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by pltm
(PLTM) - There was much fanfare when the 'Spirit of the Virgin Islands' touched down at the Terrance B. Lettsome International Airport last month, but apart from the celebration, there remains numerous questions, especially since the planned start of direct flights between Miami and the BVI has proven thus far to be empty promises.
According to an original agreement obtained by BVI Platinum News, plans for BVI Airways started as far back as June 2014 and the airline should have commenced direct flights on October 31, 2016. Then, there was a November start date pitched by Premier and Minister of Finance, Hon. Dr. D. Orlando Smith, but both timelines have been missed and the new projected start date is by the end of this month.
The players listed in the agreement are Castleton Holdings, LLC, which is registered in the District of Columbia with offices in Washington DC; Colchester Aviation, LLC, which operates under the laws of Delaware and list its offices at a Miami address; and BVI Airways Inc, which is a corporation in the BVI with no listed office, but a P.O Box number.
However, notwithstanding the airline's inability to provide service by the timeline listed in the agreement, Government has held up its end of the deal by farming out millions to the airline at a time when faced with tough questions about its own cash flow with a $25 million line of credit secured from CIBC First Caribbean International Bank.
The agreement sets out that Government provides $7 million in six installments. The first, a $500,000 in January of this year and the last payment of $800,000 is expected on November 30, 2017. The airline was scheduled to receive $850,000 on November 30 this year; however BVI Platinum was unable to accurately verify whether this payment was made in spite of the delays.
It is unclear if the monies received from Government were used to secure the airlines aircraft for the route and if Government funds were used, can Government take direct control of the aircraft or does Government retain the aircraft if plans get stalled.
There has been no effective explanation for the delay although BVI Platinum has learned that the airline is still awaiting regulator approvals. Clause 2 of the agreement defines that BVI Airways was expected to meet this obligation with support from the Government. On the U.S. side, approval is needed from the Federal Aviation Authority and from the BVI, regulators, Air Safety Support International (ASSI).
Under part 3 of the agreement, the airline is expected to set up Interline agreements with other carriers and again there hasn't been any official announcement about this set up. With just a few weeks to the end of the year, there hasn't been any pronouncement as to where in the Miami terminal the airline will be stationed nor has it shared information about fares.
While the failure of the airline to meet the October deadline can be seen as a breach of the original agreement, there is a provision that allows both parties to agree on a new date for the start up service; however, Government can still opt out of the agreement.
