Thursday 6 August, 2020

Fedee and Hilaire continue to clash over Virgin Atlantic

Tourism Minister Dominic Fedee and Castries South MP Ernest Hilaire have exchanged more words on the Virgin Atlantic issue.

Fedee wrote a response to Hilaire's first statement and Hilaire, in turn, has issued a response to Fedee.

Fedee classed Hilaire as a "false prophet" who offered the public a long list of mischaracterizations on the issue while Hilaire countered that Fedee dodged the substance of his argument and that, "the Minister’s response is testimony that one really should not send a boy to do a man’s job."

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Said Fedee, "His most recent offence of political heresy is the clear misrepresentation of the Virgin Atlantic Issue. Dr. Hilaire clearly has not researched the numbers. Had he done so, he’d know that as tourism minister Allen Chastanet never had a budget of $250 million."

Hilaire responded, "Firstly, he claims that had I researched the figures it would have revealed that the Prime Minister as Minister of Tourism never had $250 million ($50 million each year for five years). Ok Minister, if my research was inaccurate, can you tell the public how much did he really have? And by the way, the point being made was that the Minister had an unprecedented budget and DID spend monies subsidising airlines. Can that be denied? And why should anyone believe anything that the Minister or the Prime Minister says without providing evidence to the public? Does he want me to provide a list of statements, promises and information that have been proven to be false?"

Fedee continued, "Further, the figures Dr Hilaire used to indicate the subsidy spend of other Caribbean islands to Virgin Atlantic are unverifiable since the islands would have signed a confidentiality clause to safeguard the sensitivity of such commercial information.

The confidentiality clause was never signed by Saint Lucia as we have never reached an agreement with Virgin Atlantic. And why would responsible governments around the region share this information with Dr Hilaire and open up themselves to requests from other carriers who may be disadvantaged by the subsidy to another airline?"

Hilaire countered saying, "Secondly, the Minister claims the figures I stated in relation to Virgin Atlantic’s request to other islands could not be verified as they would have signed confidentiality clauses. He further claims that Saint Lucia never reached an agreement with Virgin Atlantic and as such never signed. As to the statement that other Governments would not share information with me, well the Minister has his wires crossed and that is on him. It says something about the Minister's standing that regional colleagues would not share information with him. Poor jab.

Mr. Minister, what I stated was what Virgin Atlantic requested from other islands. I never stated that these were accepted and agreements signed. The Minister should have read what I wrote before he vigorously responded to me."

Fedee continued, "The right precedent has been set by this government respectfully saying no to Virgin Atlantic’s request for a subsidy. It is clear to the industry that we are interested in a sustainable business approach as it relates to flights coming to Saint Lucia. While the government of Saint Lucia supports sharing the financial risk for start-up flights, we are of the firm belief that airline routes after two or three years of government support should become financially viable. 

In the last eight months, Saint Lucia has attracted eight new weekly flights with seven directly from Miami and one from Chicago, starting December 19. We are proud that none of the above-mentioned attracted Minimum Return Guarantee (MRG).

This demonstration of confidence by other carriers in our destination makes it even more difficult to justify subsidies to any carrier at this time. Like those carriers, I believe in the power of the St. Lucian brand, the hospitality prowess of its tourism professionals and the legend of its natural beauty. 

The case before us is one that requires critical analysis, not hit or miss political mud-slinging. It would be difficult to spend 20% of our marketing budget for a return of 7% of our global passenger arrivals, especially when other airlines are planning their own growth strategy for Saint Lucia without the need for subsidies." 

Hilaire responded, "Thirdly, the Minister says sorry to me and that it was the right decision to say no to Virgin Atlantic's request. This suggests that I had condemned the decision of the Government. The Minister goes on to state that this case requires critical analysis and not narrow political views as expressed by me. This is another disappointment with the Minister. Maybe he should first demonstrate some critical review to understand what was written. Here is what I wrote “ The Virgin situation had to be approached at a regional level. Virgin would have to deal with us as a collective grouping of nations or not at all. If they pull out, then it has to be with the fear that they would have to pull out of every island. IF FOR SOME REASON, IT IS IN OUR BEST NATIONAL INTEREST NOT TO PAY WHEN OTHERS WANT TO PAY, THEN I CAN UNDERSTAND THE GOVERNMENT'S POSITION'. So where did I oppose the Government having to pay? Maybe, had the Minister been a little less haughty then he might have read and understood what was written."

Fedee continued, "Moreover, the aspiration of a regional approach is most ideal in circumstances such as these, but it must also be appreciated that the Caribbean does not have the best track record on the whole subject of integration and functional cooperation. I must highlight that despite our attempts to arrive at a regional consensus on the Virgin matter, we appreciate that our sister Caribbean islands are in a different place in their development of tourism and more importantly airlift capacity. Thankfully on this occasion, Saint Lucia has the option to say no."  

Hilaire responded, "Fourthly, the Minister stated that the region does not have the best record on regional co-operation and functional co-operation. There is some truth in that. He went on to say that despite the best efforts of Saint Lucia to adopt a regional consensus, Saint Lucia had the option to say no. So Minister, can you give us more details? Are you saying that you did have a meeting or consultation with other Ministers of Tourism and they decided that they would be accepting Virgin Atlantic's request and did not support Saint Lucia's position? Is it that the other islands are NOT afraid that other airlines will start demanding subsidies too? Is it that the other islands have enough resources to pay out subsidies to all other airlines if they come calling? Is it that unlike your explanation that Saint Lucia would not be getting value for the subsidy that the other islands believe they would be getting value?"

Fedee concluded saying, "We feel further justified, as in consultation with the local private sector on Saturday July 26 the overriding consensus was that the level of investment required to keep the Virgin flight into Saint Lucia is burdensome on national tourism marketing budgets. While as an industry both the private and public sectors would have loved to keep the Virgin flight flying, we appreciate that as an industry a better return on investment can be attained. It was a clear business decision in the best interest of Saint Lucia. As indicated by me publicly, we continue to be open to further dialogue with Virgin Atlantic with a view to arriving at a mutually beneficial corporate relationship.  

As for Dr Hilaire this is not his first attempt at misleading the people of Saint Lucia in his own political interests. Just recently in the House of Parliament, the Prime Minister had to set him right when Hilaire publicly asserted that the CIP figures were not included in the Estimates, when in fact the figures were clearly outlined in the document.

He has also told many untruths on the controversial tourism development at Black Bay by failing to acknowledge the former SLP administration sold acres of prime beach front land six days before the 2016 general elections, and below market value. This much can be gleaned from the development agreement signed by former Prime Minister Dr. Kenny Anthony on May 31st, 2016. 

The list of Dr Hilaire’s fabrications is quite long, and confirms my recent public characterization of him as a false prophet."

Hilaire's conclusion was, " Minister, the essence of my posting was to achieve what I stated in my closing line, “Sorry Hon. Fedee but we need full disclosure. Something does not seem right.” The Minister's response makes that request even more needed. To add to the uncertainty of the Government’s position were the comments made by the Prime Minister at a Monday press briefing. The Prime Minister was telling in his comments. Read the following statements from the PM and tell me if something does not seem right.

One, that Virgin Atlantic asked for US$2.5 million for three years.

Two, the money would go to the bottom line of Virgin Atlantic. It would not be a minimum revenue guarantee.

Three, it is more than Saint Lucia spends for the entire year of marketing in the UK.

Four, Virgin Atlantic is not the largest carrier from the UK and therefore what would that mean for the larger carrier.

Clearly, Virgin Atlantic request is unreasonable. So how did the negotiations with Virgin Atlantic, which was making an unreasonable demand proceed? Let me quote the Prime Minister.

“They had asked me to counter their offer; I felt it was difficult to do that because I didn’t understand the circumstances of their problem.”

I must ask how do you negotiate if you don't counter offer?

I am reminded of negotiation class. There was a parent with two children who were both crying for a grapefruit. She thought the best solution was to cut it into halves and so she did, giving each child a half. Actually one child wanted only the skin and the other only the inside. If only she had made the effort to understand the demands of each child, she would have maximised the benefit to each.

Here is what I stated in my posting and I repeat “If this is true, again, what’s going on?”

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