American Airlines is to cut back on its scheduled service to Grenada just weeks after the reintroduction of the service to the island following a 10-year break, tourism officials have said.

The resumption of service was secured by a US$1.5 million guarantee to the airline.

Chairman of Grenada's Airlift Committee Michael McIntyre confirmed that the carrier, which resumed daily flights to St George's last month, will reduce its service to three times a week as of February.

Tourism officials are concerned that a downturn in the global economy could force a second pull-out by the airline.

Revenue guarantees

"We have some concerns because of the economic situation in the world and we have been talking to American Airlines on the possibility of reducing some of the services because this whole thing is based on revenue guarantees," McIntyre said.

Grenada secured a commitment from American Airlines in April this year, after a number of local and foreign investors, including Four Seasons, Camper and Nicholson and St George's University provided a guarantee of US$1.5 million to the airline.

"We don't want to go and put too many flights on and start losing a lot of money, so we are in the process of negotiating with them now to possibly reduce the service," McIntyre said.

Since the airline resumed daily flights to Grenada in November, there have been concerns about the reduction in the number of passengers.

"I think we all have to accept that there is going to be a slowdown in tourism generally, worldwide because of the present economic situation," McIntyre said.

"So we have to hope that things will pick back up, but we felt that we had to be cautious and take the necessary steps to reduce service ... I am sure that if the demand keeps going up American will adjust as they see fit to maintain even more than the three services, but we have more or less agreed that we will reduce services from the beginning of February".

Grenada's economy has depended heavily on tourism since production dropped significantly in traditional revenue earners, cocoa, nutmeg and bananas.

- CMC