Island Air pledges to continue to service the Sister Islands for a further 15 years

Island Air Operations Manager Marcus Cumber

Thursday, August 26, 2004

Island Air Operations Manager Marcus Cumber vows that the family-owned airline will continue on despite what he believes are anti-competitive practices from the Government that threaten company’s profitability.

Since early this year, Island Air has been competing with Cayman Airways’ Cayman Express with regularly scheduled flights to the Sister Islands, routes it had serviced alone since 1991.

Mr Cumber believes that the relationship of Cayman Express with the Cayman Islands Government makes the competition inherently unfair.

“We are being pushed out of business not because we are an inefficient airline,” he said. “We are being pushed out of business by an inefficient airline and the government that subsidises it.

“This is the public sector trying to push out the private sector. They have dismantled monopolies with the Caribbean Utilities Company (CUC) and Cable & Wireless, but there is still a monopoly on the runway.”

Islands Air has had its share of difficulties this year. In January, the company had to settle a long-standing dispute over back landing fees by paying $500,000 to the government.

Mr Cumber said Island Air had tried to increase fares to offset the landing fees it was forced to pay on a regular basis, but was prevented from doing so by the Air Transport Licensing Authority (ATLA).

“We have been extremely competitively priced as an airline,” he said, “In 1991 a roundtrip to a Sister Island was US$122 and in 2003 that was US$132.

“When we owed the government for landing fees, we asked to increase our fares by $5 so we could make quicker repayments. However they refused us. As a public company, Cayman Airways obviously has a closer relationship with ATLA and can changes prices much more easily.”

In response, the Civil Airport Authority CEO and Acting ATLA Secretary David Fredrick denied the ATLA had operated unfairly.

He said: “I do not know what someone is trying to prove. If someone comes to us with a legitimate request for a fare increase, then it will be treated on a level playing field. The CAA and the ATLA treat everyone equally.”

He went on to say: “Under the law, we are not obligated to give any reasons in public as to why we do or do not grant fare increases.”

Director-General of the CAA Richard Smith reinforced the government’s position that all airlines are treated equally: “All airlines are required to pay landing and parking fees as well as any counter or facility space that they rent within the airport facility. The CAA does not grant any exemptions to any airlines.”

Even though Cayman Airways might technically have to pay these fees, Mr Cumber contends that they get those fees back in the form of the subsidy from the Government.

As a result of the Island Air’s financial problems, it has had to return its leased 19-seat DeHavilland Twin Otter aircraft and cut its staff from 35 to 17 people because the competition with Cayman Airways caused its load factors to decrease.

Despite the problems, Mr Cumber says Island Air will continue in business. Island Air’s two nine-seat Piper Navajo planes fly four times a day to the Sister Islands. The airline also flies to chartered destinations such as Cuba, Jamaica, the Bahamas and Mexico.

“Island Air bought the two new Navajos so that we can compete with Cayman Airways,” said Mr Cumber. “These planes have only nine seats, however they are faster, quieter and more comfortable than the Twin Otters. They are also less expensive to run and only require one pilot as opposed to the Twin Otter that needed two pilots.

“The downside to these planes is that because they are smaller, many Brackers do not want to travel on them as they have this old mentality that bigger is better.”

Mr Cumber claimed that Cayman Express has the support of the Department of Tourism and the marketing department of Cayman Airways. “DoT consistently advertises the Sister Islands and always mentions Cayman Airways, but never Island Air,” he said.

Regardless of its advantages, Mr Cumber said he understands that Cayman Express will lose a great deal of money servicing the Sister Islands in its first year of operation. “These losses are more than what Government wanted from us in 15 years of landing fees,“ he said “Why did they try and fix something that was not broken?”

Mr Cumber said that Island Air was up to the challenge nevertheless. “With the Navajos, we have two brand new planes and we are continuing to serve the Islands as a family-run, Cayman-owned business. We hope to be doing so for another 15 years.”

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