InterCaribbean growing fleet, gauge, as Caribbean market recovers

Founded with a single aircraft to enable the owner to visit his girlfriend, InterCaribbean Airways has come a long way in its 30 year history. As the Caribbean market awakens from a COVID-induced slumber the opportunities for growth are myriad, and the carrier aims to fill in the gaps, offering connections throughout the region.

Speaking at the CaribAvia Caribbean Aviation Conference in St Maarten last month, CEO Trevor Sadler highlighted challenges the company faces, but also some of the great success realized as the islands reopen and tourism recovers.

Making Connections

Founded as a commuter airline service Turks & Caicos, InterCaribbean adjusted its sights a couple years ago to add connecting flow. Thanks to strong support from government treaties permitting access to foreign markets, the carrier now has four “hublets” (that’s Sadler’s term) where it manages passenger transfers.

The newest of those hubs, at Barbados, is boosted by LIAT’s suspension of service last year. InterCaribbean showed up with planes and crew just a couple weeks after the island reopened its borders.

Thanks to long-standing interline agreements with major airlines such as British Airways the connecting sales channel at Bridgetown started to fill almost immediately. The company also invested in local staff to help drive sales among residents.

Part of delivering these connections smoothly to passengers relies on easy transit rules and skipping visa requirements. Thanks to cooperation with local authorities InterCaribbean can publish – and deliver on – a 20 minute minimum connection time at Santo Domingo, Tortola, and Providenciales.

Growing the Fleet

The growth and success led InterCaribbean to grow its fleet, both in numbers and in aircraft size. The Embraer 120 passenger planes are being replaces as the company up-gauges to ATR 42s, providing significantly more passenger and baggage room on board. That growth comes with just a 15-25% increase in trip cost, presenting significant upside for the company, assuming it continues to fill planes with the connecting traffic.

The carrier also operates 50-seat E145 jets in some markets. Similar to the props, however, those planes are quickly showing themselves to be too small for the connecting passenger services that InterCaribbean continues to develop.

The E120s are owned outright and will not be scrapped as the ATRs join the fleet. Because of the low operating costs and recognizing the growth in cargo traffic within the islands, InterCaribbean plans to convert them and operate a dedicated cargo fleet.

Included in this plan is a “Marketplace” cargo offering targeting local e-commerce merchants that need to move retail goods among the islands at more reasonable rates than are currently available.

Seeking Tax Relief

While the connections can be relatively smooth time-wise, they are often still quite expensive. A trip from the Dominican Republic to Jamaica via Turks & Caicos attracts nearly $300 in taxes and airport fees before the carrier charges a single penny in airfare. Like airline CEOs around the world, Sadler would like to see those rates drop. But his focus is specifically on local travelers, not across-the-board cuts.

Sadler lobbied for governments to “take what they can take from passengers on longer-haul flights,” extracting revenue from North American or European tourists. But he also sees an opportunity to support local business development with a 50% (or more) discount for inter-island itineraries.