No room for everyone,
says BWIA boss
by Sampson Nanton
He had fought wing, claw and beak to keep his financially strapped airline in the sky.
For BWIA's Chief Executive, Conrad Aleong, keeping a tight reign on expenses was seen as the key to the carrier's long term success. With one hand he was holding tightly to the airline's meagre revenues, while on the other he was bracing for an onslaught from his newest domestic rival Air Caribbean.
The latest move by Trinidad and Tobago's Air Transport Licensing
Authority (ATLA) to open up the skies to competition further incensed
BWIA. ATLA's approval of Air Caribbean's application to operate
between Port of Spain and Miami threatened one of BWIA's most
economically viable routes in the region.
"There is not enough room for everybody on the route,"
insists Aleong, "unless everybody wants to lose." BWIA
had always maintained that it had exclusive rights to fly Miami
as the TT Government had signed an aviation contract in 1995,
which made BWIA the sole flag carrier from TT to Miami.
Air Caribbean had already captured the domestic market through
its service contract with ATLA. Seeing an expanded role for itself
in the regional aviation industry, purchased its first of three
jet aircraft - a 120-seater Boeing 737-200 from South West Airlines
to join its fleet of YS-11As in the middle of 1998. Since that
time, it has been seeking new and strengthening old air routes,
including routes to Barbados, Grenada, Guyana, St Lucia, Caracas
and Jamaica.
Clearly frustrated, Aleong conceded that "any competition
is a threat" to BWIA, and he made BWIA's intentions to resist
ATLA's decision clear.
"We have a legal right and an economic asset that was signed,
which, under international law, is enforceable. ATLA has granted
a license but a license is just a piece of paper saying that you
can fly. But you must get authorization to fly out of your country
and into another."
His words did little to shake Air Caribbean's chairman, Leslie
Lucky-Samaroo. He dismissed Aleong's beliefs of limited room as
"cheap economic thinking."
"This question of one airline is totally ridiculous. There
must be other carriers on the more lucrative routes and market
forces will dictate who survives, who falls on the wayside or
who makes money in the long run."
Lucky-Samaroo declared himself a firm believer of the "open
skies" policy, which has been adopted by the TT Government.
"I have no problem with competition. I think we are going
to get our share of the traffic on the domestic route, and so
would the other airline. And we would also be getting our share
of the traffic on the international routes. So you can call it
a trade-off, but that is the way the two national airlines of
TT must operate."
Aleong's hasty opposition to Air Caribbean's Miami extension was
only one of the many menaces that stared the airline in its face.
He still had to deal with American Airlines' rampage through the
more vulnerable islands, which for long had been doing grave damage
to BWIA's accounts books.
The governments of Grenada, St Lucia and Antigua were subsidising
American Airlines operations by US$1.5 million annually to maintain
flights to Miami. This meant that BWIA had to compete with American
Airlines on the Miami route with the scale tipped against it.
Miami has for long been BWIA's most profitable route. This payout
was sending wrong signals to all indigenous Caribbean airlines,
but at the same time it was necessary for tourism development
in those islands.
The air room is still tightening on BWIA and Aleong knows that
if something is not done quickly the airline would fail. He said
65 percent of BWIA's business came from tourism but he admits
that they will never make it financially on tourism alone.
BWIA has since then begun to look glaringly beyond the region
for hope. Edward Schumaker III, US Ambassador to Trinidad and
Tobago offered a chance when he encouraged Government to pursue
an open skies arrangement with the United States. This will give
BWIA unlimited access across North America, but those negotiations
are yet to result in something substantial for BWIA.
Europe on the other hand, has always been a very difficult option
particularly for charter aircraft due to the high cost structure
which characterises that market.
In this regard, strategic alliances both internationally and regionally,
seemed to be the only viable option. Early in 1998 it allied itself
with Guyana Airways. Their cooperation agreement included operating
as the single or joint carrier on selected routes.
The airlines intend to develop joint strategies for flight scheduling
between Miami, New York, Toronto, London, Caracas and Guyana.
BWIA has also been seeking a union with Virgin Atlantic Airlines,
Delta Airlines, British Airways, American Airlines, Continental
Airlines and Air France.
Air Caribbean know the limits the region offers in the air, and
has set its visors on destinations in Europe, North and South
America. However, there are no plans for alliances just yet.
"We have brought the company to this strong position without
partners," says Lucky-Samaroo, "and we intend intend
to carry-on with our policy into the future.
"When we have access to all these new routes that we are
developing, maybe at that point we would look at forming alliances
with other carriers," he concluded.
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