June 5, 2008 — The Virgin Islands got a much-needed economic shot in the arm Thursday with the news that American Airlines has agreed to exempt duty-free boxes of liquor from their new checked baggage charges.
The charges could have hobbled the territory's economy. The exemption was in response to a plea from Delegate Donna M. Christensen, who wrote last week to Peter J. Dolara, American Airlines senior vice president, asking for the exemption. She had explained to Dolora that the extra charge would have a "disastrous impact on our tourism economy."
"I received a letter from Mr. Will Ris, American senior vice president of government affairs today," the delegate said in a release, "and he stated American's desire to promote tourism to and from the Virgin Islands, and said that they would not apply this new fee to duty-free boxes of liquor."
The tourism community received the news with open arms. At a press conference about the airline's cutting back local flights earlier in the week, Tourism Commissioner Beverly Nicholson-Doty, who also wrote the airline, had expressed little hope that the carrier would respond favorably to the territory's request because of its current budget restraints.
"This is extremely exciting, very positive," Nicholson-Doty said Thursday night from St. Croix where she was attending the USVI Hotel & Tourism Association Destination Symposium. "We were very pleasantly surprised when we got the announcement," she said. "It was a concern for the administration because of what it means for our visitors. It certainly has an impact. It's good for tourism and the rum industry."
Referring to the earlier press conference, Nicholson-Doty said with a laugh, "Remember, when I talked about silver linings? Well, sometimes you catch a break, and this is one of those times."
Christensen reminded officials in her letter that the proceeds of taxes on the sale of V. I. rum are important to the territory's economy. The rebate on the taxes provides security for roughly $600 million in public infrastructure bonds.
American announced late in May that beginning June 15, it would charge $15 for a first checked bag and $25 for a second checked bag each way. The Transportation Security Administration (TSA) prohibits liquor boxes as carry-on luggage.
The news rocked the island's tourism, hotel and retail industry. (See "Checked Bag Charge May Dry Up Rum Sales, Hit V.I. Economy.")
Hotelier Richard Doumeng, Hotel Association board chairman, also spoke from the St. Croix meeting. "That's, obviously, one obstacle that we didn't need, especially for the retailers," he said. "We can safely say it is very much appreciated. It is a show of good faith. They [American] could have hung tough."
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