Vincentian carrier SVG Air will effective today, Feb. 1, increase its fares to the Grenadines, Paul Gravel, the company’s managing director has told iWitness News.
Gravel said his company can no longer afford to offer the current rates, in the face of a 400% increase in operations cost.
At the same time, the airline is charging fees that are 30% of what St. Maarten-based carrier Winair — which uses the same aircraft type on its routes — charges for similar distances.
SVG Air passengers travelling from St. Vincent to either Canouan or Union Island will be asked to pay an additional EC$15 one-way.
Gravel told iWitness News that the increase is but a fraction of what it should be, but his company is mindful of passengers’ economic circumstances.
“In fact, we really have to put the rates up by about US$25 per ticket minimum but I don’t dare because nobody can afford to fly. I don’t want to hurt the people, but I don’t want to go out of business either,” Gravel said.
“It is a real catch-22 and the government, they have no insight because the less people fly, the less commerce in all the islands and what money they collect at the airport is one-tenth of what they are going to lose is intraregional travel and commerce stops.”
He noted that in 2019, regional governments gave LIAT US$16 million to keep them in business.
“Why were LIAT’s flights so poorly attended? Because the ticket price was 80% tax now,” Gravel said.
“I have been going to town on this for years because every fall, some government comes out with a new fee.”
He said that his airline had stopped flying to St. Lucia because Castries imposed a further levy of US$37.5 on their tickets.
“We used to do daily services from St. Vincent and the Grenadines to St. Lucia. People can’t afford the ticket so we have to increase the fares.”
On Oct. 1, 2019, Gravel wrote the government outlining a case for an increase in fares but has received no response.
The letter said that 16 years ago, when SVG Air started using 19-seat aircraft to provide inter-Grenadine service, the lease on those aircraft was US$18,000 per month; it is now US$35,000.
The security deposit, which was US$20,000, is now US$225,000. And whereas there was no wing reserve requirement, that is now US$600,000.
The letter said that the no landing gear reserve is now US$120,000.
“Needless to say, the airport landing, handling and Nav com fees were 400% less,” the letter said.
The letter further stated that over the last two years, regional governments have “drastically increased and invented new taxes and airport fees in an effort to turn airports into profit centres”.
The letter said that this has had a massive effect on all regional and international carriers, and, in the case of SVG AIR, its core business — “the wealthy holidaymakers keep us in business, without them we are not viable”.
The letter continued: “So by increasing the taxes on use of the airport, i.e. Barbados, Antigua, Grenada and St. Lucia, we have less visitors, less commerce inter-regionally and the airports will become less viable.
“Historically, the income generated by these same customers have cross-subsidised the local traffic for many years; without them, the price to fly from the mainland to the Grenadines will be three times higher.”
The letter further said that engineers and pilots have many options in the Far East and their other major metropolitan countries to work for flag carriers, and hence the cost to attract and keep them in the Caribbean is now 100% greater that it was 16 years ago.
The company told the government that it was not trying to make a profit on domestic flights but was keen to ensure that it does not lose money.
“Therefore, we are seeing an increase of 20% in an effort to recover the cost of operating the shuttle flights.
“Without this, we will have to reduce these flights to just selling seats on positioning flights.
“This will be once per day and with only three days advance booking window and only when we don’t have the higher yielding seats sold.”
The company asked the government for an opportunity to discuss the proposal.
It further said that Argyle International Airport “has increased the cost of maintenance by several hundred thousand USD per year in corrosion damage as well as hangar land rents.
“We will agree it is a safer airport, but it has come at a great cost to the local carriers, which can be seen by the millions of dollars invested in the three new maintenance facilities, an investment that is forfeited at the end of the 20-year lease term.”
The letter said:
“These costs have to somehow be incorporated into our prices and up to now they have not been. We will be seeking initially a 20% price increase; we are not sure that this will be enough, but it will be a start.”
Most of the individuals who heads up governments here in the Caribbean have schooled themselves in 1960’s Marxist dogmas. They only understand Cuban-Marxism and which imposes nothing but high Taxes on their people to cover for their own gross incompetence and the failed Marxist ideology that they are so apt to follow.
A ticket price at 80% tax is clearly a recipe for failure, heaping even more disastrous poverty on an already poverty stricken region.
These money grabbing, don’t caring, dunce governments in the Caribbean will kill regional travel. Why they have so much taxes on tickets is only because they are lazy and unimaginative. It’s so easy to just tax tickets than to come up with creative ideas. The beer companies come up with a three- for- ten system to make money and that is what’s needed in the airlines industry. Make tickets cheaper and more persons will fly but these know- it- all politicians too bright to see it. The just like the man who killed the goose that lays the golden eggs.
SO TRUE.THEIR ADVISERS NOT ADVISING THEM CORRECT AND GOVERNMENTS DON’T CARE A DAMN .IT MUST HAVE A BACKHAND FOR THEM TO CARE
Soo sad. The people of the grenadines are forever grateful for this service and the fact that the government didn’t even offer you the courtesy of responding to the letter sent to them, that says a lot. I hope the purpose is not to run you out of business so they can bring in someone else.
What’s is the full cost from main land to Canouan?
One way
Whats the full cost.
I used to fly to Barbados at least twice a month and also Saint Lucia. My friends used to visit SVG on a regular basis from other islands states. All of that stopped with the unaffordable ticket prices caused by continually expanding government addon’s and taxes. The islands have become insular from each other to a greater degree than at any previous time in history.
There isn’t even a decent ferry service between other state islands.
The backwardness emanates from the regions socialist leaders like Ralph Gonsalves.
Overtaxing everyone and underpaying government employees. Making silly promises that cannot be kept because the high taxes have resulted in less revenue. SVG under the current administration has become a nation of slaves once more, looking to the master for handouts because about 50% of the workforce is unemployed.
Decaying and unkempt infrastructure, even buildings built during the last 18 years falling apart in need of painting and some covered in black mould. Rats run riot and people are continually falling ill with rat born diseases, we should be fearful of the school kids getting the black plague, from which there is little cure. Raw sewage pumped into the sea and hundreds of vehicle tyres burnt by government departments. Roads being undermined because small holes are allowed to become big holes and water gets under the roads and destroys the base materials.
Everything that is wrong can be simply put right by proper maintenance schedules. But everything is allowed to degenerate to a state where it become unrepairable and then requires replacing.
Then this man who would be emperor claims that he and his government are progressive, they are not they are regressive. I suppose it must be obvious what we are dealing with when we see his support for states like Cuba and Venezuela.
We must try and rid ourselves from the clutches of he and his family dynasty, we cannot afford him or them.
This is when the government has to get involved. It is a national carrier and, an important service. McKee and Gonsalves, the minister of transportation, communication executives all sleeping on the job after all. They saving their money for elections […], thats why this is happening this way. Can ordinary people buy into your company?
WE Vincentians need to understand and get this in our THICK SKULLS!!!
This Government does NOT CARE about US BLACK PEOPLE!!!
But we are the same ones who vote them ‘ again and again!’
The Prime Minister said this before, ask Dougie, ‘ he does not like black people. he only entertain you for your votes. YOU are ‘voting cattles!’
So stop complaining and wait for the next general elections to make your point. We can talk from now until… they DO NOT CARE!!!!