Govt pumps $7M in subsidies into BVI Airways
Making the announcement at a press launch in the offices of BVI Finance in Road Town, Tortola, Virgin Islands was Premier and Minister of Finance Dr The Honourable D. Orlando Smith.
He said the service would provide direct flights between Beef Island and Miami starting in the fall of 2016.
According to the Premier, the VI Government as the sole local shareholder is investing a sum of $7 million, which Government hopes to recoup.
“Our investment in this venture will be $7M over a three year period with the expectation that this will be recouped once the venture is successful, as we fully expect it to be,” he said, saying, however, there are no guarantees that the 80 plus seating aircraft will be full on all flights.
“It is an investment being made with the clear understanding that without relatively easy and reliable air access to and from the British Virgin Islands now, we will struggle to provide for the travelling needs of our people, to bring our visitors to the territory and to remain competitive in the main economic sectors of tourism and financial services,” he said.
He added that even though there is no guarantee, the money is to get the investment up and running and will be recouped through the revenue sharing arrangement between government and the airline.
Increasing passengers- increasing woes
It was noted that a majority of visitors from Miami are finding it increasingly difficult to get here due to the inadequacy of air access, largely precipitated by the departure of American Eagle from its hub in Puerto Rico.
“This is compounded by the inadequate length of the runway at the T.B. Lettsome International Airport. We know what the result has been: a severe reduction in flights into the BVI, increasing difficulty in accessing and leaving the BVI - both for ourselves and our visitors - and high ticket prices,” he pointed out.
According to the Premier, early in 2015 he pledged to the people of this territory that within his tenure, in the next electoral cycle, his government would solve the problem of air access to and from the Virgin Islands.
“Today, it is my special pleasure to announce that we have made good on that promise of direct flights to and from the United States mainland, by partnering with BVI Airways to have direct flights between the Terrance B. Lettsome International Airport and the Miami International Airport,” announced Premier Smith.
“Direct flights between Miami and the BVI will commence in the Fall of this year. The Fall may sound a long way away, but as our partners will explain shortly there is a lot of preparation required to get those planes to fly full to and from Miami,” he said.
Lack of air access means loss of tourism dollars
The Premier said that for some time now, even before the cessation of American Eagle flights to the VI, the territory has struggled with air accessibility issues. “Visitors to our shores are spending more time to get here, often having to overnight in places in which they have no interest and at times arriving without luggage which is, for them, most frustrating.
Needless to say, this is an unnecessary loss of revenue to the BVI economy and a recipe for disaster in our tourism industry,” he said.
He noted that it should concern persons that the VI’s competitors have much better air access, with direct flights to and from major international destinations. “And it certainly does not help that that sleeping giant, Cuba, has awakened from its long slumber!”
The Premier said that since the cessation of flights by American Eagle to the VI, the territory’s air access problems have gotten worse. “The time lost and inconvenience faced by having to take ferries or smaller feeder flights to get to the BVI have caused many visitors to choose other destinations in the Caribbean and Latin America, thereby undermining our competitiveness,” he said.
Investment to fuel high-end tourism - Bruce F. Bradley
One of the investors and Directors of BVI Airways, Bruce F. Bradley, said the airline which will be up and running in another nine months will offer something much better than what is available today.
“We are very excited to offer competitive, convenient and luxurious alternative to what is there today. We think this will help enormously in fuelling high end tourism as we have seen with many of the neighbouring Governments that have made big investment in airlift and the impact it has had in a very short space of time,” he said.
Things seem to take long here
Another of the Directors, Scott A. Weisman said the investment is a big step. “When we first made our investment in BVI Airways about a year and a half ago this was always part of the idea…to leverage our turboprop business with our [jet] business to bring direct service into Beef Island,” he said.
“It has taken much longer, as things seem to take longer here, but in general we are delighted that we are finally here,” he said, showering the Premier and his Ministers and officers with thanks. He added that the regulatory approvals and marketing saw the process dragging on.
“Obviously we don’t want to fly airlines empty. We want to make sure the business is profitable; we want to return capital back to the Government. We want to make sure we have the ability to provide the best service possible for the most rational price,” said Weisman.
According to Weisman, the project required the investors getting approval from London and Washington and this process took time also.
Many of the ferry companies have long called on Government to subsidise their operations between the VI and the USVI, and are calling it unfair for taxpayers to underwrite a foreign airline and not do the same for local ferry operations.
We tried to reach locally owned VI Airlink to confirm whether they have received any Government subsidies, but these attempts were futile.
See our previous article here:
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40 Responses to “Govt pumps $7M in subsidies into BVI Airways”
My only question is. What type of aircraft proposed for this route and the safety and maintenance records for same. But great initiative on bvo govt part
Even if that changes, ferries are crucial to the BVI the way air could never be.
Kind of knocks a hole in the reason for needing a longer runway at $400,000,000 dollars.
Be interesting to see what the money saved by taxing people with the new NHI tax will now be spent on as we can now ditch the runway project.
Again the better option would have been to focus on the uninsured then charge a health tax for the already insured. Leave them with their insurance.
Do you know what 7% of everyone earning in the BVI is?
I believe the intention is to have NHI pay for health, keep the $46Million saved and spend it on an airport that is has now been shown we do not need to get the direct flights they said it was needed for.
They will now invent another reason.
However I seriously question why a local company like VI Air Link could not have been considered. Why not make that investment in a local airline for them to get some bigger planes to do that EIS-MIA run.
after. Dr. u need too come better. It have order airlines with intrest we didnot take them how come now with this airline ???????? Come on Dr.!!!!!!!!!!!!!
Let us hope that the ministers, relatives and supporters of the NDP do not abuse the airline or else we will have to pay for their abuse.