Tuesday, April 03, 2012

Regional governments blamed over REDjet woes

(Barbados Nation) An international aviation think tank has suggested that Caribbean governments must shoulder some of the blame for REDjet’s demise.

The Centre of Asia Pacific Aviation (CAPA), the first agency outside the region to comment on the airline’s grounding, said long delays in granting the low-cost carrier permission to start flying to several destinations last year also hurt REDjet’s potential for profit and might have contributed to its current financial situation.

“REDjet’s failure to execute a low-cost model in the Caribbean reflects the longstanding realities of governments in the region refusing to fully liberalise to allow any meaningful competition in the market,” said the expert body in its CAPA Leading Edge blog published on its website.

“Ultimately it seems REDjet’s optimism and ambition caved under the realities of operating in the Caribbean market . . . Now it is back to business as usual in the Caribbean – protectionist governments keeping a tight grip on traffic rights in order to protect their loss-making flag carriers.”

The Australia-based agency, which has offices in Europe and Southeast Asia, pointed a finger at Trinidad and Tobago which it said was highly protective of state-owned Caribbean Airlines (CAL) and that government’s subsidizing of CAL’s fuel costs, created “even more hurdles for viable competition in the region”.

Source:   http://www.stabroeknews.com

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