LIAT Increases Fares – And Fights Back!
LIAT
Signs Onboard Advertising Deal Regional airline, LIAT, has signed a multiyear agreement with the US-based Global Onboard Partners (GOBP) to create inflight advertising campaigns that include advertising on all seat backs on the plane. The carrier’s first campaign was rolled out last week and promotes the island of Dominica and its numerous cultural and music festivals that take place on the island throughout the year. “Our seatback holders are producing amazing recall rates among passengers and we’re pleased to partner with LIAT to provide the Caribbean’s first in-flight advertising programme on the back of each seat that guarantees high visibility at all times during the flight,” said Global Onboard Partners CEO Kirk Adams. “In the coming months, we look forward to expanding the programme to include all areas throughout the cabin with imagery that brings the islands to life on the aircraft.” GOBP, which has its headquarters in Atlanta, Georgia, will work with the carrier and its existing and new advertising partners to implement campaigns that reach passengers travelling through LIAT’s twenty destinations in the Caribbean. “We at LIAT - The Caribbean Airline, are indeed excited to get this programme up and running,” said LIAT’s Marketing Manager, Derrick Frederick. “The value to advertisers who can now offer products and services to a captive audience of approximately one million passengers over the course of a year is unparalleled in the region. It’s been a pleasure working with the GOBP team in further enhancing our in-flight experience.” ◊ Courtesy: Caribbean 360
LIAT, the embattled Caribbean Airline, continues to suffer the pains of rising costs and reducing profits in the face of stiff competition. Now it’s fighting back. That’s the signal from the company’s third quarterly meeting held in Barbados in September. Started in 1974, the Caribbean’s longest surviving airline has historically shared a monopoly on intra-Caribbean travel with the likes of Trinidad & Tobago’s BWIA. But that’s no longer the case. It’s become the target of its fellow regional and international competitors. Majority owned by the governments of Antigua, Barbados, and St. Vincent & the Grenadines, “The Caribbean Airline” has survived all challenges – from St. Vincent & the Grenadines based EC Express (almost two decades ago) to disgraced Allen Stanford’s more recent Antigua based Caribbean Star. Today, while earlier competitors have virtually fallen out of the sky, LIAT continues to face stiff competition in the Caribbean market – now, perhaps, more fierce than ever. LIAT’s stiff competition today comes from two new airlines within the region: Trinidad & Tobago’s Caribbean Airlines Ltd (CAL) and Barbados based REDJet, both of which have distinct advantages that LIAT simply can’t afford. REDJet is a low-cost carrier trying (successfully so far) to replicate Europe’s Ryanair experience in the Caribbean by charging only US $9.99 (plus government tax) per ticket to destinations like Trinidad & Tobago, Guyana and Jamaica. CAL, which replaced BWIA as Trinidad & Tobago’s national airline and recently entered into a strategic alliance with Air Jamaica, also benefits greatly from fuel cost savings as a result of subsidies from the Trinidad & Tobago government. LIAT continues to be the main mover of people between the islands. But its wings are being cut short steadily by several factors, including rising fuel costs, increased government taxes, increasing operating costs, fleet upgrade necessities, trade union blues and insufficient government capital support recently forced it to raise fares.
REDJet has also been applying for and receiving permission to fly to an increasing number of destinations served by LIAT within the Eastern Caribbean, while CAL continues to seek and receive more access to more Caribbean airports served by LIAT. CAL’s distinct fuel subsidy advantage allows the Trinidadian airline a distinct competitive advantage over its fellow intra-Caribbean carrier, allowing it to save where LIAT bleeds. Besides, some Caribbean governments – particularly St. Lucia – do not disguise their dissatisfaction with LIAT and are openly courting new airlines seeking to compete with LIAT.
Now LIAT is fighting back.
Chairman of the Board of Directors St. Vincent & the Grenadines Prime Minister, Dr. Ralph Gonsalves, indicated after the latest quarterly board meeting that the decades-old airline will be taking on its competitors and challenging its critics, including governments with shares in the airline, before the end of the year. He said LIAT will challenge its minority shareholder governments to “put up or shut up.” According to Gonsalves, some of the minority shareholder governments agreed to decisions and committed themselves at meetings to contribute financially to LIAT, but never lived up to their commitments. The tough-talking Vincentian leader, who has been one of LIAT’s staunchest defenders in the Caricom region, also indicated that LIAT would be taking steps to address and hopefully resolve the fuel subsidy issue within the context of the Caricom Single Market framework. He subsequently indicated, however, that LIAT had taken steps to take CAL to court. The LIAT Chairman said the airline was filing its case with the Caribbean Court of Justice (CCJ) on the basis of the “unfair competition” enjoyed by CAL through its special fuel-saving subsidy arrangement with the Trinidad & Tobago government. Gonsalves said LIAT was sure it would win its case because the appropriate statutes outlawed unfair competition between regional airlines. The Barbados September LIAT meeting was also attended by Barbados’ Prime Minister, Freundel Stuart and Antigua and Barbuda’s Prime Minister, Baldwin Spencer and they pledged to meet again – for their final quarterly board meeting before the year is ended, to review progress on decisions taken. ◊ BusinessFocus
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