IATA’s Caribbean Area Manager Van der Walt: Unlocking the value of aviation in Curaçao
WILLEMSTAD – The Caribbean Area Manager of the International Air Transport Association (IATA), Lionel van der Walt is currently in Curaçao and spoke this morning to the aviation sector this morning at the Marriott Hotel.
This is the speech Mr. Van der Walt gave during the presentation.
Good morning Ladies and Gentlemen. It is a pleasure to be back in Curaçao, one of the Caribbean’s most promising markets for aviation. Thank you for taking time from your busy schedules to join us today.
This year, IATA is celebrating its 70th Anniversary: In April 1945, 57 airlines from 31 countries gathered in Havana, Cuba to found the International Air Transport Association (IATA). Today, our organization has grown to some 260 member airlines and this year alone, our members will transport over 3.3 billion passengers, nearly 52 million tonnes of cargo via a worldwide network of some 50,000 routes.
Where are we now
Looking forward, global air passenger numbers are set to double over the next 20 years with a 4.0% annual increase in traffic growth. To give you some examples here in the Americas, Colombia’s domestic market will overtake the British and French domestic markets by 2019 while Brazilian domestic air travel, despite the country’s economic slowdown, will overtake Japan’s home market by 2022 and establish itself in the top three of global domestic aviation markets.
I wish I could say we had similar rosy projections for Curaçao and its Caribbean neighbors. Unfortunately, most of the Caribbean is not seizing the opportunity to foster a robust air transport industry which would promote a stronger tourism industry, greater inter-regional connectivity and increased economic growth. Today, tourism and the aviation facilitate and support nearly one million jobs and contribute US$14.8 billion, roughly 8.7% of Caribbean’s GDP. And while this contribution may sound significant, it could be much more.
For this to happen, the region’s governments need to work closely with the aviation industry while embracing smarter regulation and observing global best practices.We also urge the region’s governments to remember that the real value of aviation is the global connectivity it provides and the development it stimulates, not the fees and tax receipts that can be extracted from it.
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.
A Roadmap for Curaçao
This kind of partnership for mutual benefit and long-term thinking unfortunately has not been happening in Curaçao to date. I have urged the Government and industry stakeholders such as Curacao Airport Partners (CAP) and the Dutch Caribbean Air Navigation Service Provider(DC-ANSP) to adopt a transparent and inclusive consultation process with the industry, in line with International Civil Aviation Organization (ICAO) recommendations, before embarking on changes that affect the airlines. Most recently, CAP and DC-ANSP have said they intend to increase charges. We have met with and urged these stakeholders to provide all the information required for a proper consultation process. Simply put, the airlines need to be part of the process from the beginning to secure positive outcomes for all. As per ICAO principles, we understand the need for airlines to cover their fair share of costs, however, the industry needs a fully transparent consultation process to ensure the charges are fair and equitable for all.
In a meeting yesterday with the Honorable Minister Camelia-Römer, the Curaçao Civil Aviation Department, Curaçao Airport Holdings and other prominent industry stakeholders we learned that the government is developing legislation to regulate airport and ANSP charges in the country. During the meeting, we made it clear that while the airline industry does not oppose its establishment, IATA again 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 local economies. Fortunately, the Honorable Minister committed to give the airline industry an opportunity to comment on the proposed legislation which is a very positive development for the future of air transport in Curaçao.
IATA also recommended 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 most suitable mechanism of charging as it reflects the pricing airports would use if they operated 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 do 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 we are encouraged that Honorable Minister Camelia-Römer will take the promised action to strengthen the government’s partnership with the aviation industry. This bold move is desperately needed and would allow the airlines to generate the transformative economic growth only our industry can deliver. I have seen it change lives for the better and build prosperity in nations where air transport finds a supportive home and I am convinced we can achieve the same in Curaçao.