flybyguy
Posts: 1415
Joined: Sun Jun 27, 2004 12:52 pm

Latin American, Caribbean, And S. Pacific Airlines

Wed May 04, 2005 11:42 am

Well in light of the Mauritius order of several brand new A340s and the following article:

http://www.bbc.co.uk/caribbean/news/...050408_clarkeairlines-merger.shtml

It seems to me that something is terribly wrong. Places like Jamaica and Barbados in the Caribbean which boast tourism industries that are worth billions, while the airlines that serve these destinations are probably have never seen a single day of glory since their inception.

What's wrong with this picture? On the one hand you have airlines like Air Tahiti Nui and Air Mauritius operating from tiny island nations that are expanding and doing well for themselves and then you have airlines like Air Jamaica where even though an avalanche of American, Canadian, and English tourists come in year after year to Jamaica they have sparsely turned a profit privatized or state-owned.

Comparable companies like Groupo Taca in Central America has also been doing pretty well with expansion and development.

I doubt that the dismal performance of Caribbean air carriers has much to do with competition because Latin America, Mauritius and Tahiti are open to foreign carrier services as well.

I would suspect it has very much to do with poor management and an even poorer work ethic in employees (I've experienced that first hand on a vacation of mine) of Caribbean carriers that have lead to their mediocre financial performance.

*I am aware Mauritius is in the Indian Ocean.
"Are you a pretender... or a thoroughbred?!" - Professor Matt Miller
 
PanAm747
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RE: Latin American, Caribbean, And S. Pacific Airlines

Wed May 04, 2005 12:05 pm

The problem in the Caribbean is competition - most travellers going to Jamaica are going to want frequent flyer miles, and considering AA's hold on the Caribbean, other airlines are not going be able to pull from that. I mean, if you're a mileage holder with any airline that flies to the caribbean, which would you choose? A.netter's might do BWIA for the fun of it, but I doubt the average beachgoer would do that. That is NOT to knock BWIA, just a statement of the average passenger's preference.

Who competes with Air Tahiti Nui and Air Mauritius? Not a whole lot...from LAX, there's Air France and Air New Zealand, and Hawaiian flies to HNL. But for other direct routes, a local airline is needed. Same with Mauritius - Air France and SAA (Kenya Airways?) fly there, but not a large number of flights.

I don't know if Caribbean airlines will ever stand a chance in the United States - there's just simply too much competition. TACA is a good model of how to unite, but there might just be too much leisure traffic to the Caribbean.

Any other thoughts?
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2travel2know
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Joined: Sun Apr 10, 2005 7:05 am

RE: Latin American, Caribbean, And S. Pacific Airlines

Wed May 04, 2005 12:06 pm

First of all, I think Air Tahiti Nui and Air Mauritus don't need to fly to that many destinations as a Caribbean Airline such a JM or BW should.
Another reason is that those Air J and Bwee sometimes have to provide air transportation among the islands for strategic - not purely commercial - reasons.
Then I guess Air Mauritus sells enough seats to wholesalers in each of their flights well ahead of time to provide a break-even point, maybe JM and BW are not doing that as good as Air Mauritus.
It's really strange when one compares JM and BW to Air Mauritus, specially since the caribbean airlines could operate hubs while MRU hardly qualify as a hub airport.. Hub to whom? PER, TNR, MPM, JNB, SEZ?
I don't work for COPA Airlines!
 
flybyguy
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Joined: Sun Jun 27, 2004 12:52 pm

RE: Latin American, Caribbean, And S. Pacific Airlines

Thu May 05, 2005 9:19 am

Quoting 2travel2know (Reply 2):
Another reason is that those Air J and Bwee sometimes have to provide air transportation among the islands for strategic - not purely commercial - reasons.

Your saying that certain Caribbean airlines must fly to places as a courtesy? Even when they are privatized?
"Are you a pretender... or a thoroughbred?!" - Professor Matt Miller
 
Speedbird2155
Posts: 684
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RE: Latin American, Caribbean, And S. Pacific Airlines

Thu May 05, 2005 5:11 pm

You've all hit on various reasons why Air Jamaica and BWIA can't be compared with Air Mauritus and Air Tahiti Nui, but the picture in the Caribbean is very complex. Caribbean carriers simply do not have the resources to compete against carriers such as AA, US, DL, BA etc who can draw on passengers from various points and not just one metropolitan area, such as JFK. JM and BW don't have networks in the US and Europe to do this and so rely heavily on Caribbean nationals returning home and others from the JFK, MIA, LHR/LGW and similar large cities that they serve. AA, US, BA and others can pull passengers from other areas and connect them onto their Caribbean services.

Also, the Caribbean sees a fair amount of competition both from the US and UK. Air Mauritus and Air Tahiti Nui, doesn't seem to have the same level of competition. From the US, in addition to the regional carriers, you have AA with a large presence and numerous services to many islands, in addition to American Eagle connections via SJU, US with an increasing presence, DL and CO. From the UK - BA, VS, BD and several charters.....on a recent trip to BGI, in addition to the 3 scheduled carriers, there were about 4 charter flights on the ground at the same time. Combine this with the FF programmes as mentioned by PanAm747, and Caribbean carriers don't have much of a chance to compete fairly.

Quoting 2travel2know (Reply 2):
Another reason is that those Air J and Bwee sometimes have to provide air transportation among the islands for strategic - not purely commercial - reasons.

This isn't really the case for JM. BW however does provide links for various reasons, partly based on historical link, partly on maintaining commercial links, partly for political reasons, partly for commercial reasons....and the list could go on. BW could not survive solely on serving the POS/TAB market and is very dependent on the tourist traffic to other islands, particularly BGI. This links between the islands often tend to be part of the international flight eg LHR-BGI-POS, where quite often lots of passengers leave in BGI and if BW didn't sell the BGI-POS leg, the flights would be relatively empty on that segment. the POS market is very dependent on the VFR market and this largely plays out in the December - March period around Christmas and Trinidad Carnival. This all results in a very complicated market for JM and BW to serve.

Quoting Flybyguy (Thread starter):
an even poorer work ethic in employees

I take issue with this statement as I've encountered worse service from American carriers, particularly AA than I have from JM or BW. I won't say that JM or BW has the best service in the world or that there aren't things that their staff need to improve on, but to make such negative statements about the work ethic of these employees is uncalled for. I know first hand about the work ethic in the region having been born there and lived there for many years and yes, there is room for improvement, but it's no worse than lots of other places. However, when asked to, Caribbean people tend to be very hard working and dedicated employees.
 
TACAA320
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RE: Latin American, Caribbean, And S. Pacific Airlines

Thu May 05, 2005 10:29 pm

Quoting 2travel2know (Reply 2):
Another reason is that those Air J and Bwee sometimes have to provide air transportation among the islands for strategic - not purely commercial - reasons.

Can you be more specific pls?
'Science without religion is lame, religion without science is blind'. Albert Einstein
 
Xkorpyoh
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RE: Latin American, Caribbean, And S. Pacific Airlines

Thu May 05, 2005 11:08 pm

Apart from the lack of competition, Is it safe to say that Mauritus and Tahiti cater to a more afluent travelers and that they can charge higher fares?! I know BGI also targets high end tourist but not as much as the first 2.
 
2travel2know
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RE: Latin American, Caribbean, And S. Pacific Airlines

Thu May 05, 2005 11:29 pm

Quoting TACAA320 (Reply 5):
Can you be more specific pls?

BW POS > SJO > POS
I don't work for COPA Airlines!
 
Caymanair
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RE: Latin American, Caribbean, And S. Pacific Airlines

Fri May 06, 2005 2:23 am

Caribbean airlines (as ive said time and time again) are very complicated things. THEY ARE NOT BUSINESSES!! They were never intended to be businesses and have never been treated as one. They are services to the people. They deal with stiff competition, lots of politics, and millions of West Indians!

Quoting Xkorpyoh (Reply 6):
Apart from the lack of competition, Is it safe to say that Mauritus and Tahiti cater to a more afluent travelers and that they can charge higher fares?! I know BGI also targets high end tourist but not as much as the first 2.

It depends. Air Jamaica may not carry many passengers that pay high fares, but any affluent Jamaican will only fly on AJ, but will never pay. Politics again.

Quoting TACAA320 (Reply 5):
Quoting 2travel2know (Reply 2):
Another reason is that those Air J and Bwee sometimes have to provide air transportation among the islands for strategic - not purely commercial - reasons.

Can you be more specific pls?

Look at Cayman Airways operating GCM-CYB, five daily, once on a 737-200. NEVER profitable, even with a single daily 737. But can they end it? No. Politics dictates.

Quoting Speedbird2155 (Reply 4):
I take issue with this statement as I've encountered worse service from American carriers, particularly AA than I have from JM or BW.

Agreed. AJ, BW, and KX all provide much better service to the West Indies than AA. Once again it brings me back to the point that Caribbean carriers are services. They charge low fares, pay employees much more than they should, give nationals lots of assistance free of charge, provide hundreds of job even though they are over staffed, and provides transportation for government.
 
MGA
Posts: 717
Joined: Wed Mar 02, 2005 4:58 am

RE: Latin American, Caribbean, And S. Pacific Airlines

Fri May 06, 2005 2:50 am

Quoting Caymanair (Reply 8):
Look at Cayman Airways operating GCM-CYB, five daily, once on a 737-200. NEVER profitable, even with a single daily 737. But can they end it? No. Politics dictates.

I think Air Jamaica and BWIA Are private right? If so, They have no obligation to serve a certain country like example EL AL to USA for obviuos reasons (and buy boeing). Jamaica and Barbados are not depending much from anybody right now. These airlines have to focus On key O&D markets, Like Air Tahiti Nui to LAX and JFK. Air Jamaica is not going to start to fly to Chicago because its Big an pretty. Also, you cant compare to TA... Most of TA traffic is People going back home or visit relatives... Plus they offer a close to LCC service with Extremely low Prices... The only main tourist Attraction for them is SJO.

MGA
Que viva el guaro, el dinero y los aviones!!!
 
2travel2know
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Joined: Sun Apr 10, 2005 7:05 am

RE: Latin American, Caribbean, And S. Pacific Airlines

Fri May 06, 2005 3:33 am

Airlines like Air Jamaica, Cayman Airways and BWIA focus on incomming tourists and islanders flying between USA/Canada/UK and the islands.
Even their schedules reflect that!
Then there are airlines like Universal Guyana and Surinam Airways which are mostly O/D VFR air transportation.
Those airlines hardly ever notice that there are countries with big cities south of their "islands" where they could find passengers looking to travel north to USA/Canada/UK/NL. They don't quite think HUB.
Where would Air Jamaica, Cayman Airways, Surinam Airways and BWIA find passengers to keep their northbound flights with fair load factors? Centralamerica, northern Southamerica and for Surinam / BWIA even Brazil and maybe Argentina.
I don't work for COPA Airlines!
 
Caymanair
Posts: 433
Joined: Mon Apr 05, 2004 4:53 am

RE: Latin American, Caribbean, And S. Pacific Airlines

Fri May 06, 2005 10:06 am

Quoting MGA (Reply 9):
I think Air Jamaica and BWIA Are private right? If so, They have no obligation to serve a certain country like example EL AL to USA for obviuos reasons (and buy boeing). Jamaica and Barbados are not depending much from anybody right now. These airlines have to focus On key O&D markets, Like Air Tahiti Nui to LAX and JFK. Air Jamaica is not going to start to fly to Chicago because its Big an pretty

Even though its a private company, don't ever think for one second that the governments would allow them to drop certain routes or reuduce certain frequencies. Whether the airline is "officially" private or not, they still must serve the original purposes.
 
LAXintl
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RE: Latin American, Caribbean, And S. Pacific Airlines

Fri May 06, 2005 10:25 am

Dont know about the ownership structure of Air Mauritius, however Air Tahiti Nui is not a fully private venture.

Air Tahiti Nui is partially owned by the government of French Polynesia, with other local companies strongly encouraged to take shares in the carrier. The airline has carefully been protected from competition, by having both AOM and Corsair withdraw from serving Tahiti, and also via commercial agreements with Air France. Its aircraft acquisitions were partially subsidies by French tax payers as they were destined to the countries overseas territories.
Competition to Tahiti is very limited, and fares are high to the islands. While the company did make its first profit in 2004, the carrier would be supported and subsidized either way as being an important part of French Polynesias tourism industry, and significant employer.

Air Mauritius also sits on a little island with limited outside competition. The market is structured so that the carrier can enjoy strong market share and yields across much of its network while facing only a handfull of competitive threats.

The situation the Caribbean airlines that Air Jamaica and BWIA find themselves in is quite different. The carriers are located in the middle of a very busy and cut throat market. Ten's of airlines serve both Jamaica and T&T. Airlines like AA with their massive presence and resources run circles around the smaller national airlines.
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