The St. Lucia government Friday said that agreeing to an EC$20 million subsidy over a three year period as demanded by Virgin Atlantic, would have opened the door to similar requests from other airlines to the detriment of the islands tourism sector.
Virgin Atlantic Thursday announced that after June 8 it would stop its operations between St. Lucia and London’s Gatwick Airport, for the “foreseeable future.”
Virgin said the decision to withdraw from the island was not taken lightly and that Virgin Holidays will continue to serve hotels here after that date through connecting flights via partner airlines.
“Customer bookings for Virgin Atlantic flights departing up until June 7, 2020 will not be impacted,” according to a letter send to tourism industry partners here.
But Tourism Minister, Dominic Fedee, confirmed media reports here that Virgin Atlantic’s decision to scrap the route was linked to a stalemate over the payment of subsidies to the airline.
Fedee said that over the past months, the St. Lucia government had been holding talks with Virgin Atlantic which indicated to local tourism officials that in order to continue operating its existing five flights weekly in the winter months, and three in the off season summer months, it would require EC$20 million over three years.
He said that two other options were presented to St. Lucia which would mean a significant reduction in Virgin Atlantic flights and did not present the best return on a potential investment.
“It is our strong belief that agreeing to Virgin Atlantic’s demands for a multimillion dollar subsidy, would have opened the door for other airlines to also ask for subsidy.
“In fact, upon hearing the news that Virgin Atlantic has requested subsidies from four Caribbean governments, namely Grenada, Tobago, Antigua and St. Lucia, other airlines have been in talks with respective governments,”Fedee said.
Fedee said that while the government appreciates the need for it to share the financial risk on new flights until the maturing of the route, Virgin’s requests goes against our principle having been in St. Lucia for 21 years.
“St. Lucia presently supports Virgin Atlantic flights with marketing agreements annually but presently has no subsidy arrangements with any airline in any other tourism market. Virgin Atlantic represents seven percent of total global arrivals.
“To proactively address any fallout that may arise from the cancelation of the Virgin Atlantic flights, the Government of Saint Lucia has been in very fruitful discussions with other carriers and has received very good feedback from at least one other airline to increase capacity from the UK Market in the very near future. ”
Fedee said that up to May 2019, St. Lucia has recorded an 18 per cent growth from the UK market over the same period last year.
“We anticipate even further growth with our restructured marketing thrust to maximize more of our marketing spend on Brand St. Lucia.
“From all indications, the demand for St. Lucia in the UK Market among Caribbean destinations is second only to Barbados and continues to be one of the most aspirational Caribbean destinations for UK travellers,” Fedee said, adding “we will continue to dialogue with Virgin Atlantic to arrive at a possible mutually beneficial relationship sometime in the future”.
St. Lucia is also served out of the UK by British Airways which operates seven flights weekly and Thomson Charters.
