fp Turks and Caicos

A new airline ground handling company that is expected to lead to more international flights to the Turks and Caicos Islands is being questioned by competitors for its partnership with the TCI Airports Authority.

Servisair PLS formed a joint venture with the Airports Authority (TCIAA) in July 2011, according to Financial Services Commission records obtained by the fp.

The new local company is a division of international ground services company Servisair, which operates in 121 locations in Europe, Canada, Asia and the United States, according to its website.

Servisair holds 70 percent of the shares in the TCI operation that has yet to get off the ground, while the authority — a statutory government body — holds 30 percent of the shares, according to FSC records. One of the three directors is TCIAA Board Chairman Herbert Ingham.

“In early 2009, the Airports Authority and its board were faced with complaints from various carriers who’ve indicated that because of the non-competitive nature of the ground handling services and the level of services that they are receiving have threatened to pull out,” Authority CEO John T. Smith told the fp.

The authority’s board began negotiations in 2010 with Servisair about becoming the third handling company providing services at the Providenciales International Airport, Smith said. Board minutes show that the joint venture was discussed at several meetings before being approved by the board at its Oct. 2, 2010, meeting.

Andre Garneau, Queen’s Counsel in the Attorney General’s Chambers who was legal advisor to the board at that time, told the fp that he followed the joint venture agreement from the beginning and approved it.

Currently ground services for American Airlines are handled by American with local company TCA Handling. Most other airlines are handled by Flight Support Limited, which recently partnered with international ground services company World Flight Services.

“I am appalled that the TCIAA as the regulator would establish a private company with foreign partners and promote such incestuous relationships where they hold financial interest in a business which they themselves regulate,” Flight Support Chairman Lyndon Gardiner told the fp.

“Competition for me is not the issue here. I don’t believe any business should be forced to compete with a government body where that body at the same time acts as regulator and is competing for the same business. The Turks and Caicos is seemingly the only country in which this unfair practice can be tolerated. This is definitely not an even playing field.”

The fp obtained a copy of a Feb. 12 letter from Shaun Malcolm and Joshua Harvey, the directors of SkyBlue Aviation Ltd., complaining about the joint venture and asking for intervention. The letter was sent to the governor, government CEO Patrick Boyle, Attorney General Huw Shepheard, members of the governor’s Advisory Council and Consultative Forum Chairwoman Lillian Misick.

Malcolm has a memorandum of understanding with M Aviation to provide ground support and fuel at a new fixed base operator (FBO) on airport property across the runway from the main terminal. He also is involved with Skycruise Airways, a new airline that intends to operate local and international flights from the new FBO.

Gardiner, who also operates local carrier Air Turks and Caicos, and local carrier Caicos Express Airways unsuccessfully objected to Skycruise’s entry into the market, saying the country is too small for a third local carrier.

Malcolm told the fp that he believes the authority’s joint venture with Servisair was done without the board’s consent and interfered with his intentions to provide similar services.

Misick called for a closed meeting of the forum for Feb. 17, asking all parties to attend, but she said Boyle — who is acting governor this week while His Excellency the Gov. Ric Todd is in London — and Shepheard “overruled” her because the forum has no power to conduct such inquiries.

“I felt this hearing was the most prudent way to determine whether these very serious allegations have any basis in fact,” Misick said in an e-mail obtained by the fp. “Not to mention that it would have given members of the TCIAA an opportunity to dispel the aspersions that have already been cast on their integrity.”

“There’s nothing untoward at all,” Smith told the fp. “I wouldn’t be part of it if it was.”

Smith said the authority has no say in the operation of Servisair PLS or which handler a carrier chooses to use, but the authority will make money from the joint venture that will go into government coffers. He said he doesn’t believe the joint venture gives Servisair an unfair advantage, but that it does create more competition that can improve costs and services.

“We have to ensure there’s a level playing field and that you are able to provide the level of service and have the service able to grow with the operation,” Smith said. “If we’re not able to do it, then we would not be able to attract the carriers we’re looking to attract.”

“Unless you have it, you’re not going to get the passengers,” Smith said.

Requests for comment from Servisair headquarters in Houston, Texas, were not answered, but Smith said the company should be ready for business within a few months.

The interim government has refused to comment.

“The government cannot comment on this dispute as it is a private matter between Mr. Malcolm and Mr. Harvey on the one hand, with some involvement of Mr. Gardiner, and the Airports Authority on the other,” said governor’s spokesman Neil Smith. “If the parties are unable to resolve the dispute through discussion, it is always open to them to resort to the courts.”