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Posted on Mon, Jan. 01, 2007

Airlines Competition flies high in the Caribbean: new carrier Caribbean Airlines

One of the biggest challenges facing regional carriers in the Caribbean is competing with low-cost and big-name foreign airlines.

Caribbean Airlines may be a new version of BWIA airlines, but it still faces the same competitors: the dominant American Airlines, charter companies, and competition from local discount carrier Spirit Airlines.

That's because carriers know the region is a profitable one, especially because of increased tourism since Sept. 11, 2001 analysts say.

''The yields -- the fares you can get per mile -- are very strong in the Caribbean,'' said aviation consultant Michael Boyd, president of the Boyd Group in Evergreen, Colo.

He points out that the new airline is going up not just against American, the dominant carrier, but now Miramar-based Spirit, which has expanded service from Fort Lauderdale to the region recently.

''US Airways had a plan that never took place, but it's an indication that airline planners see strong revenue in the Caribbean,'' he said, adding Delta Airlines has expressed interest in adding more flights there.

American Airlines spokeswoman Martha Pantin said the airline has seen ''increasingly stronger'' traffic since 2001 and looks forward to continued growth there.

''For over 35 years, we've had a strong presence in the Caribbean,'' said Pantin. American has more than 25 daily flights from Miami to various Caribbean islands and almost 20 from New York's JFK International Airport. It has at least another 100 daily flights from its San Juan hub, most from its American Eagle service that runs between islands.

''We've had strong competition not only from U.S.-based but Caribbean-based carriers,'' she said, adding that competition has always been a part of their business.

Its U.S. competitors include Spirit Airways, the low-cost carrier that five years ago just served San Juan.

To date the airline serves a dozen cities in the region and has received permission to begin flights to Port-au-Prince, Haiti, within months. It does fly to Jamaica but not to Trinidad.

Spirit has been awaiting government approval to fly to Caracas, Venezuela, President Ben Baldanza said in a recent interview, adding it has also requested permission to begin flights to St. Maarten.

''We believe the markets we've added to date have proven the Caribbean region and Latin America will absolutely respond to a well-structured, low-fare, good service airline,'' said Baldanza, adding the airline's goal is to provide low-cost service especially for Caribbean people who now live in South Florida.

Charter companies like New York-based TravelSpan are also popular with the Trinidadian community in South Florida, running flights several times a week from Fort Lauderdale to Port-of-Spain.

In the face of such competition, industry analyst Robert Booth feels the Caribbean's national airlines need to create a regional carrier.

''They need economies of scale, they need to get together on aircraft acquisition and financing,'' Booth, president of Miami-based AvMan, said in a e-mail.

''I believe Caribbean Airline could be the beginning,'' he added.