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Caribbean Airline’s vulnerable finances riles opposition

Published:Friday | August 14, 2015 | 12:00 AMCMC

Trinidad's transport Minister Stephen Cadiz has described as unfortunate the decision taken by state-owned Caribbean Airlines Limited to exit its London route next year to cauterise losses.

But Opposition leader Dr Keith Rowley is casting some of the blame for the airline’s financial woes on the coalition People’s Partnership government, predicting that the airline “will struggle further”.

“It cannot expect the kind of support it got from the government in 2008 because it doesn’t have the money now to do it, and what should have been a strong part of our economy with a smaller meaner leaner airline … we are right back to the problem that we had solved,” said Rowley.

Caribbean Airlines said in a statement that in addition to ending its three weekly flights on the London route in the first quarter of 2016, it would also be retiring the Boeing 767s from its fleet.
The London service performed below expectations since its launch in 2012.

Caribbean Airlines said that the Boeing 767-300s would be returned to the International Lease Finance Corporation (ILFC).

The airline, which registered a loss of US$60 million last year, said it is taking measures to suspend loss-making routes and optimise its fleet and so far this year returned two Boeing 737-800s, with two more to be removed soon, reducing the fleet size to just 12 of that model.

The Trinidad-based carrier said the move will allow it to reduce operational costs while focusing on its North American prime routes - Fort Lauderdale, New York and Toronto - and allowing it to compete harder for the budget-wise leisure travellers on these routes.

Cadiz told the state-owned television station, CNMG that he is hopeful other airlines will take up the route so as to bring income into Trinidad & Tobago.

“We need to have heavy competition on that Gatwick-Port of Spain route and we would be probably going after other airlines to see what interest they would have in servicing that route. So we have good competition on the route. I think that is absolutely critical, like the New York route, like the Miami route and also the Toronto route,” he said.

But Rowley, addressing a meeting of his People’s National Movement on Tuesday night said that a PNM government had overseen the restructuring of the cash-strapped airline, including a halt to the London route, and that when it left office in 2010, the airline company had TT$1 billion.

"Instead of leasing planes or borrowing money and paying for new planes and paying off the debt as they go along, that’s how people in the airline business seriously do it, they spent out all the cash that they met and realising we had stopped going to London, they went and they bought two planes at huge cost,” he said.

Rowley said also that because they planes were not ready for operation, “they parked them next door for God knows how long”, while continuing to pay the pilots.

“The end result is that they brought the airline right back to the brink of bankruptcy and rather than having a billion dollars in the bank and carrying out its own business going forward, without you the taxpayer, all of a sudden, you now have to find TT$200 million a year to give to the airline to keep it floating," he said.