BVI Airways Flop Remains A Grave Concern

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Opposition member and Third District Representative Hon. Julian Fraser still has questions about the $7.2 million given to BVI Airways and said that he will be seeking those answers in the new House of Assembly even though there has been a change of government.

Hon. Fraser gave early notice that he would be seeking an update on the matter during the House of Assembly sitting on 12 March. In referencing the fact that Hon. Fahie during his tenure as Opposition Leader questioned extensively on the BVI Airways saga, Hon. Fraser announced that this line of questioning will continue even though Hon. Fahie’s role has changed to Leader of Government business and the one who must now answer.

While alerting that the questions are coming Hon. Fraser said: “Premier, you asked a million questions when you were in the Opposition, I hope that you present those answers to us when we ask them to you because as far as I am concerned you are the Premier and whatever the last Premier did you are responsible for. Oh yeah, you are going to tell us where the money for the plane went.”

The last update on the BVI Airways matter was made in the House of Assembly on 15 January by former Premier and Minister for Finance Dr. the Hon. D. Orlando Smith. During that sitting the former Premier explained that through a series of negotiated agreements, his Government secured an arrangement with Castleton under which Government would be willing to provide revenue support to the newly established BVI Airways. 

He said that the agreed upon sum was seven million dollars; and in return for that commitment by Government, BVI Airways would use commercially reasonable efforts to begin service between Tortola and Miami.

It was explained that upon completion of that agreement, BVI Airways set to work and achieve important steps on the path to commencing operations. It was announced that two well-maintained aircrafts were acquired.

These aircrafts were said have received certification from Air Safety Support International, as well as approvals from the US Department of Transportation, FAA and TSA. It was announced that ground and flight crews were hired and trained. Similarly, a corporate back office to handle accounting, legal, marketing and other functions was established.

The first bump in the road to the BVI Airways arrangement was said to have come in 2016 when the company submitted a complaint to the BVI Government regarding the promoted plans to expand the runway at the airport. 

According to the complaint, the runway expansion plans undermined BVI Airways ability to raise capital from investors because a longer runway would mean competition from legacy carriers.  BVI Airways claimed many of its potential investors were no longer interested in the venture if they had to compete with these larger airlines.  From this point forward, the project began to collapse.

It was said that the inability to attract investors affected BVI Airways which was paying for flight and ground crew, as well as other expenses. “Put simply, the company was running out of money. BVI Airways came to Government asking for additional money from us. Government could see no path toward responsibly increasing our commitment. The best we could do was bring forward to payment schedule of the seven million dollars we had committed to provide.  We did so in the belief that it would be sufficient to get BVI Airways up and running, at which time we hoped that revenue from ticket sales combined with renewed investor interest would make the company viable,” the former Premier told the House.

It was mentioned that in June of 2017 BVI Airways which ran out of cash laid off its staff and shut down operations. As such it was explained that the Smith government began trying to recoup some of its investment.

“Since that time, Government has been working with our legal advisors to explore every possibility for recouping some or all of the seven million dollars we invested with BVI Airways. That effort continues.  I cannot promise that it will be successful.  For now, the truthful answer to the question: where is the 7 million is that the money was invested and the investment failed to deliver a return,” the former Premier announced.

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