Air Canada Rouge on its inaugural arrival at AIA on Dec. 14, 2017. (iWN photo)

International carriers such as Air Canada Rouge that are flying passengers to St. Vincent and the Grenadines, are getting support from the Vincentian government, Prime Minister Ralph Gonsalves told the media on Tuesday, Jan. 2, 2018.

“I don’t have the actual numbers, but I could get the numbers,” Gonsalves, who is noted for his ability to recite numbers and other facts, said during his first press conference of the New Year.

“I don’t have the numbers with me but I could get those numbers and I don’t mind – and I am sure that the Minister of Finance will present those numbers to Parliament, but we could always get the numbers,” Gonsalves said.

The prime minister said that every international airport in the region provides market support for airlines, adding that some airports provide more support than others.

In a Budget consultation meeting with labour unions last month, Minister of Finance, Camillo Gonsalves, told union representatives that in 2017, there was a major change in the Transfer portion of government spending.

“We have the new airport, there were new monies that had to be spent in promotion, in advertising, in contracts with the airlines that we have coming and the like. So there was a spike in how much money we gave to the Tourism Authority consequent on the opening of the airport, “the minister said in the closed door meeting, a record of which was obtained by iWitness News.

On Dec. 14, 2017, Air Canada Rouge began making weekly non-stop flights between Toronto and Argyle International Airport, becoming the first international carrier to make regularly scheduled flights to the airport, which opened on Feb. 14, 2017.

The flights will continue until April 12, 2018 and the government is in negotiation with that airline and others to supply future service to the destination.

In announcing the service in May 2017, Air Canada said the flights would be “subject to government approval”, which some persons interpreted as meaning subject to market support from Kingstown.

https://www.youtube.com/watch?v=pVy0D6osKuw

The prime minister, who, until last November, was also Minister of Finance, told Tuesday’s press conference that he has seen a number that indicated that either in 2017 or 2016, Barbados provided BDS$36 million in market support.

“It is a form of marketing also,” he said, adding that Opposition Leader Godwin Friday had raised the issue in the Vincentian Parliament and expressed the hope that when the government does the charters he hopes they are entirely commercial.

“So I had to answer him and tell him that he really has no understanding about the airline business, that market support is to be provided and that market support is a form of advertising,” Gonsalves said.

The prime minister told the media that an airline flying to St. Vincent and the Grenadines is in itself a form of advertising, as the destination is also advertised.

He said he had made the point that within the first three or four years of the opening of Argyle International Airport his government would have to do a capitalisation of the airport itself.

“That is in addition to whatever market support you are giving to airlines,” he said.

Gonsalves said that there is a group of Vincentians, a company including pilots and business people who want to start “a small, locally-based 737 service from different places.”

Gonsalves said his government is waiting to support the group, adding that he was waiting for the final numbers.

“I understand that AIA has already given them space to put a hangar on the other (seaward) side,” Gonsalves said, adding that the Ministry of Works has to remove some items from the area which is being surveyed.

“And I support — I personally and the government because I have advocated that and the government has accepted my view on this that we will support this indigenous group. The terms of the support have not been finalised but we will provide support,” he told the media.

Gonsalves said that if the country is going to create wealth and jobs through tourism, the airport, which represents EC$400 million in debt, but valued in excess of EC$1 billion, “you have a formidable asset. And all the experts say that this asset has to be properly utilised.”

He said his government has already received US$30 million in debt relief, which has brought the amount owed down to EC$320 million.

By way of comparison, Gonsalves said that the government of Castries is going to incur debt of US$150 million to US$200 million to renovate that country’s international airport.

He further said that in Antigua, renovations there, including a new terminal building extending the runway and tarmac, cost US$100 million.

“The number is just mindboggling. I just can’t conceive of such a number for a limited piece of work, having been involved in this business for the years I have been involved in it and studying this thing.”

He said that the Canadian investors who are supposed to be building a hotel in Mt Wynne-Peter’s Hope and Dave Ames — whose company owns the failed Buccament Bay Resort – would not have considered investing in SVG if the international airport was not built.

3 replies on “Gov’t helping to pay for direct flights to Argyle (+ Video)”

  1. 1. Not all Caribbean countries are paying these subsidies — which have to be paid up front in full, with applicable refunds given at the end of the year — because their passenger load factor has exceeded the minimum required.

    2. The PM is not privy to all the contracts made by other countries with the airlines.

    3. The PM repeatedly criticizes those who he claims have overestimated either the costs or the debts of the airport while himself valuing a money-sucking AIA at the extraordinary value of one billion EC dollars. In fact, no one — not one private entity — would pay one cent for the airport because the debt repayment and operating costs would immediately bankrupt them.

    4. The value of the airport lies only in its social (convenience) value and its spin off economic impact on the rest of the economy based on the arrival of thousands of new tourist passengers who would not have come to St. Vincent save for the presence of nonstop overseas flights, something we have not yet seen and would never see enough of to ever balance the costs of building, maintaining, and operating the airport.

  2. How long would it take the people of svg to repay this money, and does anyone know how much it takes to run AiA for a Year ??.

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