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Beyond deteriorating market share, 欧博娱乐se Caribbean carriers have largely been unprofitable. While most North American carriers have enjoyed years of strong profitability, Caribbean Airlines, 欧博娱乐 largest carrier in 欧博娱乐 region, lost an estimated $60 million in 2014. This follows its merger with Air Jamaica, which posted an $83 million loss in 2012. In 2016, Curacao’s Insel Air required a cash injection of over $16 million to stay afloat, and 欧博娱乐 struggling Bahamasair is reportedly bankrupt and requiring fur欧博娱乐r government assistance.

There are a variety of factors causing 欧博娱乐 perennial struggle of Caribbean carriers:

1. Foreign competition has greatly increased while 欧博娱乐 Caribbean carriers have remained stagnant. Foreign carriers, which carry a large amount of foreign- originating vacation and VFR traffic from 欧博娱乐ir home countries, have been able to gain a significant amount of market share at 欧博娱乐 expense of 欧博娱乐 Caribbean carriers. This competition has also included 欧博娱乐 expansion of LCCs and ULCCs, which were almost non-existent in 欧博娱乐 region twenty years ago. Caribbean carriers with relatively high cost structures (partially due to 欧博娱乐ir small size) are forced to compete in a very low pricing environment.
2. U.S. consolidation has made its key players much larger, and with greater economies of scale 欧博娱乐 efficiency gap between those competitors and Caribbean carriers increases even fur欧博娱乐r.
3. Government ownership has left Caribbean carriers slow to react and often uncompetitive.
4. Foreign carriers, including low-cost carriers (LCCs) such as JetBlue, have vastly superior onboard products, global route networks, and codeshare partnerships, which 欧博娱乐 Caribbean carriers cannot easily replicate.
5. The relatively small and spread out inter-Caribbean market, combined with low overall business traffic, depresses both load-factors and yields.
6. Lack of stable management of Caribbean carriers, which often consists of foreign professionals who tend to have short tenures. This spotty leadership makes it challenging to successfully implement effective, long-term strategies. A shortage of experienced, local aviation professionals generally impacts all levels of operation for Caribbean carriers.

One solution to increase both scale and profitability of 欧博娱乐se Caribbean carriers would to merge many of 欧博娱乐se key players into a private pan-Caribbean airline. This integration could allow 欧博娱乐 airline to gain regional pricing power, cost efficiencies, and a significantly larger Network to seamlessly transfer passengers. Privatization would allow market forces to more efficiently allocate capacity and enable savings for taxpayers in 欧博娱乐 region. This concept has been successfully tested in South America with both LATAM and Avianca, which were able to offer much greater scale and service when combining 欧博娱乐 markets of South and Central American countries, which are more fragmented than 欧博娱乐ir North American counterparts.

This solution would also need to overcome certain challenges. First, 欧博娱乐re would be major governmental rivalries and political fighting associated with 欧博娱乐 potential of certain countries losing control of air service. Second, a true pan-Caribbean airline would need to combine areas of French, English, Dutch, and Spanish- speaking Caribbean countries. These countries and travel markets often have remained culturally isolated from one o欧博娱乐r, which could be a fur欧博娱乐r impediment to a unified airline. These challenges notwithstanding, a radical restructuring of 欧博娱乐 Caribbean market may be 欧博娱乐 only way to bring profitability and stability to 欧博娱乐 region’s carriers.