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HomeNewsArchivesNEW AIRLINE GETS V.I. BACKING FOR ST. CROIX HUB

NEW AIRLINE GETS V.I. BACKING FOR ST. CROIX HUB

Aug. 14, 2002 – St. Croix — and, by extension, the territory — got encouraging news from two sources Wednesday, one from land and one from sea. Funding is being put together to create an airline hub at Henry E. Rohlsen Airport, and a large, new cruise ship will call at Frederiksted next March.
Sun Airways has been laying plans to come to the territory since 1999, but the airline needed a funding guarantee. Gov. Charles W. Turnbull recently signed legislation which creates an Economic Development Fund to be administered by the Economic Development Authority. Money in the fund is to promote the economic development of the territory, particularly on St. Croix.
In an Aug. 1 letter to Bruce Morgan Casner, chairman of Caribbean Airline Acquisition Group, which owns Sun Airways, Turnbull wrote: "One of the stated purposes of the fund is to provide a guarantee for the project financing necessary to establish an airline hub at the Henry E. Rohlsen Airport … The legislation provides that up to $10 million may be guaranteed to establish the airline hub."
The governor told Casner that the government through the EDA "will issue this guarantee provided by the fund for the purposes of assisting in the financing of an airline hub on St. Croix, once the fund is organized."
Casner was introduced to the Port Authority board at its August meeting last year by Sen. David Jones, a longtime supporter of bringing off-island investment to the territory. Casner told the board of plans to make St. Croix the airline's hub for a schedule that he projected would see some 215,000 passengers in its first "mature" year of operation.
A Washington, D.C., lobbyist, Casner said he foresees an expanded Rohlsen Airport as the transit center for air traffic between certain U.S. mainland gateway cities and down island and Latin America. Sun Airways will have another operation in Puerto Rico, he said.
Casner noted that American Airlines now dominates the traffic between the U.S. mainland and the Virgin Islands and Puerto Rico, with about 70 percent of the total market. However, he added, American has cut back on flights, and this has caused major concern for hotels in the territory. Also, he said, new business investment in the territory is deterred by inadequate air transport capacity.
"We've studied everything about this market that exists," Casner said.
"Look at the empty ticket counters at the airport now, the empty gates," he said. "We could fill those up with passengers connecting to other flights and those staying in the V.I." He stressed his belief that there is a market for competition with American, which he accused of having "damaged much of its customer base in the Caribbean from poor customer service."
With seven round-trip flights weekly, Casner said, Sun Airways would provide about 34 percent of the available seats from Washington's Dulles Airport to the territory and the only non-stop service our of Orlando. The airline plans to serve European passengers who go to Orlando to visit Disney World and the other theme parks there, he told the board VIPA last year.
The airline also plans to establish maintenance centers, air cargo distribution centers, fueling facilities and an aviation training school, he said.
In a press release issued Wednesday, Casner said Turnbull's letter "is a validation by the V.I. government of the project's credibility, and it provides a means by which potential investors can be persuaded to begin their due diligence, which will lead to funding being made available to begin the project."
Casner said once start-up capital is in place, it will take about six months to comply with federal regulations governing new airlines and begin service. "Since it is in everyone's best interest to streamline things as much as possible, much precious time can be saved by getting started now," he said.
The governor told Casner that since his is the only group to date which has expressed a "continued interest in this project, access to the funds … will be available subject to EDA approval and pursuant to applicable law, once the fund is organized and properly capitalized." Funding is not an issue as far as attracting the cruise ship. The VIPA board recently extended through the end of next year its waiver of all marine fees for cruise ships calling at St. Croix. Implemented in 1999 as an incentive to attract ships to the island, the waiver applies to any vessel calling at both St. Thomas and St. Croix. The measure had expired on May 31.
Gordon Finch, Port Authority executive director, said in a separate release on Wednesday that Holland America Line is sending its Zuiderdam, which is scheduled to go into service in December, to St. Croix next March 12. He could not be reached late Wednesday to clarify whether the ship will return to the island on a regular basis after that one call.
The Zuiderdam, with a capacity of 1,848 passengers, had initially been scheduled to call at Frederiksted as part of its seven-day Eastern Caribbean cruise out of Fort Lauderdale, Florida. In June, Wednesday's release said, Holland America, which is owned by Carnival Corp., canceled "all of its 37 calls to St. Croix" scheduled for 2002, 2003 and 2004.
A Port Authority schedule in effect on June 19, when Finch announced the Holland America pullback, showed the Zuiderdam calling 43 times at St. Croix from November of 2002 through December of 2003. For more background on the curtailment of cruise ships calling at St. Croix, see "Of shoes and ships and crime and punishment".

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