RedJet CEO Ian Burns says regional airlines are inefficient

POSTED: 09/21/11 1:17 PM

St. Maarten – “The major hurdle travelers in theCaribbeanencounter are the airlines. They are inefficient and they maintain costly practices. It is essential for airlines to listen to their consumers and they are now finally starting to do that.”

Ian Burns, the CEO of Barbados-based low cost carrier RedJet, took the challenge of overcoming hurdles and making intra-Caribbean travel work head-on yesterday afternoon at the CTO state of the Industry conference. RedJet started operation in April of this year and is now servicing Barbados, Trinidad and Tobago, Guyana, Jamaica, and Antigua. Services to other Caribbean destinations like St. Kitts and Nevis and St. Lucia are in the pipeline. Fares start as low as $9.99 before tax. By this pricing system, RedJet wants to make clear to its customers what they are paying for. Burns said that, since RedJet started operations earlier this year, air fares by regional carriers had dropped by 60 percent.

“We have an 88 percent load factor and we have experienced 83 percent growth in the first three months,” he said.

“It is amazing what competition can do.”

Burns said that regional governments are also part of the hurdles that make traveling in the region cumbersome. He mentioned taxes people cannot afford, and outdated service agreements.

“We have to check the existing agreements with Caribbean Airlines and Liat,” he said.

“Furthermore, it is ridiculous to tax between $30 and $55 on domestic flights. We see regional airlines with all the bells and whistles of a global carrier.”

RedJet is not going there, Burns said later on.

“We do not drive in luxury cars. Our offices are in a warehouse and we have the cheapest tiles we could find on the floor. We give the advantage to our customers.”

In the end, Burns said, all carriers face the same challenges in terms of taxes, and the cost linked to aircraft, fuel, safety and taxes.

“The difference is in the way you run your business,” he said.

Brian Challenger, the CEO of Liat dismissed the notion that his company is operating in a protected environment.

“We have to compete with Caribbean Airlines, American Eagle, RedJet and Winair,” he said.

The challenges Liat faces are high operating cost due to the fact that the airline operates in a small and fragmented market, the high vulnerability to natural disasters. And the fact that it has to compete for pilots on the global market. Many pilots accept better paying jobs with oil companies on the African continent.

To improve the situation, Challenger said, Liat is looking at ways to cut costs, and at inter-airline cooperation. Building a more attractive Caribbean product with festivals and shopping attractions would also benefit inter-regional travel, he said.

Winair managing director Edwin Hodge pointed to taxation as the main hurdle.

“Sometimes 83 percent of what we charge our customers is taxes,” he said. Hodge also said that the public needs to be educated about the intricacies of airline travel.

“Closer does not always mean cheaper,” he said.

“We have to charge what the market will bear without operating at a loss.”

The general manager of the Sonesta Maho Beach Resort, Armando Pizzuti, embraced the approach Ian Burns presented.

“We need more people like you,” he said.

Pizzuti said that airlines need to listen to the consumer for everyone’s benefit.

 “We need to keep the Caribbean together. There are 40 million people living in the region and we must enable them to travel.”

Did you like this? Share it:
RedJet CEO Ian Burns says regional airlines are inefficient by

Comments are closed.