Minister for Tourism, insists that Bermuda should have its own airline. He does this despite the fact that small airlines operated by small countries have a generally disastrous history. Notably high on the list of airline horror stories are the airlines operated by the Bahamas and the Cayman Islands. Both these airlines have turned out to be financial disasters for their countries.

The Bahamas is now reeling from exposures during an inquiry into the operation of Bahamasair during the government of former PLP Prime Minister Sir Lynden Pindling. Bahamasair was operated by the Government and there are widespread suggestions of corruption as well as cash losses over that airline but there do not appear to be suggestions of corruption over Cayman Airways so the latter airline is probably more of an example for Bermuda. Cayman Airways has been a disaster without corruption and we think that is what would happen in Bermuda if Mr. Allen had his way.

In Cayman there is great concern over Cayman Airways. It has soaked up so much Cayman Islands government cash that money is not now available for schools, the hospital and drug rehabilitation.

The Caymanian Compass recently reported that Cayman Airways cannot realistically be expected to pay back a government loan so the loan has been converted to a $2-million subsidy. With the conversion of the 1991 loan into a subsidy, it meant that the airline had a 1991 subsidy of $4 million. The amount is greater than it seems because the Cayman Islands dollar is higher than the Bermuda dollar at about $1.15 US.

In the process of turning unrepaid loans into subsidies, the Executive Council of the Cayman Islands was told that the Cayman Airways estimated loss for 1993 is $12.9 million but it is hoped the loss will be less since the airline has been restructured. The staggering thing is that, in an attempt to keep the airline flying, the Cayman government has pumped more than $24 million into the losing operation since February of this year. The airline's business was described as "volatile'' and it has severe competition.

Of course, any Bermuda airline would also suffer from competition from the large US carriers serving Bermuda. There is the added danger that one or more of those would refuse to serve Bermuda if Bermuda used its own airline to compete with them. There is always the added danger that US airlines would serve Bermuda in the lucrative high season leaving any local airline to struggle to provide necessary and costly transportation in the off-season.

We think a Government operated Bermuda airline would be unlikely. A privately operated Bermuda airline would be likely to confuse the service of US airlines to Bermuda. In the process of trying to compete it would lose money. To keep it going, Government would have to intervene and either run the airline or provide subsidies. The result would be a huge drain on public cash.

Who, except Mr. Allen, needs it?