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Caribbean remains high on low-cost carrier agenda

The Caribbean remains an attractive region for expansion from carriers to the north in the USA and to the south from Brazil, but airports and destinations have to market and package their product efficiently and with an eye on costs to win new service, carriers told delegates at the Network Latin America event being held in St Maarten.

In particular, low-cost carriers see the Caribbean as having great potential. For example, JetBlue Airways and Spirit Airlines have already been adding significant new service into the region. John Kirby, senior director strategic planning at AirTran Airways, believes the Caribbean could soon be dominated by low-cost players just as Florida has become in the USA.

"There are a lot of parallels," he said. "The Caribbean could be a low-cost haven going forward. But a lot of what is holding it back is an inability to be efficient, not only from the operational standpoint but from a cost point of view."

After a couple of false starts AirTran has put several services into the region in the past couple of years. It now has routes from its hubs in Atlanta, Baltimore and Orlando to destinations like Aruba, Cancun, Montego Bay, Nassau and San Juan. "We are going to digest this expansion and talk here to airports for future opportunities," said Kirby.

AirTran's strategy has been to seek out the high volume markets with "destinations that sell themselves", said Kirby. The downturn has meant that carriers are extremely reluctant to take chances on routes that might be experimental. "Carriers are less likely to talk risk going forward than we ever have. Developmental routes are not too popular in the front offices [at the moment]," he said.

Brazil's Gol is adding new services into the Caribbean as the tourist market to destinations like Aruba, Curacao and the Dominican Republic begins to open up, said Mauricio Emboaba, planning and statistics director at the carrier.

In general if travellers want to travel to the Caribbean islands they have to go via Miami or New York in time-consuming 15 hour trips that can cost in excess of $1,500, said Emboaba. Gol can serve these markets direct from Brazil with its 737-800s at about half the cost and with a trip time of just over six hours.

In addition, Caribbean opportunities are opening up because Brazil is striking new bilateral deals with various countries. Gol and the airport operators in the Dominican Republic and Curacao have been co-operating to lobby the government authorities to encourage the revision and acceleration of new bilaterals. "This kind of partnership between airlines and local airports and authorities is very important," said Emboaba.

Harnessing the local tourist bodies and the hotel community is also critical to make a destination as attractive as possible, said Dr Eugene Holiday, president of Princess Juliana International Airport, the main gateway to St Maarten. PJIAE handled 1.7 million passengers in 2008 but has seen a fall in numbers of about 10% this year, he said.

The airport is keen to develop more links to the USA and also encourage service to South America and is considering airline requests for more flexible volume based pricing, said Holiday.

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