IATA Americas Vice President: Taxes Restrict Caribbean Air Transport Market

While the Caribbean air transport market is growing, high levels of taxation on airline tickets prevent the market from reaching its full potential, according to IATA Americas Regional Vice President Peter Cerda.
Cerda told Aviation Week that there were 31% more available seats in the Caribbean, including flights to and from the region from around the world, in 2024 compared to 2014. In the first eight months of 2024, Caribbean traffic increased 7.7% over the same period in 2023, according to IATA.
But the region could be growing more, Cerda said.
U.S. and Canadian carriers, which together make up 74% of Caribbean airline traffic, “continue to look at the Caribbean as an important destination for these airlines to continue to grow,” Cerda explained. “Aircraft utilization is actually very good, because you can get the airplane to the islands and back relatively quickly. So the opportunities are still there.”
But the Caribbean is an expensive market to serve. “What we have been mentioning to these governments is they need to remain competitive in terms of cost and taxation,” Cerda said. “There are periods of time in the year—the Caribbean high season—when it's more expensive to fly from the U.S. to the Caribbean, in some cases, than it is to fly from Miami to Dubai. A lot of it has to do with the amount of taxes and fees that are added onto the ticket.”
He added: “The important thing is whether the money from taxes is being reinvested. Do you need to impose tourism taxes for flights into a country that is purely focused on tourism? What's unfortunate about taxing tourists who come to islands to spend money in the local economy is that it’s somewhat counterproductive.”
If the airline ticket taxes are high and deter visitors, those potential tourists will not spend money in the island country imposing the fees, Cerda said. And if tax money “goes into the central coffers, it's not being actually reinvested into airports or aviation.”
Peter Cerda will be taking part in the Routes Americas 2025 conference, taking place from Feb. 10-12 in Nassau & Paradise Island, Bahamas.