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Carib airlines should merge
BWEE has been bailed out several times
A regional aviation expert has said the best option for the Caribbean's airlines to become viable is for them to merge.
Jamaican-born John Paul Clarke, a lecturer in aeronautics at Massachusetts Institute of Technology said the region needs to start thinking of itself as an entity and embrace the benefits that can be derived from such a move.
His comments come as Trinidad and Tobago's national carrier BWIA was given a cash injection in the form of a $37million structured loan to remain flying until June.
"I think we need one carrier and I think the issue really is a matter of economies of scale," he said.
"In the airline business you have to pay the bankers at the end of the month for your planes and quite frankly, if the airlines sit on the ground, that means they're not gaining revenue and one of the things about airlines, is that you have to design schedules that maximise utilisation of the aircraft."
The point of it is that if you have one airline, and you manage that airline - get rid of excess resources, duplication for example - then you can actually bring the house in order because again, it’s the costs that drive you
John Paul Clarke
Clarke, who has been an adviser to Air Jamaica in the past, told BBC Caribbean Radio one of the factors holding back Caribbean airlines is financing.
"As a Caribbean airline, you have to pay more to get your airplanes, not that the airplanes cost more it's just that the financing costs more because you're perceived as a higher risk so what we need is one airline and the second thing we need is good financing."
Proper management
The MIT lecturer said it is possible for the region's three main airlines to merge successfully despite the fact they are all experiencing financial difficulties.
"The point of it is that if you have one airline, and you manage that airline - get rid of excess resources, duplication for example - then you can actually bring the house in order because again, it’s the costs that drive you.
"Revenue is set by whatever the marketplace is willing to pay and what you need in an airline is to have it so that you have schedules coordinated, you're utilising your aircraft as much as possible and you squeeze out as much of the excess as you need you can get an entity that's viable," he said.
He stressed that the region needed to use the advantages gained by the CSME and the opportunities provided by the 2007 Cricket World Cup to work towards having a regional carrier.
"At some point, we as the region has to start thinking of the region as a business, as an entity and I think the CSME combined with the World Cup in 2007, combined with the realisation by many hoteliers that the region as an entity is what needs to be marketed could if wise heads prevail provide the impetus for a truly regional commercial entity," he said.
The Trinidad and Tobago government has appointed a six man team to examine the needs of Trinidad and Tobago's air transport industry and determine if the country needs a State-owned airline or whether other international airlines could fill the demand.
Among the options being considered are replacing BWIA with a new privately owned airline, closing down the airline or restructuring the company which experts say that is the preferred option.
BBC
BWEE has been bailed out several times
A regional aviation expert has said the best option for the Caribbean's airlines to become viable is for them to merge.
Jamaican-born John Paul Clarke, a lecturer in aeronautics at Massachusetts Institute of Technology said the region needs to start thinking of itself as an entity and embrace the benefits that can be derived from such a move.
His comments come as Trinidad and Tobago's national carrier BWIA was given a cash injection in the form of a $37million structured loan to remain flying until June.
"I think we need one carrier and I think the issue really is a matter of economies of scale," he said.
"In the airline business you have to pay the bankers at the end of the month for your planes and quite frankly, if the airlines sit on the ground, that means they're not gaining revenue and one of the things about airlines, is that you have to design schedules that maximise utilisation of the aircraft."
The point of it is that if you have one airline, and you manage that airline - get rid of excess resources, duplication for example - then you can actually bring the house in order because again, it’s the costs that drive you
John Paul Clarke
Clarke, who has been an adviser to Air Jamaica in the past, told BBC Caribbean Radio one of the factors holding back Caribbean airlines is financing.
"As a Caribbean airline, you have to pay more to get your airplanes, not that the airplanes cost more it's just that the financing costs more because you're perceived as a higher risk so what we need is one airline and the second thing we need is good financing."
Proper management
The MIT lecturer said it is possible for the region's three main airlines to merge successfully despite the fact they are all experiencing financial difficulties.
"The point of it is that if you have one airline, and you manage that airline - get rid of excess resources, duplication for example - then you can actually bring the house in order because again, it’s the costs that drive you.
"Revenue is set by whatever the marketplace is willing to pay and what you need in an airline is to have it so that you have schedules coordinated, you're utilising your aircraft as much as possible and you squeeze out as much of the excess as you need you can get an entity that's viable," he said.
He stressed that the region needed to use the advantages gained by the CSME and the opportunities provided by the 2007 Cricket World Cup to work towards having a regional carrier.
"At some point, we as the region has to start thinking of the region as a business, as an entity and I think the CSME combined with the World Cup in 2007, combined with the realisation by many hoteliers that the region as an entity is what needs to be marketed could if wise heads prevail provide the impetus for a truly regional commercial entity," he said.
The Trinidad and Tobago government has appointed a six man team to examine the needs of Trinidad and Tobago's air transport industry and determine if the country needs a State-owned airline or whether other international airlines could fill the demand.
Among the options being considered are replacing BWIA with a new privately owned airline, closing down the airline or restructuring the company which experts say that is the preferred option.
BBC
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