a1609: Haitian Airline startup (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: JD Lemieux <lxhaiti@yahoo.com>

>From the April 5, 2002 print edition
E-MAIL ASSOCIATE EDITOR Peter Zalewski at
PZalewski@bizjournals.com.

Copyright 2002 American City Business Journals Inc.

Haiti gets a lift: Family embarks on airline startup
Peter Zalewski

A Haitian-American family living in South Florida is
seeking U.S. approval to launch a new Port-Au-Prince-based
airline to serve the passenger market between Haiti, the
United States and Canada.

Harry V. Vieux, along with wife, two brothers and two
cousins, plan to launch Haiti Caribbean Airline in June,
flying four weekly flights initially between the island's
capital Port-Au-Prince and New York's John F. Kennedy
International Airport. The service is expected to increase
to daily by the end of the first year.

The family-owned company also plans to add two-weekly
scheduled services to Miami and Montreal in December.

Haiti Caribbean Airline is betting it can succeed by
offering later departure times and larger luggage
allowances.

American Airlines is the largest scheduled commercial
carrier flying that route with a daily service between
Port-Au-Prince and Miami. Air France and Dutch Caribbean,
formerly ALM, offer regular service between Miami and
Haiti.

Air Haiti, the nation's only carrier serving Miami, stopped
flying to South Florida in late 2001.

Departure times, rather than price, are what could
distinguish Haiti Caribbean from industry giant American,
Vieux said.

"I am not trying to undercut American," said Vieux, Haiti
Caribbean's chairman and president. "I am not really
running a competition with American. The strategy is to
provide the Haitian community more options. Right now, they
don't have that much."

American's daily flight leaves Miami at 1:35 p.m. and New
York at 10 a.m. Vieux said he intends to set his departures
no earlier than 3:30 p.m. to allow business people more
time to conduct their schedules and catch a flight back the
next day.

Another selling point, Vieux said, will be the airline's
"flexibility" in accepting more and heavier passenger
luggage for Haitians shopping in the United States and
Canada.

Haitian nationalism is another factor Vieux said could help
the airline continue beyond the first 18 months accounted
for with startup money of $200,000.

"We don't have an airline that we can call our own," Vieux
said. "It is very important to us. The Haitians have been
complaining about it."

He estimated there are 100,000 Haiti expatriates in South
Florida alone, said Vieux, who has a home in Plantation.

Besides continuous political and economic problems in the
country of 8.8 million, another primary reason Haiti
doesn't have its own airline relates to the country's
questionable civil aviation authority, from a U.S.
perspective.

The Department of Transportation has deemed Haiti a
"category 2" country, meaning its civil aviation authority
oversight doesn't meet international standards. That means
any Haitian carriers can only fly to the United States if
they use aircraft operated by companies, usually charters,
based in category 1 countries.

This arrangement, known as a "wet-lease agreement,"
generally means higher operational costs for the startup
airlines.

If granted U.S. approval, Haitian Caribbean Airlines
proposes to partner with North American Airlines of
Jamaica, N.Y., according to the DOT application.

Vieux knows North American Airlines from his current job
where he is the manager of the New York-based tour company
Travel Span, overseeing flight coordination, control and
manifest responsibilities. Travel Span charters planes from
North American Airlines.

Bruno Scaldaferri of North American Airlines, who
negotiated the agreement with Haiti Caribbean Airlines, did
not return several calls seeking comment.

The airline plans to fly a Boeing 757 airplane with all 214
seats sharing the same class of service, according to the
application. All roundtrip tickets from New York are
projected to cost about $450, but CFO Jacques Vieux said
the company would remain competetive with American, the
only other airline to fly from JFK to Port-Au-Prince.
American currently charges about $400 with taxes.

The airline projects revenues of $1.01 million in the first
month of service in June, before growing to $1.32 million
in December. The first fiscal year's revenues are estimated
to top $14.36 million with a net income of $1.18 million,
according to the application.

"These projections are based upon conservative estimates
but nevertheless project a modest and consistent profit in
the third and succeeding months of service," according to
the airline's application. If the airline's income is
higher than what it projects after eight months, it will
add a flight during the high season, beginning Dec. 15.

The U.S.-Haiti passenger market still has room to grow,
said Stuart Klaskin, a principal in the Coral Gables
aviation consulting firm Klaskin Kushner & Co. Haiti
Caribbean Airline, however, should not automatically assume
that Haitian-Americans will fly the carrier regardless of
its service and price, he said.

"My experience is, initial operational forecasts are much
more optimistic than reality proves them to be," Klaskin
said. "While I think they are being optimistic, I don't
think they are egregiously optimistic."

Haiti Caribbean Airline incorporated in October, and
obtained necessary government approval from Haiti in
November. On March 25, the airline filed its application
with the DOT.

The application is now in a 15-day public comment period
after which a decision will be made, said DOT spokesman
Bill Mosley in Washington, D.C.

"If there are no objections filed and no other reason not
to, we would act anytime after the 15-day period," Mosley
said.

E-MAIL ASSOCIATE EDITOR Peter Zalewski at
PZalewski@bizjournals.com.

Copyright 2002 American City Business Journals Inc.



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