Published On: Wed, Aug 5th, 2015

Global Air Transport Best Practices in Curaçao

Photo_Lionel van der WaltThis year the global airline industry will transport 3.3 billion passengers and 52 million tons of cargo. Worldwide, aviation supports jobs for 58 million people. It is the means to market for a third of the goods—by value—which are traded internationally. And it plays a unique role in connecting business to markets, uniting family and friends, bringing people together to solve problems, build understanding and develop global insights. It also is a powerful enabler of economic growth, employment and tourism.

Nowhere is this more apparent than in the Caribbean.

Air travel is a lifeline in our region and also is the preferred mode of transportation of one of our most important economic assets: foreign visitors. Tourism and the aviation sector facilitate and support nearly 1 million jobs and contribute US$14.8 billion, roughly 8.7% of Caribbean’s GDP. And while this contribution is significant, it could be greater.

Around the world there are many good examples to follow of countries whose governments work cooperatively with the airline industry, airports and other stakeholders to ensure the unique economic benefits from robust air connectivity are attained. Places like Dubai and Singapore, and closer to home, Panama and Chile all treat the air industry as a partner and as a result the industry has created tremendous value for each one of these markets. These governments also understand that the true value of aviation is its ability to catalyze economic activity and unemployment and not simply an easy target to levy extra taxes.

Unfortunately, this kind of partnership for mutual benefit and long-term thinking is not happening in Curaçao. The government has embarked on the development of an airport cost model that will be used to regulate charges in the country. While the airline industry does not oppose its establishment, IATA urges the inclusion of the airlines in the process as per International Civil Aviation Organization (ICAO) recommendations. Too often, we have seen that excluding the industry from important decisions like this one leads to the creation of a burdensome and inefficient pricing structure which undermines air connectivity and weakens tourism.

IATA also recommends the application of a single till pricing mechanism which ensures all airport activities, including aeronautical and commercial are taken into consideration when determining the levels for airport charges. It is the fairest mechanism of charging as it reflects the pricing airports would use if they were under real competition.

Taking these steps to guarantee an efficient operating environment for the air industry is critical in a region as dependent upon tourism as Curaçao and its Caribbean neighbors. The onerous taxes and charges many countries in the region levy on travelers and airlines make it a very expensive destination by air and a difficult one for airlines to conduct business. The result is that aviation is unable to play a bigger role in helping to grow local economies and stimulate job creation.

Simply put, the high price for air travel is driving away visitors. In some cases, taxes make up as much as 65% of the ticket price in the Caribbean and potential tourists are opting for less-expensive destinations because of it. And air travelers are the most valuable visitors to the region, on average they spend between $1,000 and $1,400 during a four-day visit whereas a cruise ship visitor typically spends between $70 and $200 depending on the destination.

IATA is a firm believer that partnering for mutual benefit is a key element in shaping positive outcomes and I am confident that if the government of Curaçao strengthens its partnership with the aviation industry, we will generate the transformative economic growth only our industry can deliver. I have seen it change lives for the better and improve prosperity in nations where the industry finds a supportive home and I am convinced we can achieve the same in Curaçao.

I stand ready to offer my personal support and all of the expertise of IATA to help achieve it.

By Lionel Van der Walt, Caribbean Area Manager, International Air Transport Association

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