Statement by Steve Nackan

 

Virgin Islanders are being asked to abandon a fully developed, procurement-backed modernization program in favour of an alternative that remains largely conceptual and offers no guaranteed scope, no delivery schedule, and no commitment to future air service.

The airlines have raised important questions about long-term cost and air-service sustainability. Affordability has been a central focus of VIPA and SkyCity throughout the development process.

But the facts show changing estimates, modest dollar impacts on travelers, and an alternative that offers no guaranteed scope, delivery schedule, or commitment to future air service.

The airlines want Virgin Islanders to believe there is an airport cost crisis.

But three facts deserve attention.

First, the reported cost of the airline alternative has risen publicly from approximately $300 million, to $390 million, and now to roughly $800 million. If the underlying estimate is changing this dramatically, how certain are the claimed savings?

Second, the airlines have publicly acknowledged that they can work with the initial November 2026 airport charge. At the July 29 public hearing, Airlines Airport Affairs Committee Chair Lorin Carr stated:

“I’d agree with that number about $50 on November 1st. And I don’t see a lot of change on November 1st, we’ll figure out how to work with that.”

That matters because the initial increase is primarily intended to recover the actual cost of operating and maintaining the airports after years of under-recovery, not to finance airport redevelopment. If the airlines can work with that charge, and it will remain largely unchanged for several years, why have Virgin Islanders been subjected to repeated warnings about service cuts and economic harm?

Too often, the public discussion has blended the initial 2026 airport charge adjustment with a separate airport charge that would apply only after two modernized airports have been delivered years later. Those are two very different issues, separated by time and circumstance, yet they are frequently presented as though they were one and the same. Virgin Islanders deserve a clear understanding of that distinction.

Just as importantly, independent aviation experts have examined these questions. Two separate aviation advisory firms concluded that air traffic in the Virgin Islands is expected to continue growing over the long term even after accounting for higher airport charges. Their analyses do not support predictions of sustained traffic decline or an air-service collapse. If independent experts do not forecast the catastrophic outcomes being suggested, Virgin Islanders should ask whether those warnings are being overstated.

Third, airport charges remain one of the smallest components of the overall travel budget – both before and after the step up – and by small I mean in the single digit percentages of overall travel costs. Those facts do not end the debate, but they should encourage Virgin Islanders to look beyond headlines and examine the alternatives on a like-for-like basis.

All of this leads to a fundamental question:

Should alarming headlines, changing estimates and hypothetical future consequences distract the Territory from a fully developed, competitively procured modernization program that is ready to move forward?

We Heard the Airlines

One claim that deserves to be addressed is the suggestion that airline concerns have not been heard.

Over the past several years, VIPA and SkyCity have engaged extensively with the airlines through meetings, workshops, technical reviews, operational discussions, financial reviews and formal consultations. The airlines themselves have acknowledged that this process involved thousands of hours of engagement. Concerns were raised, alternatives were explored, and the program evolved materially as a result.

Reasonable people can disagree on the preferred solution. But it would be inaccurate to suggest that the airlines have been ignored. Significant efforts have been made to find common ground, and that engagement can and should continue.

Putting Airport Charges in Perspective

For years, airport users, including the airlines, have benefited from charges that did not fully recover the cost of operating and maintaining the facilities they use. The November adjustment largely corrects that under-recovery. It amounts to approximately $23 to $25 per passenger. For roughly the cost of a sandwich and a drink, a short taxi ride, or a reserved seat, the airport system can recover more of its operating costs while improving maintenance, safety, reliability and service levels.

With all due respect, that hardly sounds like a crisis worthy of scaring the local community about service cuts.

And what about the larger increase after the modernized facilities are delivered?

That increase is estimated at approximately $72 to $73 per passenger. Put differently:

For approximately the cost of checking a bag on many airlines, plus a shared taxi ride from the airport to downtown Charlotte Amalie, the U.S. Virgin Islands can modernize two airports that serve as the front door to its tourism economy and its lifelines to the world.

This perspective has been largely missing from the public debate.  Large percentages have been used to mask simple realities for effect.

Every cost matters. But costs should be evaluated in actual dollars, placed in proper context, and weighed against what the Territory receives in return. Even after modernization, airport charges will remain only a small fraction of the overall cost of a typical vacation to the Virgin Islands – single digit percentages of the total cost for critical economic infrastructure.

A Deliverable Program versus a Concept

The airlines have created the impression that there are two competing airport programs and that the Territory simply needs to choose the cheaper one.

That is not what exists today.

The VIPA/SkyCity program is the product of years of engineering, design development, due diligence, technical review, operational planning, consultation, commercial development and public procurement. It has been developed specifically to meet the Territory’s current long-term needs and is ready to move forward.

VIPA, its independent engineer, SkyCity and their technical advisors reviewed the airline proposal and concluded that it remains at an earlier stage of development than the VIPA/SkyCity program – and fundamentally flawed. Unlike the procurement-backed modernization plan, it has not undergone any meaningful level of due diligence, engineering, design development, or market testing. Its reported cost has also changed significantly over a short period of time, raising legitimate questions about the certainty of the claimed savings.

Some key assumptions, including construction costs and scope requirements, have not yet been validated through the same development process. As a result, Virgin Islanders should evaluate projected savings with appropriate caution and skepticism.

A concept can be made to look inexpensive. Delivering it is another matter entirely.

More fundamentally, those asking the Territory to step away from a fully developed modernization program should bear the burden of demonstrating that their alternative can deliver equivalent outcomes at lower cost and lower risk. Assertions and headlines are not enough. The question is not whether an alternative concept exists. The question is whether it has been proven to provide a more credible path forward for the people of the Virgin Islands. After years of planning, engineering, consultation, procurement development and due diligence on the VIPA/SkyCity program, that burden of proof should be a high one. To date, it has not been met.

Modernization and Collaboration Can Happen Together

Moving forward with airport modernization does not mean discussions with the airlines come to an end.

The airlines are important business partners. Their success matters to the airports, to tourism, and to the wider Territory. VIPA and SkyCity have consistently demonstrated a willingness to continue engaging with the airlines, reviewing ideas, exploring efficiencies, addressing concerns and identifying opportunities to improve outcomes for everyone.

Modernization and collaboration are not mutually exclusive.

The Virgin Islands can and should do both.

But collaboration should not become a reason for indefinite delay. Construction costs continue to rise, airport infrastructure continues to age, and any alternative approach would still require additional planning, engineering, design, approvals, procurement and consultation before construction could begin – potentially delaying delivery by years.

Delay Is Not Free

Its greatest cost is that Virgin Islanders continue to wait for the airports they need and deserve.  And it should not be lost that Virgin Islanders are clearly being told what it is they deserve.

The Most Important Question Remains Unanswered

For months, Virgin Islanders have been warned that modernization could reduce future air service and increase air fares.

That concern deserves serious consideration.

But what exactly does the airline alternative promise?

The answer is simple:

Nothing.

The airline alternative offers no commitment regarding routes, capacity, fares, future growth, or continued levels of service. Yet Virgin Islanders are being asked to reconsider a fully developed modernization program based largely on concerns about what airlines might do in the future.

That is not a criticism of the airlines. Airlines must retain the flexibility to make commercial decisions in changing markets.

It is simply a criticism of their flawed approach, and an important reality.

The airline alternative cannot credibly be presented as the solution to future air-service concerns when it offers no commitment whatsoever regarding future air service.

Looking Forward

Everyone agrees the airports need modernization, not half or band aid measures.

The real question is how best to deliver it. The Virgin Islands should consider not only cost, but also certainty of delivery, timing, resilience, accessibility, passenger experience, future growth and the consequences of delay.

The airline proposal does not eliminate the need for future investment. Much of it simply defers that investment.

The choice is not whether to modernize. It is whether to move forward with a fully developed modernization program today, or return to an earlier-stage concept that has yet to demonstrate equivalent scope, equivalent certainty, equivalent risk or equivalent value for the people of the Virgin Islands.

The U.S. Virgin Islands deserves airports that are ready not only for today, but for the next generation of tourism, investment, growth and opportunity.

The U.S. Virgin Islands cannot modernize its airports on headlines and hypotheticals.

It must modernize them on facts.

 

About Steve Nackan