20th October 2023
Tensions are rising in the regional aviation sector after Caribbean Airlines (CAL) announced that it is moving to significantly expand its operation in the Caribbean.
The Antigua and Barbuda Government has declared its intention to oppose CAL’s expansion, specifically on routes previously serviced by LIAT (1974) as the Gaston Browne Administration continues efforts to revitalise the airline.
LIAT (1974) is owned by the governments of Antigua and Barbuda, Barbados, Dominica and St Vincent and the Grenadines. In July 2020, it initiated an administration process due to mounting debt and the repercussions of the COVID-19 pandemic.
In his 2023/2024 National Budget Address, Trinidadian Finance Minister Colm Imbert announced that the state-owned airline plans to lease 12 new passenger aircraft to respond to increasing demand across the region given the exit of LIAT.
“The airline thus intends to expand its fleet to meet this growing demand through the lease of four additional ATRs and three additional B 737-8s… CAL also plans to lease five Embraer E-175 regional jets to service the intra-regional demand and to establish bases and hubs across the region to promote efficiency and cost-reducing measures,” said Imbert.
In April 2023, CAL filed an application to the US Department of Transportation to operate under the Air Transport Agreement between the US and Trinidad and Tobago specifically referencing Puerto Rico and the US Virgin Islands, routes formerly serviced by LIAT from its Antigua base.
According to the application’s operational forecast, CAL aimed to serve 5,339 passengers traveling to and from Puerto Rico, generating an estimated revenue of US$0.69mn in 2023 had the service commenced as planned, and 21,356 passengers in 2024, raising US$2.8mn in revenue.
In response to repeated criticisms about the lack of a proper regional air cargo network, CAL is also moving to expand its cargo services, aiming to lease two ATRs and two B 737-800s to grow its cargo operations.
Antigua and Barbuda’s government has taken exception to CAL’s announcement, stating that it threatens the role LIAT played in inter-regional travel as the country works with international Nigerian carrier, Air Peace to save the significantly down-sized carrier.
“We have been working with Air Peace with the expectation that it will bring capital, expertise and of course a great deal of interest in ensuring that our LIAT survives and we believe that it is a better notion, a better approach than the plans announced by CAL through a parliamentarian in Trinidad and Tobago,” said Lionel Hurst, Chief of Staff to Prime Minister Browne, in a post-cabinet news briefing.
Hurst said that CAL’s proposed expansion makes it clear that the revival of LIAT, which is intended to take off by the 2023 winter season, is not an objective of Trinidad, whose leaders are determined to capture the aviation services his country once exported.
“CAL essentially intends to take from Antigua and Barbuda the aviation services that we have been providing by way of LIAT for more than 60 years. So, we are going to continue to fight this approach of trying to take from Antigua and Barbuda the important role which LIAT did in not only providing service to inter regional travel in the Caribbean, but more importantly for Antigua and Barbuda all those jobs, more than 600 jobs,” argued the Chief of Staff.
While Antigua and Barbuda takes aim at Caribbean Airlines, InterCaribbean Airways, another carrier seeking to fill the void left by LIAT continues its expansion in the regional market.
In recent months, the Turks and Caicos based airline has done some expansion of its own. In June, InterCaribbean added an additional seven ATR-42s bringing its ATR fleet to 10 aircraft. In September 2023, a Bombardier CRJ700 with seating for 70 passengers was introduced into service. The airline said that it plans to retire its Embraer 120 aircraft by the end of 2023, replacing them with these newer and larger airplanes to cater to the growing regional demand.
The airline is also bringing its subsidiary company Flight Support to its new Southern Caribbean hub in Barbados to provide above – and below-wing support by its own staff in a bid to end the practice of outsourcing. “We are thrilled to be able to manage our full operations in Barbados finally,” said Chairman Lyndon Gardiner.
While these recent developments in the Caribbean aviation space have largely been welcomed by governments and consumers, the carriers have yet to reach the level of connectivity offered by LIAT pre-pandemic. Moreover, ticket prices, and government taxes, charges and fees remain prohibitive.
This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.
