Special Report: BA welcomes take-off in Caribbean demand

Special Report: BA welcomes take-off in Caribbean demand

British Airways has reported a strong year to the Caribbean. Colm Lacy, BA's commercial head at Gatwick, spoke to Ian Taylor

British Airways added almost 11,000 seats to the Caribbean this summer and filled them all thanks in no small part to the trade.

Colm Lacy, the airline’s commercial head at Gatwick, said: “We’re really pleased. We put in 13% more seats this summer – we filled that and then some, so we improved our load factor.”

He added: “We’ve improved load factors by 10 percentage points [to the Caribbean] since 2011.”

This summer’s growth followed a strong 2014 when BA added a 10th Boeing 777 to its long-haul fleet at Gatwick, from where most of its Caribbean services fly.

Go back to 2013 and the carrier was switching capacity away from the region to the US, owing partly to the high price of fuel and high rate of Air Passenger Duty (APD) to the Caribbean.

Lacy hailed the turnaround, attributing it to a combination of attractive fares and promotions, reduced rates of APD this summer and support from trade partners. The additional seats came primarily from bigger economy cabins.

He said: “We work with hotels, tourist boards and the trade. From April, APD has been lower and our fares have been lower and we’ve made sure we have really attractive fares. We have a sale on now with the lead-in fare to Antigua at £447 return.”

The comparable fare a year ago was £475 and Lacy said: “The sale fare for the same period in 2011 was £509 return, so four years later it is 12% cheaper – not many things in life have come down in price.

“We keep putting in seats and filling them, so the hoteliers are happy, the tourist boards are happy and we can do more marketing. Everyone benefits.

“It’s an encouraging time to be working with the Caribbean. Our trade partners have all been growing. All we need is for it to keep raining [in Britain] and it will keep getting better for the Caribbean.”

APD reduction

The improvement in the UK economy since the low point of 2009-11 is an obvious factor; the re-banding of APD to the Caribbean from April this year is another.

Years of lobbying and protest finally saw the UK Treasury switch from a four-band to a two-band APD structure, reducing rates a little to many long-haul destinations. More importantly, it put the Caribbean on a par with the US, to which the region had lost traffic from the UK while rates were punishingly high.

The removal of APD on children under-12 from May this year will also have helped, with the exemption to be extended to under‑16s from next March (see box).

Lacy said: “If prices go down, demand goes up. We’ve definitely seen that, and if prices go down in future we expect to see demand go up further.”

Has the reduction in APD made the Caribbean more attractive? “It certainly makes the Caribbean more competitive. But APD really needs to go, and not just for children. It’s still the highest air tax in the world. As International Airlines Group (IAG), we continue to press the government to abolish APD. For the UK economy, it would be better if APD was abolished.”

Caribbean promotion

BA has not stinted on promoting the Caribbean. It ran a ‘Caribbean Escape’ giveaway of tickets at London’s Victoria Station in May this year, offering commuters the chance to win 125 pairs of tickets over five days.

The theme of the promotion was “Escape the horrible weather”. “We offered people an opportunity to escape that week,” said Lacy.

The carrier ran a Caribbean marketing campaign on the back of the promotion, at one point flying out 63 former professional footballers to Tobago for a tournament shown on Sky TV.

Barbados continues to be the region’s most in-demand destination from Britain, with up to 12 flights a week this winter, but both Antigua and Saint Lucia now have year-round daily flights after the carrier increased Antigua services to daily this summer.

Lacy said: “Barbados’s hotels have seen some investment – Sandals has bought a couple of properties and some of the existing hotels have added beds. It’s key that the product has improved and other islands are looking to get investment.”

The carrier will add an 11th Boeing 777 to its Gatwick fleet for summer 2016, but use the additional capacity to add new destinations beyond the Caribbean by flying to Lima and Costa Rica.

“We’re looking to add more breadth to the programme,” said Lacy. “We’ve grown so much this year [to the Caribbean], we’ll use next year to bed in the programme and then look again.

“Next summer I’ll look for opportunities for future growth.”

However, the carrier has doubled frequency to the Turks and Caicos Islands for this winter and next summer, going from one to two departures a week.

Trade activity

BA’s current ‘Big Take Off’ promotion runs until September 22 and Lacy promises “further activity later in the year”.

He said: “We have a calendar of activity with tourist boards to ensure the Caribbean continues to get its share of travel. And we work with the trade all through the year, with bespoke activities with various members of the trade.”

In addition, the carrier will have run 43 agent fam trips since January by the end of this month, taking about 500 agents to the Caribbean, and plans further trips in the last three months of the year.

“It makes a difference when agents visit,” said Lacy. “It’s difficult to prove individuals sell more, but our volumes through the trade are growing. Some of the trips are the result of competitions – tourist boards offer them as incentives. I expect to have a similar number of fam trips next year.

“The trade is really important. Agents are an integral part of our business and I don’t see that changing. Half our bookings come through the trade and we want that to continue.”


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