Dominica, undaunted by COVID, to build first long-haul airport

Summary

• The small Caribbean island of Dominica, which relies on nearby island airports for long-distance travel, is to get its own international/intercontinental airport
• All flights currently are regional ones within the Antilles
• A citizen's investment programme will pay for much of it, also a cruise port and infrastructure
• Dominica has a dual offer as an offshore financial centre as an environmental paradise for tourists
• Its infrastructure was destroyed in a 2017 hurricane and it started again with a clean slate
• The economy is reasonably sound
• The impact of the pandemic has been very slight so far
• The new airport will be close to the existing Douglas-Charles airport
• The project is progressing, there is interest from foreign firms to build it, but it might require loans and/or private funding in the future
• It is ambitious but achievable

Have passport will travel

Tiny Dominica, in the Caribbean Sea, population 72,000 and with virtually zero population growth (not to be confused with the Dominican Republic), intends to build a new airport.

Dominica's Prime Minister Roosevelt Skerrit said the Government acquired 411 acres for the construction of a new international airport. The project is being funded by Dominica's Citizenship by Investment Programme and will be the country's first airport facilitating longer-haul international operations.

A Citizenship by Investment Programme, common in Caribbean countries and in others with small populations (although they can apply anywhere), offers legal citizenship status to investors, by allowing them to obtain second citizenship and a passport in exchange for their investment in the country's economy.

Dominica is one of five countries in the East Caribbean that have Citizenship by Investment programmes.

They could also be viewed as tax exemption schemes as well as global travel facilitators for those wishing to avoid restraints on other passports. Depending on the country, investment values can vary from just over USD100,000 (Antigua, Barbuda, St Lucia, and Dominica fall into that category).

Dominica: "World's Best Citizenship by Investment Programme"

The Financial Times' Professional Wealth Management publication ranked Dominica as the world's best Citizenship by Investment programme in its annual CBI Index (2018).

In a way the financing of an airport in this manner would be a variation on the method by which India's Cochin (Kochi) Airport was funded. In that instance it was by ex-patriate non-resident Indians, mainly those with connections to the area; all 10,000 of them.

Dominica, officially the Commonwealth of Dominica, is an island country with no land borders. The capital, Roseau (pop. 15,000), is located on the western side of the island. It is part of the Windward Islands chain in the Lesser Antilles archipelago. The island is located near Guadeloupe to the northwest and Martinique to the south-southeast.

Dominica is in the heart of the Caribbean

Source: Google Maps

Source: World Factbook

Dominica is politically stable - an important feature

Dominica was colonised by Europeans, predominantly by the French, who imported enslaved people from West Africa to Dominica to work on coffee plantations. Great Britain took possession in 1763 after the Seven Years' War, and it gradually established English as its official language. The island gained independence as a Republic in 1978.

Politically, there have been attempted coups since independence but the political landscape is more settled now. In Dec-2019, incumbent Prime Minister Roosevelt Skerrit won his fourth consecutive general election by eighteen seats to three, becoming the first Dominica Prime Minister ever to do so. This is important for tourist development. No visitor wants to get caught up in an insurrection.

Once primarily an agricultural economy, (a trade which could be hit hard by frequent hurricanes), consisting originally of bananas and then diversified by the government into coffee, patchouli, aloe vera, cut flowers, and exotic fruits such as mango, guava and papaya, the economy has taken a distinct turn more recently, becoming increasingly dependent on tourism and the financial sector.

Slow tourism development to date but now the 'nature island' beckons a new breed of traveller

Dominica is mostly volcanic and has few beaches; therefore, tourism has developed more slowly than on neighbouring islands. Nevertheless, Dominica's mountains, rainforests, freshwater lakes, hot springs, waterfalls, and diving spots make it an attractive ecotourism destination as well as one for scuba divers, a sort of Iceland-in-the-sun. It is known as 'the nature island of the Caribbean'.

Cruise ship stopovers have increased following the development of modern docking and waterfront facilities in Roseau. Even so, Dominica still has the lowest number of visitors in the Caribbean, including earthquake and poverty-ravaged Haiti (which shares the island of Hispaniola with the Dominican Republic).

In 2018 (latest figures available) there were 63,000 stayover tourists spending USD81 million (down from 81,500 tourists in 2014) and 134,500 cruise visitors, down from 286,500 in 2014. But 2018 was the one following Hurricane Maria which destroyed large parts of the island.

Dominica's dormant financial sector is to be recharged

In the financial sphere, Dominica has become in recent years an international centre, encompassing offshore banking, payment processing companies, and general corporate activities.

There are a number of global financial institutions in situ including Scotiabank, Royal Bank of Canada, Cathedral Investment Bank, First Caribbean International Bank, and The Interoceanic Bank of the Caribbean. Dominica is listed in Group 3 of the International Monetary Fund's list of such offshore finance centres, along with the likes of Costa Rica and Panama. (Group 1 contains such countries and islands as Jersey, Luxembourg, Switzerland and Hong Kong).

Dominica avoided being placed on the Organisation for Economic Co-operation and Development (OECD) black list by committing to regulatory reform to improve transparency and begin information exchange with OECD member countries about their citizens.

Dominica reputedly offers tax-free status to companies relocating from abroad but the extent of this activity is unknown owing to the confidentiality that traditionally surrounds such activities.

Sep-2017's Hurricane Maria, which passed through the island destroyed much of the country's transportation and physical infrastructure and set back the financial development programme including an intention to sign agreements with the private sector to develop geothermal energy resources. With fragile finances, the government's focus since has been to get the country back in shape to service cruise ships.

The economy contracted in 2015 but recovered to positive growth in 2016 due to a recovery of agriculture and tourism. Dominica suffers from continuing high debt levels.

The island's economy is regaining strength

Little data is available on the economy since 2017 but information from the World Bank suggests that GDP in 2019, at USD596 million, had climbed back from the aftermath of Hurricane Maria to its highest level since records began (1977), while GNI per capita (the dollar value of a country's final income in a year, divided by its population) was, at USD8090, also at its highest level since records began in 1979.

So there are several reasons why Dominica, which is seeing few Covid cases (only three reported between 01- and 23-Oct and the country began to welcome foreign visitors again from early Aug-2020) should look towards an aviation future: the development of eco-tourism, the growth of the cruise industry there (when it recommences) and the potential for reactivation of offshore financial activities.

In August seat capacity shot to its highest level in 2020 but has gone back to around 70% of what it was at the beginning of Mar-2020.

The two existing airports have served their purpose

The first question many people would ask is, 'how would I get there now?'

Dominica has two small airports; the main airport is Dominica Douglas-Charles Airport (DOM) and the second is Canefield Airport. DOM offers regular services by American Eagle (American Airlines subsidiary), Winair and LIAT to destinations such as Barbados, San Juan and Antigua.

Location of airfields (Douglas Charles Airport top right)

Source: CAPA - Centre for Aviation and OAG

Douglas-Charles Airport (formerly Melville Hall Airport) is the country's major international gateway. A number of airlines operate both passenger and cargo services from the airport to a number of destinations in the Caribbean, and on to the south eastern U.S. The airport is publicly owned and is operated by the Dominica Air & Sea Ports Authority.

There are no official figures available for passenger traffic. However, it is known that in 2019 available seat capacity was 270,700 seats, an increase of 35% over 2018 (when capacity had reduced by 27% over 2017). At a typical regional airline load factor of 65% that suggests around 175,000 passengers. Capacity so far in 2020 (to w/c 26-Oct) is 240,000 seats.

Dominica Douglas-Charles Airport annual seat capacity

Source: CAPA - Centre for Aviation and OAG

All flights are international; there is no call for domestic ones and Canefield Airport, despite being closer to the capital, handles mainly ad-hoc and general aviation flights.

The main airline is Air Antilles Express, based at nearby Guadeloupe, with over half the capacity

Dominica Douglas-Charles Airport seat capacity by carrier

Source: CAPA - Centre for Aviation and OAG

Most services operate within the Caribbean, to other islands, led by Guadeloupe, St Lucia and Barbados, also Sint Maarten and Puerto Rico. From places international and intercontinental services are available to countries such as the U.S., Canada, the UK, France and the Netherlands, at least in normal times. Dominica cannot be considered 'cut off' as long as connecting services to those places continue.

Route map: Douglas-Charles Airport

Source: CAPA-Centre for Aviation and OAG

Dominica Douglas-Charles Airport international departing seats by country/territory, w/c 26-Oct-2020

Source: CAPA - Centre for Aviation and OAG

There are limitations. The airport's runway is only 1465m, and the one at Canefield only 950m. So the main aircraft type at Douglas-Charles is the ATR-42 and -72 with collectively over 70% of the seats.

There are no LCC services (the Caribbean is populated internally mainly by regional services) and none of the three main alliances has a presence although the Caribsky alliance does.

The airport is in use 0700-1900 but is busier on some days than others; there is no consistency in day-to-day operations.

According to the CAPA Airport Construction Database there is no construction activity at either Douglas-Charles airport or the newer Canefield which was built in 1979 as a 'parting gift' from the British.

Airport is "The only missing link for the country"

The government will acquire 213 properties. Many of them farms, that were needed to move the new airport project forward. It has accrued USD5 million every month over the past few years from the Citizenship by Investment Programme specifically for its construction, which is regarded as its number one priority, "the only missing link for the country now" along with a new cruise village and a new port, also improvement in general infrastructure health facilities, and with public sector resources directed or redirected to it.

An International Airport Development Company has been set up and a group of international experts carried out a series of geotechnical studies in Aug-2020. Besides the construction of the airport itself, the government will build new homes for some impacted residents.

A five-star destination for the environmentally aware

Over the past few years, the government has been working with hotel developers and investors to turn Dominica into a five-star destination by modernising its infrastructure and attracting ultra-luxury yet environmentally-friendly resorts. A price check on vacations to the country reveals a typical price of USD2,000 per week each for a couple.

Numerous expressions of interest to build already received

Last year, Prime Minister Skerrit announced that there were numerous proposals and firms from China, India, and Dubai, including two multilateral agencies and independent developers in Europe and the Americas, ready to build the international airport, and that a decision was expected this year.

He said the international airport would be located in the Wesley constituency, which is very close to the Douglas-Charles airport and would "benefit frequent regular international airline use."This part of the island is the only area with extensive flat land.

Location of Wesley and Douglas-Charles Airport

Source: Google Maps

There is scant information on what form the airport will take - runway length, terminal facilities etc. For intercontinental flights at sea level presumably a runway of a minimum 2,500m is earmarked. It would likely follow the east-west direction of the existing Douglas-Charles airport to enable take-offs and landings over the sea but any significant increase in length beyond 2.5km would take it into the Northern Forest.

There is no known reason why the existing airport could not be extended (e.g. out to sea) other than the proximity of forested uplands. There is also new surface infrastructure to take into account, connecting the new facility with the capital, with beach and other tourist resorts and with the cruise port.

Approach to Douglas-Charles Airport with the Northern Forest in the background

Source: YouTube

Which airlines might operate there?

There is growing interest in the region anyway. Caribbean Airlines has launched a new flight between Dominica and Barbados which will gradually increase to four times weekly.

Presumably an 'eco-destination' would target countries and regions with well developed environmental sentimentalities, which include the United States, Canada, the UK and Western Europe, all of which have one-change access to Dominica now from certain cities.

The destination would suit infrequent (weekly) operation of next generation long-haul versions of the Boeing 737 MAX and Airbus A320/1neo. It would probably not suit low-cost carriers although the way the aviation business is having to evolve that cannot be ruled out.

Dominica's ambitious project is achievable

It is a ambitious project, for sure, and one that will probably only be sustainable financially through the Citizenship Investment Programme up to a point, bearing in mind that other projects connected to the airport, the cruise port and supporting infrastructure such as hospitals will eat away at it. (Cape Verde under-performed touristically for years because of a lack of basic medical care facilities).

Some loans and/or targeted private capital might be required and sought in the future but private investors might be put off by the double threat of hurricanes and potential volcanic activity. Much of nearby Montserrat has been rendered uninhabitable by volcanic activity in recent decades.

Dominica is comparable in size and population to established European financial centres such as Jersey, Guernsey and the Isle of Man; all of which have a tourist offer as well, if not exactly of the environmental kind. Even allowing for the impact of the pandemic none of them have any international services presently apart from Jersey (two of 12 routes currently operated). That is a measure of Dominica's task.

Dominica has some real advantages

Firstly, its very limited exposure to coronavirus, if it can maintain it.

Secondly, its unique, pristine environmental tourism offer, again if that can be maintained (one could argue it has not been in Iceland for example, where thousands of visitors trampled over and littered up the main sites every day).

Thirdly, the fact hardly anyone knows where it is.

That is always a spur to often higher value 'adventure tourism' as long as the fundamental facilities are in place, which they either are, or will be.