Tues­day's an­nounce­ment in the Sen­ate by Fi­nance Min­is­ter Lar­ry Howai that the ma­jor­i­ty state-owned car­ri­er Caribbean Air­lines (CAL) had reg­is­tered a loss of US$70 mil­lion for 2012, de­spite a fu­el sub­sidy of US$40 mil­lion, set the stage for Thurs­day's re­place­ment of the air­line's board.As Mr Howai point­ed out at yes­ter­day's news con­fer­ence to an­nounce the new board, the Trea­sury has its lim­i­ta­tions and T&T sim­ply can­not af­ford the lev­el of trans­fers and sub­si­dies in the fu­ture that has be­come the cus­tom in the past.

The out­go­ing CAL board, chaired by busi­ness­man Ra­bindra Moo­nan, al­so ap­peared to be pre­sid­ing over an air­line spi­ralling fur­ther and fur­ther out of con­trol, with last week's spon­sored tick­ets sto­ry be­ing added to with the dis­clo­sure that the air­line has had to write down mil­lions of dol­lars in re­ceiv­ables for car­ry­ing car­go paid for by cred­it cards.

These rev­e­la­tions in­di­cate, on the one hand, board in­ter­fer­ence in the day-to-day run­ning of the air­line's op­er­a­tions and, on the oth­er, a lack of sys­tems to col­lect all the rev­enue owed to the com­pa­ny.When these is­sues are tak­en to­geth­er with last year's de­ci­sion to wet-lease, at great ex­pense, 767 air­craft to start the route to Lon­don and the in­ex­plic­a­ble 2010 de­ci­sion not to lease the ATR air­craft for short routes, it is clear that CAL is in need of a thor­ough re­view and re­assess­ment.

In that con­text, the Min­is­ter of Fi­nance de­serves to be com­mend­ed for quick­ly re­mov­ing a board wide­ly per­ceived to be part of the air­line's prob­lem and re­plac­ing it with one like­ly to be more aligned to car­ry­ing out his man­date "to con­duct a thor­ough and com­pre­hen­sive di­ag­nos­tic of the air­line, with a view to for­mu­lat­ing an ac­tion plan to take CAL for­ward."

Part of that ex­er­cise must be to as­sess what the air­line has done wrong in the last three years and to make rec­om­men­da­tions to en­sure the same or sim­i­lar mis­takes are not made again.Philip Mar­shall, the re­tired coun­try man­ag­ing part­ner of Ernst & Young T&T, has been ap­point­ed to chair the new in­ter­im board. Mar­shall, a for­mer In­de­pen­dent Sen­a­tor, now serves as the Di­rec­tor of the Strate­gic Man­age­ment Of­fice of the Min­istry of Fi­nance and brings ex­per­tise in cor­po­rate gov­er­nance.

One of the first tasks of the Mar­shall-led board must be to com­plete the au­dit of the air­line's 2012 fi­nan­cials and to en­sure that the ac­counts for 2011 and 2012 are pub­lished.The oth­er must be to en­sure that the new board un­der­stands that its role is to set the pol­i­cy for the air­line and en­sure it is fol­lowed by the CAL man­age­ment. Their role is not to mi­cro-man­age the air­line.

Part of the prob­lem with CAL seems to be a lack of over­sight of the air­line by the Min­istry of Fi­nance, which holds the State's 84 per cent own­er­ship stake on be­half of the pop­u­la­tion.Look­ing ahead, the board has its work cut out for it and must im­me­di­ate­ly dive in­to the task at hand: to take the nec­es­sary steps to turn the air­line around, both fi­nan­cial­ly and from a cor­po­rate gov­er­nance stand­point, in or­der to re­store pub­lic con­fi­dence in the CAL brand.