An easy read

by Sir Courtney N. Blackman Ph.D,

In Don’t Burn our Bridges, arguably the finest Caribbean work of its genre for decades, Jean Holder combines exhaustive research, thorough analysis and keen insight in presenting a convincing case for government ownership of regional airlines.

He begins with the observation that “countries in the developed world, like the US, Brazil and Australia, are very concerned about who owns and controls their airlines” … and “legislate against foreign ownership totally or prescribe the exact proportion of minority foreign ownership which is permissible”.

Holder’s judgments and recommendations are well seasoned by experience. No Caribbean person is more qualified to comment on this issue than he. After 14 years of service in the Barbados diplomatic corps, Holder served for 30 years as head of two regional institutions: first as founding CEO of the Caribbean Research and Development Centre and later as Secretary General of its successor, the Caribbean Tourism Organisation.

Since 2004 he has been chairman of the Board of Directors of Leeward Island Air Transport. In these roles Holder worked with every minister of tourism from the more than 30 participating countries in CTO, interacted with numerous prime ministers and ministers of Government, and engaged union leaders across the region. As Chairman of LIAT he acquainted himself with every aspect of airline operations, among the most complex of any industry. Having visited every continent other than Antarctica and slept in some of the world’s finest hotels, your reviewer fancied himself somewhat of an expert on air transportation and tourism — until he read Don’t Burn our Bridges.

Although not a trained economist, Jean Holder was never seduced by the now discredited “free market ideology” inflicted upon developing countries by the IMF, World Bank and IDB over the last three decades, (i.e, that the “free market” will always produce superior solutions to those of governments). He therefore rejects the erstwhile World Bank position that Caribbean countries with their own national and regional carriers “do not need to own an airline to have a successful tourism industry, and that the funds used for subsidies … would be better used in other areas”.

He recalls that the Dominican Republic, which had bought into that argument and closed their national airline, later concluded that a national airline was “vital to the growth of their tourism” and announced in May 2008 that its new airline, Air Dominica, would begin operations with flights to the US, Mexico and further afield. He also observed that Air Jamaica failed both when government owned and managed it and when it was owned and managed by the legendary entrepreneur “Butch” Stewart.

Moreover, Holder has displayed a firm grasp of the economics of the airline industry than which, as he rightly observes, there are few industries more difficult and complex. He understood quite early that price-based competition among airlines with high fixed costs (e.g. the high cost of new aeroplanes), and high intermediate costs (e.g. high fuel prices), would drive all of them into insolvency or sometimes bankruptcy, as happened to the legacy airlines in the US, and similarly in respect of small airlines with inadequate capital competing against one another in a limited market space, as the demise of Carib West, Carib Express, Caribbean Star and REDjet has proved.

In a paper written shortly after President Carter had in 1977 deregulated the US airline industry, your reviewer argued that intelligent regulation was needed in the case of an oligarchic industry with high fixed costs, not deregulation; he has not changed that view.

But more important than Holder’s knowledge and understanding of regional tourism and airline matters, are his insights gathered from participation in tourism and air transportation affairs, insights which illuminate important issues and suggest practical solutions. And, as my late Professor David Miller at the Columbia Business School repeated ad nauseam, “One insight is worth one hundred mathematical models!”

Jean Holder’s critical insight was the analogy he perceived between bridges and airline routes connecting destinations. The Caribbean archipelago is characterised by islands between which transportation by land or sea is not practicable — except in a few cases like the ferry services between Montserrat and Antigua, Trinidad and Tobago, and St. Maarten and Anguilla. Without airline service linking the islands, Caribbean peoples would be virtual prisoners — like Napoleon on St. Helena.

His second important insight was recognition of the symbiotic relationship between a flourishing Caribbean tourist industry, a financially viable LIAT, and the dream of Caribbean integration — an unusual case of Siamese triplets! None of those three goals is achievable except in combination with the other two.

To extend the metaphor, our “air” bridges are analogous to those structures that span the great rivers of North America, and should therefore be seen as permanent features of our regional infrastructure. Indeed, there are painters in the US whose sole occupation is painting a specific bridge; when he gets to the end he goes back to the beginning and starts all over again, ad infinitum. Caribbean people, for whom “air bridges” are indispensable, would have an even greater stake in the maintenance of their “air bridges”, and, if they owned them, the least possible incentive to burn them down.

Holder’s analysis leads logically to the solution that the 30-odd countries serviced by LIAT and Caribbean Airlines should combine their resources to create a regional airline system comprising carriers that deliver reliable services at reasonable rates and, in Holder’s words, “have nowhere else to go and will not be reassigned by their owners to other regions when the going gets tough”. The subsidies we now pay to foreign airlines to support our tourism industry when our airlines are in distress, may be used to keep our “air bridges” in good condition.

The strategy outlined above will not be easy to execute since, for one, an airline is as difficult to manage for American Airlines, now in bankruptcy, as for LIAT, which has had several close calls over the 50 years of its operation. But in Jean Holder’s view the critical resource required for the construction of sturdy “air bridges” across the Caribbean archipelago is not finance but the resolve of our political leadership.

However, any organisational structure for managing the proposed regional airline system, whether holding company or unitary corporation, will certainly fail if politics is allowed to pollute managerial decision-making, and management lacks autonomy in the direction of the organization’s day-today operations.

Don’t Burn our Bridges should be required reading for both those in the public or the private sector involved in tourism or air transportation, and for citizens interested in the promotion of regional cooperation and integration. They will find it a treasure trove of information on the history, travails and, yes, the contributions of regional airlines, often owned, operated or subsidized by Government — in a geographical area more dependent on tourism than any other in the world.

As a bonus, readers will find the book easy to read since the author is, above all, a natural storyteller.

One Response to An easy read

  1. bimjim August 21, 2012 at 8:52 am

    Sir Courtney is entitled to his opnion, and I am entitled to mine.

    Sir Courtney’s opinion is based on the performance of a fellow bureaucrat who has basically produced very little for his length of tenure; my opinion is that, if he was so smart and nationally-minded, well over five years ago LIAT Chairman Holder should have recognised his personal inability to change the airline, had his entire ineffectual Board resign, and given others more able and qualified an opportunity to do the job.

    Further, with his stellar lack of performance over the last 8 years – and no detailed experience with aviation at all before that, except perhaps as a passenger – Chairman Holder should stop presenting himself as an “aviation expert” in any area of the world and put his head back under the blanket until his now long overdue retirement finally rolls around.

    All of Jean Holder’s “exhaustive research, thorough analysis and keen insight” in his aviation endeavours have produced exactly NOTHING. No innovation, no substantive changes, no shining insights, no outstanding CEOs recognised and stolen from private industry, no progress at all from when he walked in the door for the first time.

    Under Chairman Holder’s full range of “leadership” and “expertise” LIAT is the same money-losing company it was before he took the helm, and continues to experience the same abuses of employees and inefficiencies of scale it had for decades before. The same old quarrels, inefficiencies, lawsuits, union clashes and really stupid internal processes are still in the same places they were when I left in 1995 – and were there even when I started at LIAT back in 1980 – over 32 years ago.

    Chairman Holder’s observations are the same as any mature teenager could produce: Get government/s to pick up the losses under the name of national protectionism, and the entity will continue to lose money. Try to remember that, in the last year, Caribbean Airlines has wasted almost a Billion US dollars with that mantra – but at least T&T can afford it.

    Yes, Chairman Holder’s judgments and recommendations are well seasoned by his experience with LIAT. Except, in other words, he is convinced that what has always been done at LIAT is the only way to do it… no doubt a lesson well learned from the airline’s past and current stagnant management. In Holder’s eyes, change is not an option – just keep doing it the same way, and one year there will magically be a profit.

    Please note: This approach is also known among fully conscious, real-world people as one of the definitions of insanity.

    .. .. .. .. “No Caribbean person is more qualified to comment on this issue than he.”

    Please, Sir Courtney, stop demeaning yourself with this silly chatter. He has been Chairman of the second most losing airline in the region (the first being Caribbean Airlines, fuelled by oil money that gushes from the ground), and you say Jean Holder is more qualified to comment? In what parallel universe? This a patently ridiculous statement that clearly panders to a friend or a colleague.

    And Jean Holder’s 44 years of service between the Barbados diplomatic corps, Caribbean Research and Development Centre and the Caribbean Tourism Organisation have produced what shining accomplishments? Please tell us, because we who know the truth about his aviation career are seriously nodding off here…

    The bottom line is that with all his “insights, qualifications, experiences, presentations, connections, etc., etc., etc.” over the years, if Chairman Holder was such a superstar aviation expert and Caribbean government-political chum pal friend confidant buddy persuader he would have come up with a foolproof plan for the airline that WORKS, convinced the shareholder countries/governments to pay for it, convinced the regional non-shareholder governments to sign on for it, and have turned LIAT around to an example of how to operate an airline efficiently within four years.

    He has been there at the helm through several challenges, and with serious competition he had all the excuses to trim LIAT into a lean, mean flying machine that would start paying its own way and by example get rid of all the old acronyms for its name for all time.

    That is IF he is such a superstar aviation expert. But he is NOT, so LIAT continues in the same old rutted cart track it has been since it was bought out of private hands.

    Jean Holder is no more an aviation expert, Caribbean or otherwise, than my little lap dog. But at least my little lap dog is useful in some ways, and doesn’t use up and/or waste millions of dollars a year.

    In my opinion, all Jeqan Holder is doing is using his presence at the highest levels of LIAT over the last eight years to profit from a book publishing. No doubt the most gullible will buy, read and believe the rubbish, the less gullible may buy it just to find out what Board room secrets he is willing to disclose. But the least gullible among us will also know that – as a still-sitting Chairman – those little plums will be few and far between – if any at all.

    Personally, if I was looking for some insight into Caribbean aviation – or even management of any kind – you may be assured that Jean Holder’s scribblings would not be anywhere on my list of publications to spend good money on.

    My expectation: A boring read of Jean Holder’s more mundane experiences during his tenure at LIAT. And this is because he can’t legally reveal the more exciting ones – which is also something any mature teenager could tell you.


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