fare was the same US$230 but the taxes and fees were US$35 more, totaling $120.25. 
The difference had us intrigued, so we looked into the breakdown even further.  On the outbound segment to Guyana, there was an “ANU Airport Admin Charge” of US$37.50, a “Fuel Surcharge” of US$7.25, a Security Surcharge” of US$2.50, a “Service Fee” of US$15.00, and “ANU Ticket Tax” of $23.00.  On the return, these taxes reappeared but there was also a “GEO Passenger Facilitation Charge of US$18.00, and a “GEO Travel Tax” of US$17.00. Those two line items made up the US$35 difference between the outbound and return segments.  Whew! 
Interestingly enough, if you keep the dates the same but begin the round trip from Guyana, the fare drops to US$585.00.  Fares are US$185 for both legs of travel and taxes were US$125 from Guyana to Antigua and US$90 from Antigua to Guyana.  At this point, we hope you are still with us and not nodding off with all this math.  
We did that preamble because the Organisation of Eastern Caribbean States (OECS) says it has presented a proposal to sub-regional governments on the question of the high taxes associated with intra-Caribbean travel.  It has been reported that
between 2009 and 2016, government taxes have more than doubled in some instances.  The proposal was made against the backdrop of the Caribsky initiative which sees LIAT, the French-owned Air Antilles and the state-owned Sint Maarten-based Winair create a network to deliver greater interconnectivity.  
There is a widely held notion that over 50 percent of regional airfares are in the form of government taxes but that is not borne out by our random samples.  Maybe it will be if one takes an exhaustive look at every fare published by LIAT, but at this point it seems to be less than 40 percent.  Still high, but not the ‘more than 50 percent’ being bandied about!
According to LIAT’s chief executive officer, Julie Reifer-Jones, the management review has indicated “there has been this significant decline” and “airport, as well as taxes directly from government, are significant deterrents to travel within the region.”  She added, “we all have to try to influence our governments to make a commitment to the region because that’s what this conversation is about, and to put some measures in place that would help to stimulate that intra-regional travel because when it happens, there will be economic growth and we will all benefit.”
On that point, we will re-ask some of the questions that we have asked before, with the hope that we will get answers to our simplistic logic.  If lower taxes will stimulate intra-regional travel and have a material impact on the financial viability of LIAT and the other Caribbean airlines, why not give the tax relief instead of having to dig into taxpayers’ pockets to make up the shortfall for LIAT?  What is the monetary difference between what is remitted by LIAT versus what the governments pump into LIAT?  And, if the tax relief is across the board, then it will mean that the travel stimulus is spread across all of LIAT’s destinations and the burden will not fall upon the few nations that currently support LIAT.
Maybe we are being too simplistic about this whole thing but to our mind, if LIAT needs to offer cheaper fares in order to survive, and the taxes are pinpointed as the major hurdle, then that seems like it should be the focus of the cuts (as a first step).   As well, if cheaper fares are necessary to boost regional travel, which will in turn aid economic growth, then the taxes again come into focus.  It comes down to assessing what each country currently gets via these taxes versus the
potential increase in regional travel and the associated boost to the various economies.  If it is more complex than that then we welcome enlightenment, and we are sure that, there are others, more versed in airline management than us, who will be willing to comment.
We invite you to visit www.antiguaobserver.com and give us your feedback on our opinions.

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