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Caribbean Air Transport Air Caribbean 36863-LAC No. Report Public Disclosure Bank World Document ofthe Authorized Public Disclosure Authorized Public Disclosure Authorized America andtheCaribbeanRegion Latin Department(LCSFP) SectorandInfrastructure Private Finance, PublicSeptember 25,2006 Disclosure ServicesandSectorPerformance OptionsforImproved Strategic AuthorizedTransport Caribbean Air Report No.36863-LAC Table of Contents Acknowledgements .......................................................................................................................... ..i Technical Terms .............................................................................................................................. ...11 Executive Summary ....................................................................................................................... iii I. Introduction and Objectives ......................................................................................................... 1 I1. Civil Aviation, International Trade and Tourism in Caribbean Economic Development .........2 I11. What Can Air Services Do For Tourism Development? .......................................................... 5 IV. Policy and Regulation of Air Services.................................................................................... 12 V . Regional Airline Services ........................................................................................................ 24 VI. Where Do We Go From Here - and How? ............................................................................. 36 Annexes ......................................................................................................................................... 41 Annex 1 - Caribbean Air Transport Services Symposium, Barbados: June 1-2, 2006 ................42 Annex 2 - Caribbean Regional Organizations and their Membership.......................................... 45 Annex 3 - Caribbean Tourism and Transport Statistics ................................................................ 46 I. Trends and composition oftourist arrivals ............................................................................ 46 I1. Dominican Republic - Tourism trends and air transport services ........................................ 48 Annex 4 - Air Transport Services Case Studies ............................................................................ 50 A . Aruba .................................................................................................................................... 50 B . Barbados ............................................................................................................................... 56 C . Mauritius .............................................................................................................................. 64 Annex 5 - List of Reports and References .................................................................................... 75 Annex 6 - List of Persons Met and/or Interviewed ....................................................................... 77 Map IBRD 34974 .......................................................................................................................... 82 List of Tables .Main Text Table 1: Caribbean Arrivals by Air. 2004-2005 ............................................................................................................ 4 Table 2: Intra-Caribbean Movements by Air. 2000-2003 .............................................................................................. 4 Table 3: Aviation Safety Status in Selected Caribbean Countries ............................................................... Table 4: Caribbean Airlift Capacity - by Airline ....... Table 5: Caribbean Airlift Capacity - by Country ................... Table 6: OECS - Analysis of Intra-EastemCaribbean Airlift . Table 7: Regional Airlines Operational Performance List of Boxes .Main Text Box 1: Airport Security in OECS ................... Box 2: Air Services Policy in Aruba and B Box 3: Key Features of the CARICOM MASA . ............................................ 15 Box 4: Recent International Experience in ................................................................... 16 Box 5: Examples ofSubsidized Air Services .............................................................................................................. 20 Box 6 : The Fiscal and Economic Impact of LIAT Operati Box 7: The Experience of Mauritius..................... Box 8: Jamaica - One Approach Towards Estimat List of Charts - Main Text Chart 1: U.S. - Caribbean Traffic Compared to Other Regions .................................................................................... 3 Chart 2: Passenger Arrivals by Carrier in 2003 ........................................................................................................... 25 List of Tables - Annexes Table A4- 1 : Weekly flights by Airline and Destination CountryRegion: February 13-19, 2006 .............................. 60 Table A4- 2: Weekly flights by Airline to USA Airports: February 13-19, 2006. ...................................................... 61 Table A4- 3: Weekly flights by Airline to European Airports: February 13-19, 2006 ................................................ 61 Table A4- 4: Tourist Arrivals in Mauritius from Country of Origin ........................................................................... 65 Table A4- 5: Overview of key Bilateral Air Services Agreements ............................................................................. 66 List of Charts - Annexes Chart A3- 1: Tourists Arrivals to Selected Caribbean Chart A3- 2: Tourists Arrivals to Selected Caribbean Chart A3- 3: Tourists Arrivals per Capita in Selected Chart A3- 4: Tourists Arrivals per Capita in Selected Chart A3- 5: Tourists Arrivals by Main Market (in percentage of total) ..................... Chart A3- 6: Dominican Republic: Tourist Arrivals by Main Market (in percent) Chart A3- 7:Total Passenger Movement by Air ........ Chart A3- 8: Total Passenger Movement by Air (perc Chart A3- 9: Total Scheduled Passenger (Arrivals and Departures) by Airport. ...................................... .49 Chart A3- 10: Total Charter Passenger (Arrivals and Departures) by Airport ............................................................ 49 Chart A4- 1 : Tourist (Stop-Over) Arrivals per Capita in Selected Countries, 2004 .................................................... 50 Chart A4- 2: Aruba Real GDP and Tourism Sector Performance (percent change) .................................................... 50 Chart A4- 3: Tourist Arrivals by Country in 2004 (in percent of total) .................................................... Chart A4- 4: Tourist Arrivals by Country (Non-US) ................ Chart A4- 5: Air Passenger Arrivals to Amba by Carrier...................... Chart A4- 6: Real GDP and Long-Stay Tourist Arrival Growth Rates . Chart A4- I:Barbados: Tourist Arrivals by Country of Residence ....... Chart A4- 8: Tourist Arrivals by Market, 2004 ...... Chart A4- 9: Passengers (EmbarkedDisembarked Chart A4- 10: Passengers (EmbarkedDisembarkedTransit) Carried by Charters in 2004 ......................................... 60 Chart A4- 11 : Load Factor on Selected Routes ............................................................... .68 Chart A4- 12: Destination and Share of Cargo Chart A4- 13: Contribution to Passengers Tra Chart A4- 14: Contribution to Freight Traffic and Revenues .............................................................. Chart A4- 15: Shareholding of Air Mauritius Ltd. (March 2005) ........................................................ Chart A4- 16: Number of Hotel Rooms and Annual Growth Rate .......................................................... Chart A4- 17: Hotel Occupancy Rate ............................................................................. Chart A4- 18: Average Length of Stay in Hotels ................................................................ AcknowledPements This report was prepared by Douglas R. Andrew (Lead Infrastructure Specialist) and Stephen J. Brushett (Lead Transport Specialist). The report takes into account the results of a stakeholder symposium that was held in Barbados, June 1-2,2006, details ofwhich are provided in Annex I ofthis report. The report also takes into account the findings of a “Caribbean Air Transport Services Study - Air Fares Yield Analysis and Best Practices Simulation Model” carried out by a team from Inter VISTAS Consulting Inc. led by Douglas Wilson, Director of Transportation, Forecasting and Planning under funding provided by the Bank. Specific contributions to the preparation of the report were made by: Ingrida Rosa (Consultant Economist), who collected and analyzed data for this report and who prepared the Aruba and Barbados case studies and by Vickram Cuttaree (Infrastructure Economist), who prepared the Mauritius case study. Marc Forni (Consultant) provided information concerning air transport infrastructure, safety and security improvements in the OECS countries. Additional research was carried out by Julieta Abad and Nicolas Serrie. Annette Minott assisted in the organization ofthe above-mentioned stakeholder symposium and of the various country visits. Maria Constancia Mallo provided assistance in the editing and formatting of this report. Peer reviewers were Charles Schlumberger (Senior Transport Specialist), Pierre Pozzo di Borgo (Senior Transport Specialist)
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