Monday 19 August, 2019

Hilaire questions Fedee on Virgin - "Something does not seem right"

SLP MP Ernest Hilaire posted the following to his official Facebook page earlier today, July 30, 2019.

"Something is not right about the account presented by Hon. Dominic Fedee on the Virgin matter. That's just not what you expect of Virgin. And the explanation given does not seem like the whole story.

Firstly, Fedee says demand for Saint Lucia is strong in the UK market, only second to Barbados. In fact, arrivals are up 18% up to May 2019 when compared to 2018. So why then did Virgin seek a subsidy? Subsidies are usually sought when demand is low or when operational expenses are rising (usually caused by high fuel prices) and airlines wish to offset their expenses. We have strong demand for Saint Lucia and fuel prices have been steady. So, what's going on?

Secondly, the request as presented by Fedee seems abnormally high. I say abnormally high because we have paid subsidies before and it has never been that high. So why now? If this is true, again, what's going on?

Thirdly, Allen Chastanet as Minister of Tourism was a champion of paying subsidies. Here is the list of subsidies it was reported that he paid over five years :

- American - $11,371,597.00

- British Airways - $5,325,336.00

- Condor - $2,334,243.00

- Excel Freedom Flight - $ 800,118.00

- Jet Blue - $5,180,741.00

- Sun Tours - $ 462,643.00

- Virgin Holidays - $8,648,520.00

- Westjet - $4,328,221.00

---------------------- 
TOTAL - $38,455,420.00

You will recall that as Minister of Tourism, Allen Chastanet's Ministry got EC$50M a year which is EC$250M over five years.

So what has changed now?

My research tells me that Virgin asked the following:

1) Antigua and Barbuda US$1.5 million

2) Saint Lucia US$2.5 million

3) Grenada US$1.5 million

4) Barbados US.$2.5 million

5) Trinidad for an undisclosed sum, but negotiations are ongoing.

Our biggest challenges in these situations are two fold - we are isolated on the regional stage because of the conduct and posture of our Government and secondly, we send, literally and figuratively, a boy to do a man's job. In those circumstances, arrogance is the enemy of common sense.

It leads one to wonder, who is advising on negotiations. 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. It 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 interests not to pay when others want to pay, then I can understand the Government's position. But like the EU blacklisting, Saint Lucia believes it must be a lone ranger as the Government alone knows what is best.

So the the issue is what is in our best national interest? Do we need Virgin more than Virgin needs us? Word is that with the present state of the aviation industry, planes are not readily available and Virgin will have a reduced fleet come next year. So there is competition to assign planes to the most profitable routes. Virgin can afford to move its planes at no loss. But can we afford to lose Virgin at no loss? Or if there is a loss, and that is 7%, of all our arrivals, can we sustain it? If we pay Virgin, are we opening the flood gates for others? If others still ask for subsidies, do we follow the precedence set with Virgin and allow them to pull out? Where does it end?

The answer to these questions lie in whether we can muster a collective and regional bulwark to face these demands. As it stands, we have been 'not so smart' in our regional diplomacy and conduct. That is our fundamental weakness.

Sorry Hon. Fedee but we need full disclosure. Something does not seem right."

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