fp Turks and Caicos

A joint venture between the Turks and Caicos Islands Airports Authority and international ground handling company Servisair has been halted temporarily while a Supreme Court justice decides if the deal is legal.

Flight Support Ltd., the local ground handler for nearly all international flights except American Airlines, sought the judicial review on the grounds that the joint venture gives Servisair an unfair advantage that will bankrupt other handlers and create a monopoly.

After hearing from lawyers for the ground handlers and reading evidence submitted by the authority’s lawyer, Justice Margaret Ramsay-Hale ordered the authority to do nothing more to advance the joint venture until both sides get a full hearing.

“We feel strongly it is highly irregular for TCIAA to be placed in the conflicting position of being both a regulator of Servisair and having a financial interest in its success,” said Lyndon Gardiner, founder and chairman of Flight Support. “This backdoor nationalizing of ground handling can only lead to higher prices and less service in the future. This joint venture was deeply flawed every step of the way.”

Authority Director John T. Smith did not respond to requests for comment by press time May 16, but he told the fp in February that the joint venture is intended to improve competition and service.

Since 2009 some airlines had threatened to halt service to Providenciales because of “the non-competitive nature of the ground handling services and the level of services,” Smith said. The joint venture was approved by the Attorney General’s Chambers, and the authority’s board decided that the authority would be the local partner for Servisair.

Seventy percent of the shares belong to TCI company Servisair PLS, whose parent company Servisair operates in 121 locations including Europe and Asia, markets from which the TCI hopes to draw new direct flights.

The authority holds 30 percent of the shares, but Smith has said the authority has no say in the operation of Servisair, and that Servisair would not receive any special treatment to give it an unfair advantage over other ground handlers. Any money the authority makes in the venture goes into government coffers.

The court’s ruling May 11 specifically orders the authority not to waive any fees or taxes; provide facilities, equipment and services; or grant permits or licenses to Servisair until the challenge is decided. If Flight Support loses its challenge, it must pay Servisair for any losses caused by the ruling.

Listed as interested parties in the case are locally owned TCA Handling Ltd., which is the ground handler for American Airlines, and Sky Blue Aviation Ltd., which also wants to offer ground handling services at the airport.

Earlier this year, both TCA’s Albray Butterfield Jr. and Sky Blue’s Shaun Malcolm asked government to stop the joint venture. Government declined, saying it was a private matter between businesses and the authority that should be settled in court.

Photo: Flight Support truck at Provo airport