Mon | May 29, 2017

CAL still flying in the red

Published:Wednesday | September 24, 2014 | 9:00 AM

The Trinidad and Tobago government will pour more funds into loss-making Caribbean Airlines Limited (CAL).

Support for the airline since 2013 and up to 2015 is likely to total TT$1.8 billion.

Finance Minister Larry Howai told the Standing Finance Committee of the Trinidad House of Representatives that the airline would remain in the red for at least three more years and that the government would have to provide funds up until 2017.

Howai also told legislators that a restructuring plan had been put in place that would lead to the gradual reduction of the subsidy given to the airline over the next three years.

Earlier, Opposition Leader Dr Keith Rowley said CAL had received TT$477 million in support in 2013, TT$570 million in 2014 and was estimated to receive another TT$718 million in 2015.

Former works minister Colm Imbert said that the assistance for 2015 would be more in the region of $730 million, following Howai's disclosure that the government would be allocating an additional TT$11.3 million to CAL to assist with debt repayment.

Rowley noted that there was a provision for an equity injection of TT$318.3 million in 2014 and asked when this injection took place and why was it not made public.

Howai said most of the subsidy to CAL was a result of the fuel subsidy estimated at US$50 million and the support for the Tobago air bridge valued at US$26 million.

The Finance Minister said that the airline had also incurred a loss on the Venezuela route due to the devaluation of the Bolivar currency.

"This was further impacted by the fact that you cannot get funds out of Venezuela at this point in time. So the monies to pay for that Venezuela route has been tied up and has further tightened the cash flows of Caribbean Airlines. That figure is US$45 million," he said, adding that losses came as a result of the integration of Air Jamaica.

The Jamaican Government owns 16 per cent of CAL, a stake it acquired when it sold Air Jamaica to Trinidad.