Airlines Discuss ‘Taxes Of The Caribbean’

BOGOTA—In a discussion on aviation competitiveness in the Caribbean, focus of a panel began with one issue: taxation.

In an example provided by Turks and Caicos-based InterCaribbean Airways, in transiting between two unnamed Caribbean countries via another, taxes can amount to greater than $300.

“If the taxation portion of the journey exceeds 100% of the ticket cost, then folks are going to travel only because they have to,” said CEO Trevor Sadler at Routes Americas 2024 here in Bogotá. Dubbing it “taxes of the Caribbean,” he added, “it’s a reality that we continue to present to every government that there is money from tourism or visitors that come from areas outside of simply taxing the journey to travel.”

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Airports should represent an opportunity to facilitate tourism and business travel, he told those gathered at the event, “and not be the cash cow for any given country.”

The remarks were tempered by a distinction provided by Airports Council International (ACI)—the difference between taxation that applies to air transport and the airport charges, explained Rafael Echevarne, ACI Latin America and Caribbean director general.

“At the end of the day, someone has to pay for the airport, for the infrastructure,” he said. “We actually have a lot of pressure in terms of development of infrastructure … that costs money.”

While acknowledging a need for reasonable taxation and calling for more collaboration with government, IATA's Peter Cerda, regional vice president for the Americas, said pent-up demand could see travelers seek other destinations. Airfares from the Caribbean can be comparable to flights to both Miami and Dubai, he cited as one example. And, as the anxiety of having to travel and therefore wanting to stay close dissipates, competition will become only more aggressive, he said.

“We want the industry to grow, the airports have to grow … but we don’t want to outbid ourselves to another region,” Cerda said.

Another factor, panelists noted, can be a difference in seeing fees and taxes either being well utilized to achieve improvements, or having those investments be unclear. Exchevarne said, “It comes down to proper transparency.”

Windward Islands Airways International (Winair) proposed piloting different solutions as a way forward, outlining a recent test with its home airport of St Maarten. In the test, so-called day fares up and down the island set taxes at $10 rather than $67, CEO Hans van de Velde said. Within weeks, he said, the airline had “hundreds of bookings,” creating extra traffic.

“We need to be bold to do some experimenting, to show the governments and the airports that volume can compensate the higher prices,” de Velde said.