REDjet, Protection And The CSME
In the Revised Treaty of Chaguaramas, at Article 134, Caribbean Community (CARICOM) governments made it clear that "efficient, reliable (and) affordable transport services" would be essential if the region was not only to theoretically transform the Community from a free trade and functional cooperative group to a single market and economy, but to consolidate the process.
At Article 135 (1)(f) of the same treaty, Caribbean governments pledged "the removal of obstacles to the provision of transport services by nationals of the member states ... ."
'Nationals', in this context, refers not only to individuals, but corporate persons registered and resident in member states of the Community.
We draw attention to these facts, given the ongoing dispute regarding the operation of REDjet, a Barbados-registered and domiciled low-cost airline, whose Irish principals, and the Barbados government, believe - unless they have very recently changed their minds - are being discriminated against by Jamaica and Trinidad and Tobago.
We must confess that in the absence of clarity on the part of Kingston and Port-of-Spain, it all smells rather fishy to us, and in that context ... we would call into question our Government's declared commitment to the free market and competition, as well as the operation of CARICOM as a genuine single market.
CARICOM has, of course, struggled with a coherent and consistent aviation policy for the nearly 40 years that the Community has been in existence. Indeed, Caribbean nationals often complain of the logistical difficulties and high cost of travelling within the region and the limits these have placed on the conduct and growth of business, including tourism.
The rigidities that regional governments maintained of air services were largely to protect state-owned carriers, such as Air Jamaica and Caribbean Airlines (CAL), the Trinidad and Tobago carrier that used to be called BWIA.
But these carriers lost huge amounts of money, which the taxpayers of most of the countries can no longer afford. For example, in the decade until it was finally unloaded just over a year ago, Air Jamaica cost Jamaican taxpayers more than US$1 billion, or nearly J$90 billion.
This brings us back to the REDjet issue. When Air Jamaica was finally divested, it was acquired by CAL. Under the arrangement, the Jamaican Government received 16 per cent of CAL, but is insulated from capital calls. There is, on the face of it, reason for Kingston and Port-of-Spain to protect CAL.
REDjet, which operates two MD82 aircraft, first wanted to set up in Jamaica, but was stonewalled. It moved to Barbados, which has no state-owned carrier.
Several months ago, REDjet announced it would inaugurate its cut-rate flights to Jamaica, Trinidad and Tobago, and Guyana, but has had regulatory difficulties in Kingston and Port-of-Spain.
Now, Jamaica and Trinidad and Tobago say they have safety concerns over REDjet, which the airline has to address before receiving the green light. These concerns are new to the company and the Barbadian authorities.
If these countries have genuine safety concerns, it is in the interest of the region that they be resolved. But the process has to be transparent, which this has not been.
Indeed, it is behaviour like Kingston and Port-of-Spain's that has helped to drive the region's scepticism about the usefulness of CARICOM.
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June 19, 2011