ST. VINCENT (Jan. 17):- LIAT shareholder Prime Minister Dr. Ralph Gonsalves of St. Vincent and the Grenadines, says he welcomes competition to the airline but has not received an application from Caribbean Airlines (CAL) to fly to St. Vincent.
He further anticipated and responded to suggestions that he is trying to protect LIAT, into which his government has invested heavily since coming to office in 2001.
“Please, believe me, if there is a level playing field, I have no problem,” he said on Monday at a press conference in Kingstown.
Gonsalves further said that his “problem” late last year with the aviation minister in St. Lucia regarding CARICOM Airways “had nothing to do with protecting LIAT” but pertained to CARICOM Airways having the requisite licenses from regional aviation authorities.
Regional media reports have said that CAL, the national airline of Trinidad and Tobago was training its pilots to land at E.T. Joshua Airport in St. Vincent.
However, Gonsalves, who is also the nation’s Minister of Civil Aviation, said he had not received any document from CAL “saying they want to run a scheduled service here, which would be the normal thing”.
“Nobody has written to me. I haven’t seen a letter from CAL so I don’t know what airline, how frequent they want to come. I know that the last occasion there was a talk between LIAT and CAL about possible co-operation, a possible nexus. There are all sorts of things. I know that [former Prime Minister of Trinidad and Tobago Patrick Manning] has a very keen interest in this matter but he is no longer prime minister,” Gonsalves said.
He said he also did not know whether CAL wants to have “a Caribbean-wide airline”, saying that fuel will be another issue.
Gonsalves said CAL’s fuel cost is subsidized by the government of Trinidad and Tobago when prices rise above US$50 per barrel.
“They call it a hedge but it’s a subsidy,” Gonsalves said, proposing that CAL can fly between Trinidad and Jamaica, London, New York, “where there is no other [Caribbean Community] airline running”.
“But, are you going to compete with LIAT with your fuel subsidy? That is impermissible under the CARICOM rules,” he said.
“I am not seeking to protect LIAT because I’d be happy to see a bigger airlift for St. Vincent and the Grenadines if we have more passengers coming out. But if CAL is allowed to come to St. Vincent, go to other places in the Caribbean where LIAT runs, and, especially to take what you may call the more lucrative end of the market — St. Vincent, Grenada, Barbados, St. Lucia, down to Trinidad — and they were to put in enough planes, and they get a 50 per cent subsidy on fuel, which is a major operating cost, and you take LIAT out of the skies and then after that, the government of Trinidad and Tobago decides they are going to cut the routes … what’s gonna happen?” he said.
“It’s a complicated business. I think I have raised enough questions here for you to see what this matter is about,” Gonsalves said.
“I have no problem at all with LIAT getting competition — none whatsoever. And I will say I have no problem with CAL coming in to St. Vincent and the Grenadines but I’d want to know which routes they are going to fly, whether they are going to have 50 per cent fuel subsidy – they call it a hedge. … They use the word hedge to mask it for popular consumption but it is a subsidy and there are regulations in relations to subsidies within the CARICOM market, Gonsalves said.
“So, I would want to know all of those things and I would want to know all the satisfaction is done in relation to ECCAA [the Eastern Caribbean Civil Aviation Authority] and so on and so forth. But to get those things done, you have to come to the minister of aviation or if don’t come to the minister of aviation, you certainly write the air transport and licensing board,” he added.