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Letter: The visible hand of Adam Smith at Argyle International Airport
Published on May 2, 2017 Email To Friend    Print Version

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Dear Sir:

A recent media announcement by Caribbean Airlines (CAL) that it would be offering two regularly scheduled flights a week between the new Argyle International Airport (AIA) on the mainland of St Vincent and the Grenadines (SVG) and John F. Kennedy Airport (JFK) in New York City, beginning April 14, 2017, has received little attention, and deservedly so.

Rather than being “a big frolicking deal”, in the words of Professor Garrey Dennie in an essay speciously titled “The Invisible Hand at Argyle International Airport” (Searchlight newspaper, SVG, April 15, 2017, p. 12), in misplaced homage to the great 18th century economist Adam Smith, it represents business as usual, at most, for air travel from the mainland to other destinations.

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This is partly because it was false for CAL to claim that it is "... one of the first airlines to offer non-stop flights to the new airport, which also serves as an international gateway to the Grenadine Islands”, given that LIAT has serviced AIA since its February 14 opening as have SVGAir and Mustique Airways, each of which has had direct regularly scheduled or charter flights to St Lucia, Grenada, Barbados and, in the case of SVG Air and Mustique Airways, to the Grenadines for decades.

It was also deceptive for CAL to claim that "Customers will also benefit from seamless connections between St Vincent and the Grenadines and Caribbean Airlines’ other international and regional destinations" because the airline will not fly to the Grenadines at all and the "seamless connections" to regional and international destinations will require a plane and luggage transfer to and from Trinidad on CAL's ATR aircraft, a service almost identical to what has been offered for decades by LIAT with even smaller planes and, more recently, with the same 70-seat ATR aircraft carrying flyers back and forth to Barbados, St Lucia, Grenada, Trinidad, and elsewhere.

Moreover, the “seamless CAL connections” involve flying 286 km south from AIA to Piarco International Airport and then north to JFK, sometimes with two stops and/or up to 16 hours of layover in two different departure lounges.

More important, these same "seamless connections" could have been easily provided at the now shuttered but perfectly serviceable E. T. Joshua International Airport at Arnos Vale without the expenditure of some EC$700 million on building AIA, leaving the cash-starved country of SVG with an EC$400 million debt and EC$20 million in annual operating costs, nearly three times the cost of servicing the old Arnos Vale airport.
The CAL decision to service AIA in an indirect and one- or two-stop fashion (as opposed to direct, non-stop flights to and from AIA to New York and other destinations, as AIA was built to facilitate) should also remind us of what transpired on February 21 when New York bound passengers chose more convenient routings, as reported by SVG’s I-Witness News:

“[Dynamic Airways] Passengers [refused to book the February 21 flight to JFK from AIA because they] were apparently turned off by the fact that they would have had to transit in Guyana for seven hours before flying back to New York -- arriving in Georgetown at 9:30 a.m. and leaving at 4:30 p.m.”

As for the spin-off effects of the CAL flights, even if the two new CAL flights serve as a catalyst for new visitors to SVG, the 140 additional holiday arrivals per week would hardly make a dent in AIA’s huge debts or crippling operating costs.

Nor will this new service represent the first step in a truly seamless non-stop connection because CAL does not fly non-stop to any of our neighbours – Barbados, St Lucia, and Grenada – countries with much higher stayover visitor numbers. Instead, it has always flown to and from these countries with the same stopover “seamless connections”, inconveniently transferring passengers and their baggage from one plane to another as they are now doing at AIA. So much for Professor Dennie’s assertion that CAL is servicing SVG “…in a particularly ingenious way”.

It is erroneous for Professor Dennie to claim that “Competitive flights between JFK and Argyle International Airport (AIA) have arrived and the market will be changed, irrevocably so” and that “…the market is already yielding competitive ticket pricing for travelling to and from St Vincent and New York” because there is no evidence that these flights will lower travel costs or encourage more tourist visits if only because they ignore the theory of comparative advantage, a set of ideas developed by another brilliant economist, David Ricardo.

In fact, the cost of true non-stop return flights from JFK to St Lucia, SVG’s closest neighbour (67 km between their international airports), April 23-30, via JetBlue and United Airlines is US$591.56; the indirect, one- and two-stop flights on the same dates to and from SVG from JFK using Caribbean Airlines is US$769.56 (or EC$2,054.73) -- 30 percent higher.

The same can be said for the unadvertised but recently added “truly seamless” bi-weekly CAL flights from Miami to AIA, which involve a total of 35 hours of layovers in Trinidad going and coming, plus plane and baggage changes. The cost of the cheapest return flight is US$390.56 (EC$1,042.80). By comparison, flying nonstop to and from nearby Barbados on the same dates via American Airlines costs US$209.76 (EC$560.06) -- 46 percent cheaper. Talk about one step forward and two steps back in our aviation history!

It is also certain that Adam Smith (whose writings led to the theory of comparative advantage) would have immediately recognized that CAL is a highly indebted and inefficient government-owned operation that does not have the market discipline or managerial competence to lower its operating costs and fares regardless of the market competition.

Finally, the most important travel feature of all that Professor Dennie ignores is the elementary fact that the mainland of St Vincent lacks the necessary and sufficient tourist features, resources, and knowhow to attract many more holiday visitors regardless of how convenient flying here becomes.

***
This is the 51st in a series of essays on the AIA folly. My other AIA essays are listed below:

1. Get ready for a November election in St Vincent and the Grenadines! But which November?
2. Lessons for Argyle International Airport from Canada's Montreal-Mirabel International Airport
3. Lessons for Argyle International Airport from the cruise ship industry
4. Lessons from Target Canada for Argyle International Airport in St Vincent
5. Lessons from Trinidad and Tobago for Argyle International Airport
6. The dark side of tourism: Lessons for Argyle Airport
7. Why Argyle won't fly: Lessons from Dominica
8. Ken Boyea and the Phantom City at Arnos Vale
9. Airport envy Vincie-style
10. Fully realising our country's tourism potential
11. Airport without a cause
12. The unnatural place for an international airport
13. The Potemkin Folly at Argyle
14. False patriotism and deceitful promises at Argyle
15. Airport politics and betrayal Vincie-style
16. Phony airport completion election promises, Vincie-style
17. Is Argyle International Airport really a ‘huge game-changer for us’?
18. Has the cat got your tongue, prime minister?
19. More proof that Argyle won't fly
20. Our very own Vincentian cargo cult at Argyle
21. The missing Argyle Airport feasibility studies
22. The world's four most amazing abandoned airports
23. Farming, fishing, and foolish talk about Argyle International Airport
24. Argyle Airport amateur hour
25. St Vincent's place in the world of travel
26. Investing in St Vincent's tourism industry
27. The Argyle Airport Prophecy: What the numbers say
28. Did the IMF drink the Comrade's Kool-Aid?
29. Why Qatar? Why St Vincent and the Grenadines?
30. Foolish words about Argyle International Airport
31. 'If I come, you will build it': Lessons from the Maldives for Argyle International Airport
32. City lessons for Argyle International Airport
33. Who really lands at Arnos Vale?
34. No ticky, no washy - Argyle-style
35. We have met the Vincentian tourism enemy and he is us
36. Hotel St Vincent 
37. Why St Vincent Island has so few tourists
38. Why Bequia is a gem of the Antilles
39. Why seeing is believing in the Caribbean tourism industry
40. St Vincent's cruise ship numbers are much lower than we think
41. Lessons from Barbados for Argyle Airport
42. Cuba's tourism rollercoaster: Lessons for Argyle Airport
43. What the world teaches Black Sands Resort and Villas
44. Not all Argyle airport critics are 'internet crazies'
45. Why Roraima Airways? Lessons for Argyle airport
46. The print media's take on the opening of Argyle International Airport
47. Our Argyle International Airport 'veritable miracle'
48. The Argyle airport 'poppy show' opening
49. St Vincent's 2016 tourism numbers are nothing to brag about
50. Going forward or moonwalking? Lessons for Argyle International Airport
 
C. ben-David
 
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Comments:

Allan H. F. Palmer:

I have to laugh with the depths Ralph E. Gonsalves will go to in order to deceived the Vincentians, however we all know that CAL cannot operate direct flight from SVG to the USA because of international certification deficiencies, and therefore CAL will be proforming the same type of Service as Liat currently offer a connection service. The only difference is while Liat was connecting international passengers to an airline that it has no shares, control, or working relationship with, CAL transfer potential passengers from a regional flight to an international flight that is operated by CAL.

It is the same trick that Ralph Gonsalves try to do pass off when the AIrpoer at Argyle was open. He had planes that would normally be used for international or mass passenger transport land and claim that they were international flight when they were all regional flights. Ralph "Salt" Gonsalves deals in deception

C. ben-David:

More rubbish, Allan Palmer.

Any American airline is now free to fly nonstop to Argyle on a regularly scheduled basis but won't do so because there are not enough passengers to make this profitable not because of so-called certification issues.

Your pathological hatred of the Comrade, a trait you share with Peter Binose (who is now in self-imposed hiding licking all his self-inflicted intellectual wounds) and several other Internet crazies, has blinded you all to the world of facts and reality.

"Fake news" and "alternative facts" can fool only the handful of other fools on this site.

On the other hand, if you have any proof of any "international certification deficiencies" you claim are present, please share them with the rest of us.

C. ben-David:

I should have written that, "Any American airline WILL SOON BE free to fly nonstop to Argyle ..." pending what will be obvious approval by the ECCAA and acceptance of this by the relevant American government agencies.

The point is not whether the airport was built to the appropriate standards but whether it should have been built at all.


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