1. CARICOM SECRETARIAT REGIONAL SYMPOSIUM ON SERVICES July 15, 2009
AIR TRANSPORT SERVICES SECTOR
El Perial Management Services

2. THE OBJECTIVE “A Public Good”?
Vital importance –regional linkages; CSME
Important – tourism industry; reduced reliance on extra-regional airlines
Member states mandated to cooperate
Revised Treaty of Chaguaramas
“A Public Good”?

3. AN EFFECTIVE INSTRUMENT
Are we satisfied to date?
Posit the need for viable airline(s) or
Deep pocket altruistic ownership
So…A viable public good?

4. KEY CHARACTERISTICS OF AIR SERVICE
Derived Demand
Inherently dangerous….to safe and secure
High % de facto fixed costs
Optimise flight profitability
Not for the poor or the faint hearted

5. SO…BASIC REQUIREMENTS FOR VIABILITY
Large capital base
High demand for travel
Efficient economies of scale
Strong commercial service-driven culture
Any Regional Examples?

6. THUS… THE REGIONAL AIRLINE EXPERIENCE
HISTORICALLY BAD!
Do not meet the basic requirements
Still require on-going support
LIAT an exception?

7. RELATED MEMBER STATE STRATEGIES
Risk Minimisation
National rather than Regional
Diversification of Airlift - all
Ownership of Airlift – minority
Liberal International ASAs
Restrictive Regional ASAs

8. REFLECTS… THE QUERY ABOUT DOMICILED AIRLINES
Not proven for international service
Key regional examples
Can be a case for intra-regional service
Both require stimulating derived demand

9. STIMULATING DERIVED DEMAND - I
Our Tourism Product
“Tourism is a potentially effective way of expanding and deepening economic activity through the expansion of the population of a community by short stay persons with a disposition to spend on services that provide value.”
Community Centred
Not Paradise…..Please!

10. STIMULATING DERIVED DEMAND - II
Neglected Markets
Multi-destination
Diaspora
Intra-regional

11. STRENGTHENING DOMICILED AIRLINES
Stimulating tourism demand
Implement CSME
Review intra-regional ticket taxes
Maintain IASA Category 1
Upgrade CASSOS
Implement Regional Air Traffic Control
Adopt “open skies” ASAs
Improve hub airport-client country relations
Regional airline functional cooperation
International airline strategic alliances
Proper airline capitalisation
Corporate commercial culture

12. PRE-CONDITION FOR SUCCESS
POLITICAL WILL….POLITICAL WILL
Objective examination of past marketing failures
Why has CASSOS been the only real regional success?
Why is MASA the partially agreed least common denominator?
Why is insularity paramount?
What is the strategy to ensure implementation?