~ What is St. Maarten’s airlift strategy? ~
Dear Editor,
These days, even the non-religious invoke the Lord’s name in vain while booking a flight to or from St. Maarten, followed by deep gasps and low sighs. The numbers that pop out of the screen at you for airlines ticket prices are shockingly high.
Airlines prices are rising dramatically as a result of high oil/jet fuel prices, staff shortages and more travel demand which has steadily recovered throughout the “tail end” of the pandemic. Demand continued to rise even though it wasn’t nearly back to normal as vaccination rates rose and COVID-19 instances decreased. The demand for travel currently, however, is reaching levels unseen before the pandemic.
The supply-and-demand equilibrium that is so crucial for controlling flight prices has suddenly become considerably tighter than it has been in the previous two years or more. St. Maarten is starting to feel the effects where, for example, a ticket booked from Florida to the island is clocking in at US $1,000, $2,000 or even higher than $3,000 for economy/coach seating. The same story surfaces on Delta’s St. Maarten-Atlanta (SXM-ATL) route. Not even booking two weeks in advance is resulting in lower prices. Try two months, maybe three.
Residents wanting to come home for the holidays have either had to sacrifice and choose who can go and who will stay, or simply forgo coming to St. Maarten anytime soon. Many have dug deep to find the ticket money to come home. Demand is high, supply isn’t high enough, and airlines know travellers will pay more right now.
Realising the threat to their economies with prices becoming out of reach for many potential Caribbean visitors, some Caribbean governments have sought direct discussions with airlines to either forge or strengthen ties that could influence route development and its various facets, including cost projections. These kinds of partnerships with airlines should be very familiar to St. Maarten, with industry players in the past having built a reputation on solid trade partner relationships.
In the meantime, we have yet to hear or see anything from the powers that be about a strategy to deal with rising ticket prices and/or prices that wildly fluctuate for what seems like every 15 minutes and/or high-level talks to address seasonal airlift, which also affects pricing. Over the weekend Dutch State Secretary Alexandra van Huffelen advised the Curaçao government to contact KLM directly after the carrier chose to remove the double daily flights from Amsterdam to Curaçao for the upcoming winter season.
Why is such engagement with airlines important? Well, there is a successful backstory for travel partner engagement, something St. Maarten and its tourism commissioners and professionals of years past had built to a standard, a success story, so to speak, that was beneficial for the island’s economy and for sustainable airlift. Close relationships, as in meeting directly with airline representatives often, prevented airlines in the past from servicing our hub countries. “SXM”, the airport’s call sign, was strengthened as the premier hub in the region with great connections that also served as an incentive for airlines currently looking at starting operations to the airport.
St. Maarten placed determined emphasis on showing airlines that it did not make economic sense to service those islands and demonstrated that we would ensure that every airline and hub passenger had the best experience possible. St. Maarten’s tourism professionals understood that the airline industry is small and very insular; the same people circulate within the industry. As such, the onus for destinations, especially small destinations, is always on relationships. With no reports of such discussions ongoing and no reports of an airlift strategy from the government of St. Maarten or even the airport, airlines will look at profitability first, not historical or traditional ties, as they try to get back to pre-pandemic levels.
We have finally heard something from a Princess Juliana International Airport (PJIA)-led group that attended the recently held World Routes Conference about this subject, but with little detail and zero substance. I would be curious to know what message was relayed from the PJIA-led group to existing and potentially new industry partners about the ongoing reconstruction of the airport and reported further delays that still have to be clarified by the government of St. Maarten.
We still do not take advantage enough of platforms for decision makers from airlines, airports and tourism authorities to develop strategies that will define the future air services. Gone is the acknowledgement that route development is an essential function for destinations planning to attract new services. This conclusion can be drawn because, once again, there is no reporting about strategy and/or short-, medium- and long-term plans for the destination.
St. Maarten has already lost low-cost carrier Frontier for the upcoming season. Spirit still only services the destination once a week on Saturday even after being acquired by JetBlue and JetBlue has cancelled its Fort Lauderdale-SXM route. Frontier, matter of fact, was not entirely jumping for joy at the prospect of having to transport passengers into utter chaos in an unfinished airport.
If supply and demand is the principle behind airfare, competition between airlines is the balancing factor that St. Maarten currently does not have on its most vital routes along the East Coast and the South of the US. As if on cue, American Airlines and Delta are taking full advantage of the void with prices set to meet the demand that can no longer be partially satisfied by low-cost carriers to the destination.
These budget carriers drove flight prices down to record lows in recent years and they forced major airlines like Delta and American and their international partners to compete on price, a win for consumers. Without competition the pressure on those bigger carriers is gone.
How will St. Maarten address this issue?
Do we have a plan to engage other low-cost airlines to keep prices competitive?
Are we redeveloping marketing support agreements or joint marketing efforts to help ensure brand awareness, or are we thinking about subsidised route development to maintain airlift through the season, although this is an approach we have never embraced? Are we in a position to make the financial allocations for either approach?
Are we finally going to appoint a permanent and competent minister of tourism to focus on this issue and a new Tourism Master Plan for the country, in collaboration with hospitality partners?
What exactly are we doing besides repeating “the same ol”?
The profitability of PJIA should also be considered since the ongoing re-construction and its apparent delays are already a semi-turnoff for some return visitors, though some would argue that with demand high and flights full of disgruntled people who had no choice but to pay $2,000 to get from Florida to St. Maarten, the airport won’t suffer.
On the contrary, there is no trend that indicates that prices will decrease anytime soon, especially without competition on the routes. The current airlift options and the high ticket prices that we have now are not sustainable long term. Simply put, people will stop coming. Aeronautical revenue might keep flowing in the short to mid-term, but the commercial side of airport operations could suffer with fewer passengers and, worse, fewer passengers who don’t spend. The airport could be dangerously at risk of losing commercial revenue from aspects like retail, which in turn affects debt repayments, employees etc.
Due to the island’s geographic location, too many decision makers on various levels take St. Maarten’s product position for granted. While we remain complacent about the aforementioned problems, our competitors in the region are quickly undermining our once-proud hub function. Million-dollar new airports are being built throughout the Caribbean and as a result, partnerships are being cultivated and airline service agreements are being made with those destinations.
For “The Friendly Island”, it appears that we will continue using our location in the North Eastern Caribbean as a crutch and hope for the best. There is no strategy to speak of. If there is, well, nobody has heard of it.
Michael R. Granger
