Last week BWIA and LIAT announced a strategic alliance that could be a significant step towards the goal of "Uniting the Caribbean by Air and Sea", one of the objectives of the Association of Caribbean States (ACS).

The BWIA-LIAT agreement provides for seamless passenger transfer between their respective route networks, code sharing, joint ground handling facilities in Barbados and joint bulk purchasing of replacement parts and food services. It will benefit both airlines and the countries that they serve, especially those of the Organisation of East Caribbean States (O.E.C.S). It is also a good example of the kind of cooperation that is needed among the airlines of the Greater Caribbean.  

Over the past ten years the Caribbean Tourism Organisation (CTO), the CARICOM Secretariat, the Caribbean Association of Industry and Commerce (CAIC) and the ACS have been making efforts, both separately and jointly, to promote inter-airline cooperation.   Studies have been done, meetings held, and committees formed.  A 1993 CTO/CAIC study estimated potential savings of up to $65 million per year from cooperation in the Miami-based operations of the regional airlines. This would include joint check-in and baggage handling, inventory rationalisation, bulk procurement of fuel and spare parts and catering and insurance, and joint equipment monitoring and maintenance and staff training.

The cooperation model has always been TACA, the highly successful group of Central American Airlines. The study envisaged the formation of a Caribbean International Airlines (CIA or LAIC, the Spanish acronym) operating like the TACA Group that would include the principal airlines of the Greater Caribbean. The ACS would be the facilitator and a regional air transport agreement would provide the legal framework. 

But the CIA never materialised. In 1997 a more modest effort at cooperation was attempted when BWIA and Air Jamaica signed a Memorandum of Understanding for cooperation in purchasing, flight operations, customer service, maintenance and engineering, information services/administration and marketing and sales. Long term cooperation in code sharing and cross utilisation of aircraft was also envisaged. This, too, failed to bear fruit.

A meeting of senior airline executives convened by the ACS in May 1998 noted that little effective cooperation among regional airlines had been achieved.  A report to the meeting observed that airline CEOs, as leaders of independent privatised entities, would have to determine corporate strategy as they see fit and their focus was on the development of relationships with extra-regional airlines.

The BWIA-LIAT link announced last week could signal a change in this trend, under pressure from the decline in business resulting from the recent contraction in international air travel. But in the context of the needs and opportunities for airline cooperation, it is still just a small move.

The ACS Plan of Action calls for a meeting, later in 2002, of airline CEOs, Civil Aviation Authorities the CTO and regional and national tourism agencies of the Greater Caribbean. The objective is to come up with a concrete action plan for the development of intra-Caribbean air links and multi-destination tourism within the region. To ensure practical results this meeting will need to be carefully planned, with participants sharing a vision of what is possible and a willingness to cooperate for mutual benefit.

Professor Norman Girvan is Secretary General of the Association of Caribbean States. The views expressed are not necessarily the official views of the ACS. Feedback can be sent to mail@acs-aec.org.

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January 12, 2002