Adrian Loveridge, Peach and Quiet

The Adrian Loveridge Column – Fuel Charge Adjustment

According to a statement issued recently, the 200 plus airline members of the International Air Transport Association (IATA) are poised to deliver a higher than forecast record profit in 2015 and should see a further earnings increase in 2016, literally ‘fuelled’ by oil prices near seven-year lows. Profits for last year are estimated at around US$33 billion representing a near doubling of earnings after carriers combined to deliver a net profit of US$17.3 billion in 2014.

So good news for the consumer or traveller you might think. We know that many airlines buy aviation spirit forward (hedging) at fixed prices, so there is bound to be some sort of delay in lowering fares, but why are some carrier’s months later after the dramatic fall in oil prices still imposing a fuel surcharge, including our own regional airline, LIAT?

The question that has to be asked is, what was the price of Jet A1 fuel per gallon in January 2015 and what is it now?

When you Google ‘Liat fuel surcharges’ this is what appears on their website – ‘It will be adjusted on a bimonthly basis according to market prices’. The current fuel surcharge of a Barbados/St. Lucia flight is US$6.25 per passenger each way, so with an 80 per cent loading on one of LIAT’s new ATR72-600 aircraft that’s a total roundtrip surcharge levy of US$680. The manufacturer describes this particular model as ‘by far the most fuel efficient’ for regional operation.

The flight distance from Grantley Adams to F.L. Charles airport is 104.21 nautical miles (nm). On the ATR website they list an example of a 250 nm point-to-point allowing a ten minute taxiing time, stating that the plane would use 1661 lbs or 753 kg of fuel. One gallon of fuel weighs around 6.7 lbs, so on a 104 nm flight would use 692 lbs or 103.33 gallons of Jet A1.

What does LIAT currently pay per gallon for fuel?

I suspect that there are many citizens who cannot understand why our Government is not passing on equitable savings in oil, petrol and diesel costs which of course would have the effect of reducing energy, food and distribution costs. Perhaps the mountain of national debt dictates that any reduction would lead to a substantial loss in duty and VAT revenue collection.

But the Barbadian taxpayer is the single largest shareholder of LIAT and our main foreign exchange earner is tourism. While the national marketing agency (BTMI) spends millions annually to try and recapture the lost intra-Caribbean visitor numbers, why is LIAT still allowed to gouge potential long stay arrivals by persisting to impose what can only be described as unjustified fuel surcharges. It is not rocket science to understand that lower airfares drive more volume.

Carriers like JetBlue have it down to a tea, with lead-in prices on the new Fort Lauderdale/Barbados route starting in April, as an example, for under US$300 return including all taxes.

You only have to follow social media sites to quickly understand that many regular visitors anxiously watch for seat sale offers from most of the major carriers that service Barbados to be announced, prior to making a travel and accommodation commitment.

As a passionate advocate of growing intra-Caribbean travel, I sincerely believe high airfares and ludicrous Government over-taxation have severely curtailed the demand for travelling within the region. But it is seldom too late to redress the situation and any administration has to finally accept that you can only extract taxes in just so many ways.

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16 Comments on “The Adrian Loveridge Column – Fuel Charge Adjustment”

  1. Anthony Davis January 11, 2016 at 5:40 AM #

    Well said Mr. Loveridge! You must get that into the head of the tax collector, because he believes that he and this Government can tax the country out of the deep hole it has gotten us into. All he dreams about is new taxes, and if people don’t have money to spend we’ll never get out of this hole.

    Like

  2. Hants January 12, 2016 at 12:45 PM #

    ON THE CUSP of its 50th Independence Anniversary celebrations, Guyana has been accorded yet another distinction, having been featured in the Business Insider UK’s ‘12 Emerging destinations you have to visit in 2016’

    http://www.nationnews.com/nationnews/news/76593/guyana-listed-emerging-travel-destinations-visit-2016#sthash.J1NMrwpM.dpuf

    Like

  3. Hants January 13, 2016 at 3:00 PM #

    FOUR YOUNG MEN are the island’s latest heroes and are being praised by two British visitors for saving their lifes

    http://www.nationnews.com/nationnews/news/76614/saved#sthash.CUd9NJLt.dpuf

    Like

  4. Hants January 13, 2016 at 3:12 PM #

    “In the wake of the unfortunate incident, Naru’s owners, Barry and Lisa Taylor, are calling for lights to be placed along the stretch of boardwalk.”

    Solar powered Lights is the solution.

    Like

  5. Gabriel January 13, 2016 at 3:14 PM #

    Jet A1 is kerosene to boot.

    Like

  6. David January 13, 2016 at 3:47 PM #

    @Hants

    What these young men did is commendable, why they did it is because of brassbowlery. They have refused to light up the Boardwalk because of the effect on turtle nesting. The result is that we have locals and tourists alike strolling at very high risk.

    Like

  7. Gabriel January 13, 2016 at 9:22 PM #

    Caribbean Airlines offered and the Guyana government accepted a proposal to identify with that country’s Jubilee celebrations of Independence.A specially designed logo will be placed on the CAL aircraft fuselage.Once upon a time Barbados would have been featured similarly on the Trinidadian carrier.

    Like

  8. Raw Bake January 14, 2016 at 12:03 AM #

    Of course the turtles could always find somewhere else to nest.

    We must protect supposedly intelligent humans who just cannot seem to resist walking in dark lonely areas at night. How could they know better? Is that not what they have always done?

    Brassbowlery indeed!

    Like

  9. David January 15, 2016 at 10:54 AM #

    This business about not lighting the Boardwalk because of the turtles is BS.

    This issue of a plane landing at 10:30PM and the last passenger clearing Customs at 1PM is BS.

    Like

  10. Peltdownman January 15, 2016 at 12:38 PM #

    Well it’s like this, David. Humans are not an endangered species. But they could still become one if they insist on walking the boardwalk in pitch darkness. There has to be a compromise with lighting, and there is “turtle friendly” lighting available. How about those businesses on the boardwalk getting together to pay for it? No doubt business would increase.

    Liked by 1 person

  11. Peltdownman January 15, 2016 at 12:41 PM #

    Adrian, airlines are not the only fuel gougers. The shipping cartel out of Miami to the Caribbean is still imposing a “bunker surcharge” on every shipment coming into Barbados. The thing is, when oil prices inevitably increase again, they will use the current surcharge as a base to start increasing it again.

    Like

  12. Vincent Haynes January 15, 2016 at 1:09 PM #

    Oil is now below USD30.00

    http://aje.io/z9lh

    Like

  13. caribbeantradelaw January 16, 2016 at 7:47 AM #

    @David, I like the suggestion which was made earlier about the turtle friendly lights. They are currently being used in several countries around the world, including Australia from what I understand. This is an option which can be explored. In the interim, tourists should be cautioned against walking along the dark sections of the Boardwalk. Let’s face it, while it should be commonsense not to walk in a dark area at night, many people who travel tend to take risks they won’t normally do in their home country, especially when they think they are coming to paradise.

    As for the waiting time in customs at GAIA, I myself have personally experienced that. I have noticed that recently the baggage carousals take a long time to start dispensing the luggage. The last time I travelled my flight had landed around10 pm and I was in baggage claim for almost an hour because the baggage took forever to be dispensed. There was also a huge backlog of people waiting to clear customs as a result. I am curious to know why we no longer seem to have the option of a nothing to declare line. Anyone knows why?

    Either way, I don’t have to emphasise how frustrating it was not just for myself but the tourists there.

    Like

  14. David January 16, 2016 at 8:01 AM #

    @Alicia

    Perhaps traditional media will be able to extract a response from Mark Cummins or even the minister of Tourism. This is not a difficult problem to solve, especially if life and limb are exposed for locals and tourists. Members of the BU household have been trapped in the long lines at GAIA as well, it is the most frustrating feeling after travelling from early morning to prepare for the journey. Interesting though are the red caps who are able to weasel their clients through the crowd. So backward and corrupt. It goes back to leadership, all players – government, unions et al after to agree to a win win.

    @Caswell

    See that you have made flyin fish and coucou today?

    Liked by 1 person

  15. caribbeantradelaw January 16, 2016 at 8:19 AM #

    @David, as the Trinis say “we like it so!”

    Like

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