Airlines urge PJIAE not to
introduce new airport fee
SIMPSON BAY--The negotiations between the operating company of Princess Juliana International Airport PJIAE and the airline companies flying to and from St. Maarten on the introduction of a so-called Airport Improvement Fee (AIF) has hit a snag. Up to 2½ weeks ago it appeared there were no objections to the introduction of the said fee, which reliable sources say will be less than originally projected.
However, in a March 7 letter the International Air Transport Association (IATA) and the St. Maarten Airlines and Handlers Association (SAHA) requested PJIAE director Eugene Holiday’s urgent personal intervention “in order to avoid an adverse impact on air traffic in St. Maarten and the Island economy through the intended creation of a new AIF on April 1.”
IATA doubts whether the proposed charges are actually required in the current form due to what it says is the lack of transparency regarding the airport’s cost base. PJIAE is urged to postpone implementation of these new charges “until a proper analysis of the implications has been made and the airport customers (represented by SAHA) have been provided with a proper cost justification, transparent cost accounting in a consultation meeting.”
According to IATA and SAHA, the announced increases will have a significant effect on the cost of those airlines already operating, yet they are not sure that the increases are necessary on a cost-recovery basis.
“With the high investments in the airport and the significant differences in cost and taxes between passengers for aviation versus the cruise lines, there is a very delicate balance between price and demand for airlines. These are the minimum requirements that the International Civil Aviation Organization (ICAO), to which the Netherlands is a signatory State, has defined for airport financing and we are of the opinion the airport has not met them at this point.”
PJIAE director Eugene Holiday told The Daily Herald that he was surprised by the letter as the introduction of the AIF had been agreed on since 2004. “It was part of the financial package agreed upon to finance the building of a new airport terminal.”
He added that up to 2½ weeks ago a meeting with the airlines had taken place and there had been no objection against introduction of the fee.
He also refuted the allegation that the process lacked transparency because the document on the financing of the new airport is a public document available for everyone’s perusal.
In addition, IATA assistant director Cyriel Kronenburg and SAHA president Michael Cleaver state in their letter that PJIAE has announced a significant increase of airport charges for St. Maarten at a time when traffic demand is still very fragile. “The aviation sector is still recovering from a financial downturn and record-breaking fuel prices. This is especially the case for the airlines in one of Island’s main markets, the USA,” Cleaver and Kronenburg say.
The St. Maarten Hospitality and Trade Association (SHTA) also received a copy of the letter. SHTA president Emil Lee said he was also concerned about the situation.
He said he hadn’t been aware of the introduction of such fee until he read the letter. He said the purpose of an airport was to provide service to those who travelled to and from a destination. If the fee is implemented that purpose is served and that’s the problem. Lee added: “The trick is to find a balance between the improved services for the travellers and the price asked for these services.”
IATA and SAHA state in their letter: “As aviation and the resulting economic and tourist activity is a main contributor to the Island’s GDP and job market, implementing these increases without the proper traffic/demand analysis and most certainly without proper consultation with the main customer group could lead to a significant decline in traffic with adverse results for the economy and all involved.”
Lee explained that the Caribbean market was very competitive and that tourists looked at package deals they could get. “St. Maarten needs to be competitive. If we become disproportionately expensive hotels will start to put together attractive packages in other destinations.”
Without wanting to go into any further detail, Holiday said that he had just received the letter and would be dealing with it in an appropriate manner. He stated that when the negotiations were concluded, PJIAE would provide comprehensive information about the agreement reached on the introduction of the AIF. This newspaper learned from reliable sources that the negotiations are scheduled to continue later this week.
The IATA letter was also sent to Tourism and Economic Affairs Commissioner Theo Heyliger, Finance Commissioner Sarah Wescot-Williams and all SAHA and IATA members. Neither Wescot-Williams nor Heyliger were available for comment yesterday.
Cleaver, who was also contacted, did not give additional comment on the letter yesterday, stating he would prefer to do it today with a “fresher mind.”
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