Prime Minister Concerned but not Pessimistic about Virgin Withdrawal!

Following the publication of Virgin Atlantic’s termination of flights notice, Tourism Minister Dominic Fedee addressed the nation on Friday July 26. He disclosed that the British airline had demanded a EC$20 million subsidy. On Monday the prime minister said, “Virgin Atlantic has made a significant contribution to the development of this country, and for that I am extremely grateful. But the airline has made a business proposal to Saint Lucia and Saint Lucia has taken a business approach in our response.” Prime Minister Chastanet disclosed that the airline had been experiencing “some difficulties” and governments in the region had been approached for financial support. 

His government faced two dilemmas, Chastanet said. The first concerned the amount requested, more than this country currently spends on its entire marketing campaign in the UK, and then there are the other carriers that also operate the route. He questioned the possible reaction of other carriers if a subsidy was given an airline that has operated here for twenty years. 

“So from a transparency perspective,” he said, “it would mean that at minimum we would at least have to match that amount of money to the other carriers as well. In the case of British Airways, that actually has more seats, would I give them more than US$2.5 million? Where would it end? We would like to help Virgin Atlantic. We would like them to stay with Saint Lucia but the mechanism they have chosen in order to obtain that support is really not workable for us.”

Opposition Leader Philip J. Pierre expressed concerns that the planned pull-out may impact the redevelopment of Hewanorra International Airport. Had the government had entered into a Public Private Partnership for the airport, as he said his government intended to do before the 2016 elections, the risk would be not the government’s. 

Opposition MP Alva Baptiste also advised the prime minister to address the issue “with due haste and immediacy” to avoid serious economic instability in the country. He predicted the announced Virgin withdrawal will result in reduced passenger numbers and negatively impact hotel occupancy and direct spending.  

Chastanet remains hopeful that an amicable solution can be reached before June 2020 but the prime minister has not been sitting on his hands in the meantime. He said the government was already engaged in preliminary discussions with other carriers about increasing their airlift to the island. He announced that come September he will lead a mission to London for further related discussions. 

As for the opposition’s expressed concern for the HIA project, Chastanet said: “Virgin represents only 7% of our market. We don’t anticipate any problems in that regard. Already our talks with British Airways look promising.”