The announced Virgin Atlantic Airways withdrawal from Saint Lucia continues to generate feedback from the opposition Saint Lucia Labour Party, most recently from Alva Baptiste, the party’s first deputy leader.
Although he did not chastise the government for refusing to accede to the airline’s request Baptiste nevertheless said that government should have established a framework for a more structured dialogue with all stakeholders in order to comprehend this potential loss and related ramifications, and proffer appropriate solutions.
Prior to Baptiste, Castries South parliamentarian Dr. Ernest Hilaire took up the subject which drew a response from Tourism Minister Dominic Fedee (See the August 6, 2019 issue of The VOICE to read Fedee’s response). Hilaire responded to Fedee, a discourse that delved into the amount of money Prime Minister Allen Chastanet was allotted when he was tourism minister under the Stephenson King led administration.
At this week’s meeting it was the turn of Baptiste who declined to comment directly on whether he felt government should have accepted Virgin Atlantic’s proposal of a government subsidy of US$2.5 million per year for three years. However the party’s first deputy leader noted after perusing the airline’s website if Virgin Atlantic had to continue operating the Saint Lucia – London route it would be in need of support and hence the reason it approached the Prime Minister and others for such a support.
“But it is not something you just say to Virgin, yes, I will give you US$2.5 million. I think we need to do the necessary analysis to arrive at a decision. Involve all the stakeholders to make a final determination as to how you respond to that situation. You do not walk into negotiations with an airline based on your gut feeling without analysis,” Baptiste said.
Referring to what he claimed are the realities in the airline industry Baptiste said such an industry is not a shop where beers are sold and if half a case is sold today then the other half could be sold tomorrow.
“It is not like that with the airline industry. If you have 400 seats and you sell 200 seats, once the aircraft moves from the UK to Saint Lucia you cannot sell the empty seats tomorrow. The reality in the airline industry is that its profitability is not like other industries. Its marginal and cyclical,” Baptiste said, noting that over the last few decades, five to six years of reasonable profits is what would be witnessed in the airline industry, followed by two to four years of declining profits and in many cases, losses.
The SLP’s first deputy leader said Virgin Atlantic’s daily flights into Hewanorra International Airport adds value to Saint Lucia as a tourist destination.
“Given that Virgin Atlantic’s daily operations into Saint Lucia contributes to the island’s economic development and given that the withdrawal of Virgin Atlantic from Saint Lucia will result in reduced passenger numbers, which will impact negatively on revenues, hotel occupancy, demand for taxi service and other direct spending in the local economy, the Allen Chastanet led administration should establish a framework for a more structured dialogue with all stakeholders in order to comprehend this potential loss, in all of its ramifications and to proffer appropriate solutions,” Baptiste said.
He said the Virgin Atlantic withdrawal is even more serious when viewed from the lens of the Hewanorra International Airport Redevelopment Project given the heavy borrowing for the venture.
“We cannot afford to be casual about this matter as it can precipitate a major financial and economic problem in Saint Lucia. This is why we have made it abundantly clear that while airports are a major part of a country’s infrastructure and foster economic activities by encouraging international commerce and tourism and generate employment, airlines are the ones that determine the demands for air travel,” Baptiste said.
However, Tourism Minister Dominic Fedee is singing a somewhat different tune to that of the Labour Party stalwarts. He is optimistic that Virgin Atlantic’s departure from Saint Lucia will not impact the economy negatively.
Fedee told reporters Thursday that Saint Lucia is a strong destination and that a British carrier has already announced it would be bringing an extra 7000 seats into Saint Lucia.
“Those 7000 seats will add to an estimate which we have done which suggested that we have 18,000 seats in unused capacity from UK carriers coming to Saint Lucia. It means therefore that we are very close to closing the Virgin (Atlantic Airways) gap, or are very close to closing any shortfall that may have come about by the reduced seats coming from the planned Virgin Atlantic departure from our destination. This is very good news. We are well ahead of schedule in terms of insuring that we cushion the blow as much as possible,” Fedee said.