When government announced in January 2016 that it would put $7 million of taxpayers’ money toward a refundable “investment” to enable BVI Airways to establish direct flights to Miami by October of that year, officials touted the deal as a “game changer” for the territory’s airlift.
But some 19 months later, they are painting a far bleaker picture.
“BVI Airways regretfully announces that it is immediately laying off its entire flight crew (pilots and flight attendants) as a result of ongoing delays,” the airline announced on Tuesday, adding, “Hopefully, this will be a very short-term situation as we continue to work through remaining issues with the government and will be able to commence flights shortly.”
The airline also said that the longer-than-expected regulatory approval process has left its cash reserves depleted, and that it has been in discussions with government for months to raise additional funds “required” to begin operations.
BVI Airways further alleged that government has unfulfilled contractual obligations to update the Terrance B. Lettsome International Airport, and said it ran into trouble raising private capital after government’s “ill-timed” December 2016 announcement that a preferred bidder had been selected to expand the airport runway.
BVIA officials did not grant interview requests, and government did not respond to BVI Airways’ announcement before this issue’s press deadline.
However, Opposition Leader Andrew Fahie released a scathing statement on the matter.
“Over $13 million and what will we have to show — no airport extension, no direct flights, no transparency, no accountability — but the continuous haemorrhaging of the already scarce territory’s finances!” said Mr. Fahie, referring to the roughly $7 million paid to BVI Airways and more than $5 million paid to consultants, legal firms and others for preliminary work on the airport expansion project. “How much are the people prepared to suffer?”
Though mum on the issue this week, government has contested the airline’s claims about the airport expansion in the past, after BVI Airways made similar statements in March about the project affecting its business.
Asked about the issue at the time, then-Financial Secretary Neil Smith said the airline is worried that an expanded runway could bring in more competition from larger carriers.
“However, they were aware of this from the beginning,” he stated at the time.
Indeed, expanding the airport has been a priority for government since the current administration took office in 2011, with numerous public statements and pronouncements being made about the necessity of the development over more than five years.
Gov’t obligations
While government has previously responded to BVI Airways’ statements about the airport expansion, it has not addressed the airline’s new claims that the airport needs to be updated before operations can begin.
The contract between the two parties does obligate government to “provide additional Customs [Department] personnel and improvements to the Customs and baggage claim areas in order to efficiently handle increased passenger traffic and reduce passenger processing time.”
However, the contract does not detail how many additional personnel are needed or what specific improvements are required.
Approvals
In addition to blaming government, BVI Airways also stated that it has suffered from delays in obtaining all the necessary regulatory approvals from the United States and United Kingdom.
The airline didn’t go into detail about what agencies caused the delays — it needed approvals from the UK-based Air Safety Support International as well as the US Department of Transportation, Federal Aviation Administration and Transportation Security Administration — but it could be referring to the protracted time period it took to acquire an air operator certificate from ASSI, the agency that regulates aviation in the British overseas territories.
Premier Dr. Orlando Smith said in House of Assembly last September that BVI Airways applied for ASSI approval in April 2016. It can take as little as 45 days to receive such approval, according to ASSI’s website, but BVI Airways did not receive its air operator certificate until January.
Officials haven’t fully explained what caused this delay, but Dr. Smith said last December that part of the process entailed BVI Airways having its aircraft inspected by the regulator. Dr. Smith added at the time that BVI Airways had one of its aircraft inspected in early November, and that “ASSI advised BVI Airways on further additions and changes to their current operations.”
USDOT delays
After the government-subsidised airline received ASSI approval on Jan. 23, it submitted an application to the USDOT about a month later, on Feb. 27.
The projected timeline for this approval process was also 45 days — “provided that the applicant files a complete and accurate application, and there are no bilateral, safety, security or other concerns with the request,” according to DOT spokeswoman Caitlin Harvey — but BVI Airways experienced delays again, albeit for only about two weeks.
These delays stemmed at least in part from objections to BVI Airways’ application filed by the competing airlines VI Airlink and InterCaribbean. Those airlines objected on the grounds that they never received a copy of the application, and that government’s support of the airline would put them at a competitive disadvantage.
They also questioned the accuracy of the ownership structure BVI Airways disclosed in its application.
However, the DOT rejected those objections, approving BVI Airways’ application on April 28.
“We find nothing in their arguments that persuades us to withhold the bilaterally-authorised scheduled authority requested by BVI Airways,” the DOT stated in its approval notice.
The remaining approvals were granted soon after BVI Airways received its DOT approval. The airline announced on June 19 that it received the FAA’s nod, and on July 4 that it had received TSA approval. FAA and TSA information officers confirmed those announcements.
Blame game
In its July 4 announcement that it received TSA approval, BVI Airways stated that it would not meet a July 22 launch date announced in June by the Miami International Airport.
The airline also blamed government then, stating that its direct flights to Miami would start “as soon as all outstanding obligations and matters [between government and BVIA] have been resolved.”
Dr. Smith quickly responded to that statement.
“The government has fully discharged its responsibility to BVI Airways by providing $7 million as a subsidy in keeping with the terms of the agreement,” he said at the time. “The government therefore hopes that BVI Airways will begin flights without any further delay.”
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