Lessons in airline economics

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Lessons in airline economics
By Robert Clarke
in Paramaribo, Suriname  (Trinidad Guardian April 21, 2002)

BWIA's inaugural flight to Paramaribo, Suriname was a lesson in airline
economics.  The 50-seat turbo prop aircraft was almost full on Wednesday
night, but it had been padded, with BWIA staff, journalists and travel
agents. The inaugural return to Port-of-Spain a few hours later would carry
only 11. Not bad, but not good either. Not yet anyway.  How can BWIA make
money on the route?  BWIA's Vice-president Customer Service & Operations
Don Mac Lean says you can't think in terms of Paramaribo to Port-of-Spain.
It's a hub and spoke system. Port-of-Spain is the hub, Paramaribo's the
spoke.  "We don't need 32 passengers between Paramaribo and Trinidad. We
need two to Trinidad, two to Barbados, two to Miami and so on - and pretty
soon you have a reasonable load factor," said Mac Lean.
The airline's 16th destination can impact on the its overall number of
passengers.

In what was clearly a highly anticipated launch-demonstrated by a fair
presence of media: television, radio and press, who turned up for our 1 am
(Surinamese time) arrival-BWIA president and CEO Conrad Aleong said,
"Suriname fits the classic economic definition of trying to make money on a
thin route."  If you aren't using an aircraft more than eight hours a day,
you aren't making money, said Aleong. So after prime-time hours, when the
plane should be in bed, Suriname could be turning some cash-hence the
ungodly flight times: Paramaribo departure 4 am, Port-of-Spain 9.30 pm.
Aleong said in order to be economical the turbo prop needs to run longer
routes.  But back to the hub and spoke.  Paramaribo to Piarco's thrice
weekly morning flights will arrive in time to catch all the airline's
international destination connections. And BWIA's international night-time
arrivals will all make the Paramaribo flight too. Shorter times between
connections-essential for the busy traveller.

And how long will the anticipated load factor remain at 60 per cent or 30
seats per flight anyway?  The way shipping and travel agent, Philip
Navarro, tells it, Suriname has been needing this service for a
while.  Trinidad and Tobago manufacturers (TCL, Bermudez, SM Jaleel and
others) have built up good export relations with our neglected Caribbean
neighbour and Navarro says trade is pretty good. Navarro's Shipping Ltd has
been shipping containerised cargo to Suriname for the past seven years.
Suriname has even begun to send some full containers back.  But previously,
T&T businessmen may have chosen to have a Surinamese man, or woman, of
business. Navarro says connections weren't that great. He says you either
jumped BWIA's Georgetown flight and hopped on the four seat "shake and
baker" across miles of South American jungle; or flew Suriname Airways
through Curacao-a flight which wasn't all that regular. Businessmen
couldn't spend just a couple days, they'd be captive for four or
five.  BWIA's service may suit those business travellers.  In spite of the
ungodly hours.  Tour operators hope to market Suriname as an
eco-destination. BWIA says if the traffic increases enough, it'll consider
putting an MD-83 on the route. The service's introductory fare- valid for
one month only-is US $175. After that, the standard fare will be
US$238.



The owner of Roger's Trinbago Site:
Roj (Roger James)

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