Former Minister in the Ministry of Finance, Mariano Browne, yesterday expressed fears that Caribbean Airlines Limited (CAL) may turn into another BWIA West Indies Airways Limited because of the management practices being adopted. His comments come on the heels of CAL wet leasing a third B-767 aircraft to facilitate the reintroduction of the London route from June 14 with two flights per week.
In a wet-leasing arrangement, the aircraft, complete crew, maintenance and insurance is provided by the leasing company. Omni Jet Trading International, a company based in Maryland, USA, is leasing the aircraft to CAL. CAL had originally planned to lease two B-767s to service the London route but these aircraft need to be certified by the T&T Civil Aviation Authority (CAA) before they can fly to any destination.
In an interview, Director General of the CAA Ramesh Lutchmedial confirmed the process of certification for the original B-767 began in February 2012 but the process takes three months. "It is a routine certification. Once the aircraft is certificated, it can fly commercially. This is a normal procedure."
Browne said: "I fully suspect that the two flights would be operated at a loss and I expect that they would dig a deeper hole from an operating loss position. An airline burns cash, and it burns cash because when you don't make money on a particular route, essentially you lose cash, you burn cash," "Everytime the plane goes up your cash burns out diesel. Running at losses so far, may not have expired all of our cash but, continuing to do what we are doing certainly will, sooner rather than later. The reason why we closed down 'B-wee' and started CAL was to prevent this. Now we are headed straight back there.
On May 4, Finance Minister Winston Dookeran announced in the Parliament, CAL recorded a consolidated unaudited loss of US $52.8 million for the financial year ended December 31, 2011. Describing the entire situation as "a logistical nightmare" Browne said that with a wet lease "you are paying for everything. One of the reasons we closed off (the route) is that we couldn't justify the load. We very rarely flew directly to London, invariably we flew going to 'pick up' points and the reason is that we didn't have the volume of load.
"Now we are wet leasing a plane and we are doing it two times a week. We have three planes for two flights and that in itself creates issues." The London route would not work, Browne maintained. Transport Minister Devant Maharaj, in an interview on Wednesday, said that the CAA had some concerns about the original B-767 and the aircraft cannot be used until those concerns were addressed.
CAL's chairman Rabindra Moonan said he expects by July 2012, the certification process would be completed. Moonan added: "We have leased another B-767 aircraft from Omni (International Jet Trading Inc). The aircraft (B-767) cannot be certified before June 14 due to the impending Federal Aviation Administration (FAA) audit."
Asked what is the cost to lease the 767 aircraft Moonan said: "I don't have the figures at board of directors level. We agree in principle (on matters). It's a feasible lease. We have made commitments to our customers and are ensuring that it is honoured." It's about two weeks for the inaugural London route and Moonan said, the response has been "encouraging" and the passenger count has "moved to a 70 per cent load factor."
