While every re­gion­al gov­ern­ment over the years has clam­oured for more in­ter­na­tion­al con­nec­tiv­i­ty, Pe­ter Cer­da, re­gion­al vice pres­i­dent of the In­ter­na­tion­al Air Trans­port As­so­ci­a­tion (IA­TA) be­lieves bet­ter di­a­logue is need­ed on this is­sue. 

In a one-on-one in­ter­view with the Sun­day Busi­ness Guardian at the CA­PA Cen­tre for Avi­a­tion Air­lines Sum­mit, which was held at the Hy­att Re­gency last week, Cer­da ex­plained that it’s not that easy to start a new route, par­tic­u­lar­ly with the chal­lenges the in­dus­try is fac­ing, such as lack of man­pow­er and air­craft. 

He said air­lines are very se­lec­tive in terms of open­ing new routes or in­creas­ing ca­pac­i­ty. 

“So we need bet­ter di­a­logue with gov­ern­ments in terms of why it will be ben­e­fi­cial, why it’s fi­nan­cial­ly vi­able to op­er­ate to a new des­ti­na­tion. And with 

that, that’s where we need that col­lab­o­ra­tive ap­proach.” 

He lament­ed that many gov­ern­ments would talk about the need for more con­nec­tiv­i­ty, but they’re al­so in­creas­ing tax­a­tion on trav­el and tourism, which is very con­tra­dic­to­ry.

“You want tourism to in­crease, you want more flights, but at the same time, you’re tak­ing ad­van­tage of that favourable po­si­tion or sit­u­a­tion to in­crease tax­a­tion. And that is dis­cour­ag­ing more peo­ple from com­ing for trav­el and tourism, par­tic­u­lar­ly in an age where con­sumers have the in­ter­net to search for the best des­ti­na­tion, the best ex­pe­ri­ence at the best price,” the re­gion­al vice pres­i­dent em­pha­sised. 

It’s about es­tab­lish­ing a clear­er frame­work and bet­ter strat­e­gy, he said as IA­TA wants the in­dus­try to win, to be suc­cess­ful in new mar­kets, and for the coun­tries to be suc­cess­ful. 

“We want to con­tribute to eco­nom­ic de­vel­op­ment. We want  to con­tribute to bet­ter so­cial con­di­tions in the coun­try, along with the Gross Do­mes­tic Prod­uct (GDP) to in­crease, but there has to be a bal­anced ap­proach in how we go about that,” Cer­da un­der­scored. 

Ques­tioned as to why he be­lieved the in­dus­try is so heav­i­ly taxed, Cer­da said that the sec­tor is an easy one to tax. 

“When you look at the Caribbean, per se, the on­ly way to get to the is­lands is by air. There are no roads, the mar­itime in­fra­struc­ture is not set up, and so air trav­el be­comes the most vi­able way to get to the is­lands. So it’s an easy way for the  gov­ern­ment to say, well, they have to get to the is­lands, they’re go­ing to have to come by air. 

“In some cas­es, the tick­et tax or the tax im­posed on the tick­et is 60 per cent, 70 per cent, 80 per cent high­er than the ac­tu­al tick­et it­self to trav­el from point A to point B. And that’s where we have to change. You can’t have it in to­day’s mar­ket where the tax is more ex­pen­sive than the ac­tu­al air­fare, It’s no longer a lux­u­ry. 

It be­comes a way of move­ment in which you can stim­u­late more  busi­ness, more op­por­tu­ni­ties for growth, more op­por­tu­ni­ties for fam­i­ly and friends to vis­it.” he out­lined. 

Cer­da said the IA­TA wants a trans­par­ent and col­lab­o­ra­tive re­la­tion­ship with re­gion­al gov­ern­ments, as he said this is crit­i­cal. 

Re­cov­ery of air­lines 

Speak­ing to Sun­day Busi­ness Guardian about the re­cov­ery of the air­lines, af­ter the pas­sage of COVID-19, Lori Ran­son, se­nior an­a­lyst Amer­i­c­as for CA­PA Cen­tre for Avi­a­tion, said the avi­a­tion in­dus­try is pro­gress­ing, par­tic­u­lar­ly in the Caribbean and there are a lot of op­por­tu­ni­ties and some new ones as well for longer haul routes. 

“Air­lines, in­clud­ing in Latin Amer­i­ca and the Caribbean are work­ing to strength­en their cus­tomer prod­uct. I think that it is a big pri­or­i­ty for air­lines to build up con­nec­tiv­i­ty, es­pe­cial­ly in the Caribbean, but chal­lenges would come with that,” she said. 

In terms of air­lines be­ing prof­itable, Ran­son said some re­gions would be prof­itable, while some wouldn’t. 
“Gen­er­al­ly, every­one is on a good tra­jec­to­ry af­ter COVID, and in terms of prof­its, some re­gions are slow­er to re­cov­er than oth­ers.” 

On the is­sue of tax­es, she said the in­dus­try has been fac­ing these high tax­es for sev­er­al years. 

“I hope that work is go­ing on be­hind the scenes to ease some of those chal­lenges and look for ra­tio­nal so­lu­tions,” Ran­son added. 

Fi­nan­cial per­for­mance  

As it per­tains to rev­enue earn­ings, Jose Freig, vice pres­i­dent of op­er­a­tions at Amer­i­can Air­lines (AA), said last month the com­pa­ny an­nounced its sec­ond quar­ter rev­enue of 

US$14.9 bil­lion, which is AA’s high­est-ever quar­ter­ly rev­enue. 

Freig said look­ing at the prof­itabil­i­ty per­spec­tive, AA’s re­cov­ery has been very strong, es­pe­cial­ly in the Caribbean. 

Asked whether AA was look­ing to ex­pand in new mar­kets, Freig quick­ly said “yes” and that AA is the on­ly US air­line that can fly to Ocho Rios, Ja­maica, Tor­to­la, and the British Is­lands. 

“Next year, we’re open­ing the brand-new air­port in South Caicos in Feb­ru­ary, and, of course, places like Ti­jua­na, Mex­i­co. Those are all just very unique des­ti­na­tions. 

“Then, when you think about long-haul fly­ing, this year we opened up Copen­hagen, Nice, and Naples. Al­so, in Oc­to­ber we’re open­ing up Dal­las to Bris­bane, Aus­tralia.  So, look, those  are just ex­am­ples of how we con­tin­ue to look for op­por­tu­ni­ties to grow around the globe,” he dis­closed. 

Ques­tioned on whether the air­line wants to in­crease flights to Trinidad, the vice pres­i­dent of op­er­a­tions said “No not at this time.” 

“So, as we look at our de­mand, again, it’s based on cus­tomer de­mand.  We’re cer­tain­ly very pleased with what we’re op­er­at­ing.  The air­line does three flights dur­ing the peak sea­son, which is, of course,  some­thing that we al­ways look at as op­por­tu­ni­ties of where we can grow and some­times, that’s sea­son­al. 

“At this point, we’re not look­ing at grow­ing flights nec­es­sar­i­ly, but we are very proud, of course, of our reser­va­tions and con­tact cen­tre in Trindi­ad that hous­es over 430 team mem­bers for Amer­i­can Air­lines.  We’re very proud of our tick­et sales of­fice as we are the on­ly US air­line that has that as well,” Freig boast­ed. 

Speak­ing about the tax­es the air­lines face, Freig said, “De­pend­ing on what part of the world you are,  those are just part of what po­ten­tial­ly is there and the cost of op­er­at­ing in some places. That’s an  op­por­tu­ni­ty for all of us to work col­lec­tive­ly with gov­ern­ments and to work with IA­TA and many oth­er or­gan­i­sa­tions that help. We man­age through that. But the re­al­i­ty is, from our per­spec­tive, there’s a cus­tomer de­mand to fly there.  We’ll con­tin­ue to be com­mit­ted to that  mar­ket.  

Amer­i­can Air­lines ser­vices over 50 coun­tries.