Caribbean Airlines Demand Tax Reforms to Boost Travel
Airline leaders in the Caribbean are urging governments to reform aviation taxes and policies as excessive fees continue to drive up airfares, making regional travel prohibitively expensive and stifling economic growth. At the Routes Americas 2025 conference, held in Nassau & Paradise Island, industry experts and executives voiced concerns over how high taxes—sometimes even surpassing the base fare—are negatively impacting tourism and inter-island connectivity for local residents.
Trevor Sadler, CEO of interCaribbean Airways, shared an eye-opening example during a panel discussion. “Our team reached out to me about a customer who received a free ticket, and she couldn’t believe that the taxes alone were costing $200,” he said. Sadler noted that on another occasion, a ticket priced at $110 had taxes amounting to $120. Such steep fees, he argued, are discouraging travelers from flying within the region, thereby limiting travel opportunities and economic integration.
Hans van de Velde, CEO of Sint Maarten-based Winair, acknowledged that while governments rely on aviation taxes as a consistent revenue stream—especially from international visitors—the burden placed on regional residents is unfair. “I can understand many governments choosing to have high taxes because international customers are willing to pay, but for the locals, can we find a way to tax them less?” van de Velde questioned. He cited the example of Bonaire, where tourists pay a separate entry tax of $90 instead of having those fees built into the airfare, while locals pay around $15. This model clearly distinguishes between international arrivals and residents, offering a potential template for reform.
The discussion also highlighted how government-imposed fees have inflated the cost of air travel, thereby hampering economic opportunities in the region. Sadler challenged whether the tax revenue collected from aviation is reinvested into airport improvements or simply absorbed into general government funds. He added that airport privatization has, in some cases, led to even higher fees as operators seek returns on their investments.
Van de Velde was forthright about the misuse of aviation taxes. “To be honest, I don’t know what governments do with these taxes,” he said, pointing out that some airports in the region are clearly underinvested despite the high fees collected. He went on to criticize government interference in airline operations, lamenting, “I am completely stupefied by the fact that we have prime ministers talking on radio shows about aviation and running airlines. That’s not their job, and it creates weak national carriers that eventually fail.”
Amid these challenges, there is a strong call for a unified approach to Caribbean aviation. Sadler stressed the need for harmonized policies and standardized taxation structures across the region. “The Caribbean is marketed as one destination, but when it comes to air travel, we act like 20 different countries. If we could take a bit of that regional cooperation to our governments, we could become more cohesive,” he explained.
Industry leaders agreed that coordinated tax reforms could unlock significant growth in the regional aviation sector. By reducing the tax burden on domestic travel, governments could stimulate inter-island connectivity, boost tourism, and ultimately enhance the overall economic landscape of the Caribbean. As the debate continues, the call for sensible tax policies and strategic government investment in airport infrastructure remains stronger than ever, promising a brighter future for Caribbean aviation.
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