With summer upon us, while many local residents are leaving the islands and tourists are coming in, airline prices are on the top of everyone’s minds. In the Turks and Caicos, we are somewhat at the mercy of the airline industry. We have been fortunate for the growing tourism market has fostered flights to international destinations, connecting us to major cities across the US as well as the UK. However, it seems that a tipping point has been reached. In order to grow the local tourism industry further, the flight connections also have to be increased.
Unfortunately, many challenges have to be overcome to accomplish this goal, but it is not an easy task. Cesar Campbell, CEO of the Turks and Caicos Hotel and Tourism Association, has been working steadfastly on these challenges for the past several years.
“When evaluating this point, one must see that the airline business itself has been facing great challenges; reducing their capacity of aircraft, schedules and cancelling routes in their network,” Campbell explains. That has proven to be the first challenge the local tourism industry and government have had to overcome. However, both Jet Blue and British Airways have recently announced increased routes to Caribbean destinations in Jamaica and the Dominican Republic, so what about the Turks and Caicos?
“Jamaica and the DR are mass tourism destinations, which gives them more security for full flights,” Campbell describes, “our focus is on the luxury and upscale market.” While airlines are cutting back, they are also looking for routes which are increasingly popular and can offer them full planes and with them secured income.
Although it is more difficult to secure flights due to the relatively smaller demand, due to the comparably small market offered in the Turks and Caicos, the government, tourist board and TCHTA are continuously involved in negotiations to bring more flights into the TCI.
“The next challenge lies in the marketing dollars required to bring in more airlines.” Campbell says airlines require a financial commitment from a country in order to bring flights to their destination. “For example, we have been speaking to Delta about bringing in a flight from Atlanta, but right now we just do not have the budget to subsidize the flights,” Campbell explains.
In the early nineties when American Airlines first started their regular service to the islands, they were guaranteed seats by the Turks and Caicos government. In 1993 the TCIG paid American Airlines over $200,000 to offset losses in the first half of the year due to this commitment. Today, American is enjoying positive income from their flights in and out of Providenciales, but to bring in more flights requires a financial risk on the part of other airlines and they are looking to share this risk with the local government.
European connections are held up by a more physical challenge, caused by the limitations of the existing runway in Providenciales. Currently, British Airways offers one connection from London to Providenciales, which stops in Nassau before coming into the TCI. The reason for this being the insufficient length of the current runway for a Boeing 767 to take off fully loaded. Campbell says, “BA lands in Nassau to unload passengers and does not completely fuel up in order to be at a minimum load capacity for take-off in Provo.”
The good news on this front is the anticipated airport extension. The government has already passed a bill to add a departure tax, from which the funds will be ring-fenced to pay for the planned airport upgrades, including the runway extension, which will allow for landings of any aircraft type.
According to Campbell, the new runway will open up many of possibilities, including direct flights from European cities. The TCHTA is hoping to bring in direct flights from interesting European markets such as France, Italy and possibly Germany as well as additional British Airways flights from London. Campbell says they have been negotiating with BA for some mid-week flights, which will give much greater flexibility to travelers as well as encourage some more business travelers in and out of the TCI.
Campbell is hopeful the increased routes will not only bring in more tourists to the islands, but also offer more competitive ticket prices. “Right now there is not much competition for our routes, so the prices remain somewhat high,” Campbell says.
The airport renovation project is scheduled to start in the next few months and Campbell is hopeful at least the runway extension will be complete sometime next year. “Hopefully this time next year we will have the new runway and be able to open up these possibilities for new flights,” Campbell said. Since the amount of people in the world that can afford a luxury vacation has shrunk over the last year, an increase in paying tourists and business travelers from regions that have typically not considered the TCI as a destination due to the lack of flight connections, will be a key driver for the success of most businesses in the TCI.
One last current challenge and interesting local trend is last minute travel. Airlines base their flight schedules heavily on their predicted load factors. Where the TCI has enjoyed a lot of preplanned travel in the past, due to recent global financial market challenges, people are tending towards more last minute travel deals. According to Campbell, this makes it difficult to convince airlines to bring in flights when they cannot predict the demand with any sort of certainty.
“One good sign for all of us, is the recent addition of a third American Airlines flight daily from Miami,” Campbell says this is a positive indicator that the market is still strong and the demand is increasing.
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