A new low-cost airline has promised
the cheapest fares ever for the Caribbean.
“We will be offering routes with
fares as low as anywhere in the world, starting at US$9.99,” said Ian Burns,
chief executive officer of start-up airline AirOne.
It was a statement that caused
uproar amongst assembled delegates at the Caribbean Tourism Organisation’s
Leadership Strategy Conference as did Mr. Burns’ assurances that fares in
general would be 60 per cent lower than current prices in the Caribbean market.
Earlier, it had been pointed out
that the Caribbean region had seen 30 low-cost or intra-regional carriers fail
during the last thirty years.
Mr. Burns noted that it had been a
four-year project so far but that the recession had actually created good
conditions for the start-up as all costs had been reduced. These included the
aircraft themselves, maintenance, fuel and human resources.
So far the airline has acquired two
aircraft and was putting a crew structure in place, in anticipation of getting
their licenses to operate out of Barbados. There was conditional approval from
Haiti and Guyana to operate direct services already, said the Irishman.
The model will be based on cheap
carriers such as Ryanair, the most profitable and successful low-cost airline
anywhere in the world.
He explained that services would be
unbundled, and that the fare charged by the airline would be for travel only.
“We will charge you for everything.
“There will be no expensive
business lounges; you pay for what you get. The passenger determines his own
service – we are an opt-in service,” he said.
Things that would be charged for
would include carry-on baggage, beverages, fast boarding passes and other
elements. The fares would only start at under $10, and that would be each way,
he said, adding that this did not include airport fees and any other taxes
implemented by destinations.
He said that the Caribbean was
unusual as it featured a high percentage of international airports in smaller
locations. High costs lowered demand, he said. There was also too much reliance
on the tax payer and regulation was too high. He called for an integrated body
to regulate Caribbean air travel and said that destinations over-building were
a real threat to demand.
“AirOne will resist air charges for
capital developments,” he said, adding that building world-class facilities
would add unnecessary charges to air fares.
Mr. Burns drew on statistics that
said that there had been a 25 per cent fall in intra-regional tourism between
2005 and 2009. This equated to $200 million of lost revenue. At the same time,
fares and costs had both doubled, making the Caribbean the only global region
to decline in regional air travel. He noted that to reach 60 per cent
occupancy, every 1,000 hotel rooms required an airlift capacity of 170,000 at a
70 per cent load factor to operate.
The Caribbean was dependent
on both aviation and telecommunications, he explained, but whilst the latter
had developed and costs had therefore fallen aviation had not followed suit.
The region lost out because less travel meant there was less trade, less
tourism, less investment and less development.