A PRICE?WAR has started as new entrant and low-cost airline REDjet prepares to take to the Caribbean skies and airfares on other carriers operating in the region have dropped dramatically.
REDjet announced the beginning of its commercial operations last week with a long-awaited schedule of flights from Barbados to three Caribbean destinations, at the same time that regional airline Caribbean Airlines published significantly reduced fares to Port-of-Spain, Trinidad and Kingston, Jamaica – two destinations to which REDjet will be flying, beginning May 8.
The action by Caribbean Airlines appears to confirm the express belief of REDjet chairman and CEO?Ian Burns, who said at a Hilton Barbados Press conference to launch the airline, “[The advent of REDjet] marks the beginning of a permanent end to high fares in the region. . . . We will be revolutionizing air transport in the region.”
Fifteen per cent of all REDjet’s seats will be sold at fares as low as US$9.99. These fares were launched through the REDjet website and through a call centre. Burns believed REDjet had set up “a unique sales and distribution model for airlines”.
He said the decision to start REDjet was prompted by his realisatation that the Caribbean was the only region in the world that did not have a low-fare airline, and the only region in the world where the number of passengers was declining. “It was born out of consumer frustration,” he declared.
Questions have been raised about REDjet’s ability to offer such low fares. But chief operating officer Kevin Dudley said traditional airlines operated multiple business models and multiple aircraft types, interlined passengers and charged a single price for a bundled product, all factors that contributed to high operational costs.
In contrast, he said, low-fare airlines offered “a single simplified business model” such as REDjet’s with “a single class product – economy, a single aircraft type meaning less training for crew and maintenance engineers, the use of modern consumer-driven distribution channels like call centres, and no interlining of flights with other airlines.”
