By Nekaelia Hutchinson
BRIDGETOWN, Barbados (BGIS) — Minister of Tourism, Richard Sealy, set the record straight on Tuesday with regard to the state of airlift in Barbados.
He explained that recent, "misinformed statements" had led to his decision to speak on the arrangements between international airlines and the government of Barbados.
"During the course of the Estimates debate, the Barbados government was accused of paying GOL Airlines from Brazil US$200,000 in the month of January. I refuted that during the course of the debate as being totally false and I stand by that assertion… [This rumour] has now gone over to the Upper Chamber and I’m told that yesterday a rather outrageous claim was made that we have been paying GOL in the vicinity of $140,000 per flight to come to Barbados. No currency was identified, I’m not sure if that was US or Barbadian, but at any rate, it is simply not true," he stressed.
|Barbados Minister of Tourism, Richard Sealy|
Sealy expanded on the nature of the agreement that exists with GOL Airlines and highlighted the fact that such arrangements were not a foreign concept.
"We do have a revenue guarantee arrangement with GOL, as we have in fact with other airlines. We have such an arrangement in place with JetBlue, there’s such an arrangement in place with WestJet, there’s an arrangement in place like that for Condor and the government of Barbados has been doing this for many years. The last government is well aware of the millions of dollars that went towards airlift," the tourism minister said.
He also spoke frankly on the air service from Brazil, which he described as an endeavour with great potential.
"The truth on GOL is that it started with some modest success, there were occasions when we had full flights, but there were occasions when the flights were less than full; but that is what building a relationship is all about. I can tell you that the last flight that came in on Saturday had 97 passengers on it… prior to that it had 147 passengers on it, [so although it] started a bit slow, we’ve had two good services in March. We had an excellent December, and an excellent January and February was not too bad. Many of those flights, actually, were full. So far from having to subsidise the GOL flight, there were many occasions when the flight was making money," Sealy said.
It is also hoped that as the market develops, there will be opportunities for increasing access within the Brazilian and other Latin American markets.
"We would love to have the second flight [from Brazil] because, as it is now with the weekly flight, you’re forced to have either a seven day or a 14 day visit… particularly for persons who may want a shorter vacation or businessmen… so having that second flight would facilitate that and we are actively looking at that. [But also consider that] every GOL passenger that comes in [represents] at least seven [nights stay]… so the government’s investment in GOL is a good one and it is yielding results… one of the other arguments I heard is that we should’ve dealt with a charter operator instead of dealing with GOL.
“The disadvantage to that is that you miss out on business beyond the gateway. Charter operators fly point to point — in the case of GOL, it has an extensive network throughout Latin America and South America in particular… we are getting business from Argentina, we had some Argentinean journalists here only last week… from Chile and Uruguay… and not only from Sao Paulo but also from other parts of Brazil," he said.
The tourism minister also noted that the method in determining new markets was based on probable returns and underscored the process taken to determine viable markets.
"What we do when we look at these relationships is we look at the rate of return on the investment. You would have heard me in the House of Assembly speaking about the [Return on Investment] ROI on the WestJet service from Toronto, that ROI is in the vicinity of 13 to one. The JetBlue flight from New York, the ROI has been better, it’s been 23 to one… When we are investing in these arrangements, we look for an ROI of at least seven or better. That is, for every dollar of the taxpayers’ money that is spent, we would ideally like to see a return of seven spent in the economy, based on the dollar we invest. Now, I can say that GOL is just under seven to one, in terms of what we’ve calculated to date, and all considered, that’s not bad, because it’s a developmental project, it’s only a weekly service and the best is yet to come," he said.