By Carl Joseph
At a recent meeting of LIAT (1974) Ltd’s shareholder governments, it was agreed that it would be necessary to further delay to the 2018 recommendation by the Caribbean Development Bank (CDB) to lower ticket fares of the cash-strapped regional carrier by 25 percent.
The 2018 CDB study “assumes that lower taxes and charges will lead to cheaper airfares, and stimulate passenger demand”.
Attending the recent meeting, Prime Minister Gaston Browne said that, “the CDB would have a done a report confirming that [there is a relationship between] demand for travel and price… [and] that there is some elasticity. So, if we could reduce the price by about, maybe, 25 percent, that may probably increase air travel by about 10 percent and then [LIAT] would probably break even.”
Browne said, however, “the problem is whether or not we have the fiscal space to give up 25 percent of that revenue”.
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