Tourism Minister wants investigation of LIAT!
Written By: Alisha Ally
Not one to mince words Tourism Minister Allen Chastanet says LIAT’s pricing system must be examined.
St Lucia’s Tourism and Civil Aviation Minister, Senator Allen Chastanet, is calling on the regional monopoly LIAT to explain its additional air taxes which is straining passengers’ pockets. At a press conference at the St Lucia Tourist Board’s headquarters yesterday Minister Chastanet called on LIAT to review its policies to better serve the region, and hopefully drop the price of tickets.
Chastanet revealed that his administration has been unhappy with the present state of intra-regional travel and the island has lost over fifty thousand passengers for the last two years. He attributes this in large part to the demise of Caribbean Star and LIAT’s new structure. Additional concerns were raised by the minister including LIAT’s claims that the level of government taxation has been the cause of the increase in the airfares.
“Going through the way the fare is structured, we believe it misleads the public. Included in the fare structure is a sales tax for US$9.08, the passenger facility charge (departure tax) US$25, airport development tax US$4.82, fuel surcharge US$22.50. That is on an airfare between St Lucia and Port of Spain. Between St Lucia and Barbados, sales tax is US$7.88, departure tax is the same, airport development tax US$.82, airport authority tax US$1.50 and fuel surcharge US$16.75.”
Transport Minister Guy Joseph has also been brought in to add his take on the issue and so far, Chastanet says he has met with the Air Licensing Committee for St Lucia and has asked for a review of these taxes. He said, the majority of these taxes are not St Lucian and could be illegal according to IKO legislation which states that it is illegal to “incorrectly” collect taxes. A report has been commissioned and the findings are supposed to be revealed in three weeks and LIAT is given an opportunity to explain the taxes during the research stage of the report.
“Given the competition we have internationally and the adjustments we are seeing people make internationally in terms of airlines lowering their fare, hotels lowering their room rates, governments reducing taxes, making all kinds of efforts in concessions to try to encourage businesses to grow—we have not seen a similar pattern take place here in the Caribbean. I want you to know this is a priority of this government. Intra-regional travel has a huge contribution to make to the small hotels but also in terms of the ability of people to do business and I know a lot of people who have just stopped traveling.”
Chastanet said airfare from St Lucia to Barbados is pricier than going to New York or Miami. “We’re really calling on this region to take on a full examination and we will be coming up with a report in three weeks to determine whether in fact these taxes have been erroneously charged and to make a decision on how we deal with that matter at that point.”
A letter was written by the St Lucia Air and Sea Ports Authority to LIAT several months ago asking for the removal of one of the taxes, however, the minister reports that no response or action has been seen on LIAT’s part. The minister concludes that LIAT’s operations are not in tandem with ICAO regulations. He cited that LIAT has two fuel surcharges for one flight whereas there is only supposed to be one per flight. On a matter of principle, the minister said he is not against the monopoly but LIAT has to realize it needs to make some sacrifices and compromises for the benefit of the entire region.
“The last thing that I would want to do is to accuse someone of anything wrongfully but I would say the manner at which these charges are being portrayed to the consumer is misleading.”
“One has to be a realist. LIAT has benefited from a major cash injection from three countries. The leases on several of the planes have been written off by the Canadian government. They have no debt to carry and they are getting planes cheaper than what they could be getting at any time. If in fact they’re only barely making money, given the airfares and this practice here, it doesn’t augur well for the future of LIAT the way it is presently structured. I am not against LIAT. What I am against is the policy of holding onto something that has proven that it cannot be sustainable. When LIAT was under competition it lost money, it refused to change. All the competition has now been eliminated and here it is how many years later and no one is able to identify one plan as to how LIAT is going to bring down its operating cost.”