ST JOHN’S, Antigua – Former Flight Operations Manager with LIAT Patrick Ryan has backed the assessment that REDjet, a budget airline whose operation spanned only months, was an ill-conceived concept.
Since cancelling flights system-wide in March, the airline has tried varying ways to raise capital, including jetting after government assistance, and has been rebuffed by a series of country leaders – the latest being Prime Minister of Antigua & Barbuda Baldwin Spencer, who has told OBSERVER Media that the REDjet model was, from the beginning, nothing he would have betted on.
Ryan, though, wasn’t completely convinced that the concept of a budget airline couldn’t work in the region. He just felt that the one attempted had no chance of succeeding.
“They had some fares that were extremely low. Sure, they were introductory fares and to get people moving up, but the big thing was their model. It needed a lot of money. It needed a lot of time to get you going, and you had to be very versatile. You needed a lot of cash to make your decisions on short notice and make changes,” he said also expressing concern that cost of maintaining the jet planes would have been too onerous on the company.
It was based on that assessment that he felt governments were right to refuse to bail out the carrier, saying that assistance for airlines to market their routes was different from putting cash directly into the company.
He said that, in order to convince any government to assist, REDjet would have had to present a sterling business plan showing it could become profitable using the model it chose.
News reports out of Barbados this week said that REDjet executives were seeking to raise US $25 million for a move from Barbados to Jamaica, but Ryan’s feeling is that the carrier has already flown its last leg.
The company laid off its 94 workers on Thursday and a day later announced that it was unable to pay its debts and had filed for insolvency to get some breathing space for the next 30 days.
(More in today’s Daily OBSERVER)