Caribbean Air­lines’ ex­pla­na­tion last week on the air­line’s chal­lenges on the Trinidad to To­ba­go route was noth­ing new to us.

For years we have known of the dif­fi­cul­ties of ser­vic­ing a short 52-mile route with all the ex­pens­es that come with op­er­at­ing an air­line.

But with the To­ba­go House of As­sem­bly’s Chief Sec­re­tary Far­ley Au­gus­tine in­sist­ing the air­line isn’t do­ing enough to ser­vice To­ba­go, per­haps the time has come to re­vis­it the ef­fec­tive­ness of the sub­sidised air­fare.

From Au­gus­tine’s view­point, the ar­gu­ment is sim­ply about pro­vid­ing more seats for would-be tourists.

He’d not­ed in June that all seats on Caribbean Air­lines were booked right through to the To­ba­go Car­ni­val Oc­to­ber and yet ho­tels were at 50 per cent ca­pac­i­ty.

It sug­gest­ed that a large num­ber of pas­sen­gers were To­bag­o­ni­ans fly­ing be­tween the is­lands but not added val­ue to the is­land’s tourism prod­uct.

Promis­ing to pay for lat­er air­port open­ing hours, he’s re­peat­ed­ly called on Caribbean Air­lines to add more flights.

The air­line, how­ev­er, is count­ing its pen­nies, not­ing that fly­ing to To­ba­go since the bor­ders were re­opened, amount­ed to op­er­a­tional costs of US$18,777,648 as at June 2022, and loss­es of US$9.6 mil­lion.

To be fair, the air­line too is strug­gling to re­turn to the pre-COVID era with even high­er fu­el costs than be­fore. Lim­it­ing the num­ber of flights to To­ba­go, there­fore, is part of its cost-con­tain­ing mea­sures.

With the cost per flight hour as high as US$17,306, it’s no sur­prise the air­line point­ed to “low prices which do not re­flect ac­tu­al mar­ket val­ue” as one of its con­cerns.

This, of course, is a mat­ter for Fi­nance Min­is­ter Colm Im­bert as Cor­po­ra­tion Sole.

In the 2013/14 Bud­get his pre­de­ces­sor, Lar­ry Howai an­nounced the sus­pen­sion of the US$50 mil­lion fu­el sub­sidy to Caribbean Air­lines from Oc­to­ber that year.

The Gov­ern­ment con­tin­ued, how­ev­er, to sup­port the air­bridge to the tune of around US$26 mil­lion.

The prob­lem, though, is that while the air­line was asked then to con­tin­ue op­er­at­ing by pay­ing the mar­ket price for fu­el, the air­bridge sub­sidy was not match­ing the mar­ket price for fares.

Since 2005, the adult fare on the air bridge has been fixed at $150 one way, ir­re­spec­tive of ris­ing fu­el costs.

The ac­tu­al breakeven fare on the air bridge is $300 one-way and of that sum, while the pas­sen­ger cur­rent­ly pays $150, the Gov­ern­ment sub­sidy to the adult pas­sen­ger on­ly is $50 (chil­dren re­ceive no sub­sidy from the Gov­ern­ment) and Caribbean Air­lines ab­sorbs the loss for the re­main­ing $100 or $150 de­pend­ing on if the pas­sen­ger is a child but oc­cu­py­ing a seat.

This can­not be sus­tain­able, par­tic­u­lar­ly when the cost of fu­el is sig­nif­i­cant­ly high.

While re­mov­ing the sub­sidy in full can have a se­vere im­pact on trav­el be­tween the is­lands (with a re­turn tick­et jump­ing to $600), the Gov­ern­ment must con­sid­er the air­line’s con­cerns by con­sid­er­ing at least a par­tial re­moval.

The high de­mand for seats sug­gests that pas­sen­gers will pay more for the con­ve­nience of be­ing able to fly when they wish, as of­ten as they wish.

There is lit­tle op­tion oth­er­wise for a win-win sit­u­a­tion. To­ba­go will con­tin­ue to suf­fer if more planes don’t fly, and the air­line will suf­fer if more of its planes take to the air with­out more rev­enue.

The tough choic­es must be made at least by the next Bud­get if this is­sue is to be re­solved to the ben­e­fit of most.