'Airlines under pressure'
Travel official blasts regional gov'ts for high operating fees

Janet Silvera, Hospitality Jamaica Coordinator

'Akin to almost extortion' was how regional director of the International Air Transport Association (IATA), Humberto Rivero, described the high operating fees being charged by the region's governments.

Lambasting Caribbean leaders unrepentantly, the veteran travel and tourism official said airlines operating here were being milked like cows.

"The governments don't understand the fundamentals of the airline industry, and treat us like cash cows to tax," he stated, while addressing delegates at the Caribbean Tourism Conference (CTC-29) in Freeport, Bahamas, last Monday.

He said that without effective economic regulations and with continued micromanagement, Caribbean governments would price themselves out of the market. "A market that currently employs hundreds of people."

According to Rivero, Caribbean countries were charging a hefty US$150 million annually in Air Traffic Control (ATC) charges in comparison to the US$78 million that the North Atlantic has levied.

privatisation blamed

"There is something extremely wrong with this equation. Taxes are the biggest issue confronting the airline industry. There are fuel taxes, landing fees, taxes for travellers and airline taxes which all need to be taken into consideration."

He blamed privatisation of the many airports in the region as the reason for the high costs. "Regional governments are privatising the airports only for the reasons of making easy money." A cost he stressed which will ultimately be passed on to the consumer.

Among his concerns were airport privatisations that garner revenue, from which he said 40 per cent go into sectors, which have nothing to do with the travel and tourism.

And investors who win bids for airport privatisation are no better, because as soon as they realise the high operating costs, they are the ones to further tax the airline sector.

gov'ts react

The IATA official also blamed governments for displacing the travel agents when airlines resort to online booking, thereby avoiding having to pay commission fees to the agents.

Rivero's stinging comments were refuted by a number of government officials, including Grenada's Minister of Tourism and Aviation, Brenda Hood, who revealed that her country had paid millions to airlines to operate in her country over the years.

"We waive the landing fees, and all other types of fees to have the airlines come into our country, and airlines have been known to pull their services, when government ceased to pay them to operate."

In support of the governments, Carolle Guntley, Jamaica's director general, said governments could not all be blamed for the high operating costs of airlines, "A lot of the high cost is imposed from the outside," she said.