Monday, April 18, 2016

Cayman Airways in dispute with Mexico

Cayman Airways is unable to fly over Mexico because of back fees the country claims it is owed for flights more than a decade ago.

Fabian Whorms, CEO of the national airline, said it was working to resolve the issue, which is a problem for several airlines in the Caribbean and Latin American region.

He said, “Cayman Airways has found itself in a situation where the Mexican authorities have issued us invoices for overflights that took place 10 and 15 years ago. The records aren’t really there to justify it. We can’t find those records. It is not that we disbelieve it, but in this case, we are not the only airline experiencing this issue.

“The amount we owe is not that significant in the scheme of things, but it is significant enough for us not to just write a check. It is a point of principle; we have to work this out.”

The issue came up last week as Cayman Airways and government officials announced plans to modernize the airline’s fleet of jets.

Tourism Minister Moses Kirkconnell said the additional range of the new planes would enable the airline to open up new gateways, potentially including cities on the west coast of the U.S. or in South and Central America.

Mr. Whorms said the issue was almost resolved and would not impact the airline’s ability to add new routes in the long term.

“As it stands right now we do not have any significant need to operate across Mexican airspace – it is not a factor for us at this moment in time,” he said. “I would go as far as to say that situation is almost resolved.”

The problem is an ongoing issue for Caribbean and Latin American airlines caused in part by the way Mexican authorities administer the fees charged for using its airspace, according to a written analysis of the issue produced by Caribbean Sky Tours.

Essentially pilots are required to self-declare the distances they have traveled through Mexican air space, work out the amount of tax owed and arrange payments via a Mexican bank.

Unlike in most jurisdictions, the fees are buried in the Mexican tax code and do not feature in the country’s aviation regulations.

“Many pilots are unaware of these requirements and have unknowingly incurred significant fees, penalties and interest which have resulted in denial of access to Mexico’s Flight Information Region,” according to Caribbean Sky Tours, which helps airlines and private pilots negotiate payment with the Mexican authorities.

From 2012 Mexico began to “rigorously enforce these regulations” taking measures including publishing a list of outstanding debtors to all aircraft towers and denying those airlines access to its Flight Information Region.

“If your aircraft is on this list and you attempt to enter Mexican airspace you could be denied entry and forced to fly around the Mexican FIR. A number of aircraft have already faced this scenario,” according to Caribbean Sky Tours. Mr. Whorms said the issue was a “big topic” at regional airline conferences but insisted he was confident it would be resolved soon and would not impact the long-term plans for Cayman Airways.

Original article can be found here:

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