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US$270,000 monthly bill

Published: 
Tuesday, March 14, 2017
CAL paying for 767s it doesn’t use
Caribbean Airlines Limited Vice Chairman Michael Quamina, right, listens to Chief Executive Officer, Capt Jagmohan Singh, during yesterday’s Joint Select Committee meeting. PHOTO: SHIRLEY BAHADUR

Caribbean Airlines Ltd is saddled with a US$270,000 monthly bill for breaking its lease on two 767 jets that are now flying for Air Canada.

The issue was brought to the fore as company officials appeared before yesterday’s Joint Select Committee meeting in Parliament.

“We are still incurring payments on the 767s and that goes until August 2017. The leases were due to expire in 2017. We returned the aircraft but given that we were returning, we had to renegotiate with lessors (a person who leases property),” CAL chief executive officer Captain Jagmohan Singh said, as he noted US$135, 000 was due for each carrier.

The 767s, which once served the retired London route for CAL, are now used by Air Canada.

The committee also heard that CAL experiences some US$40,000 in credit card fraud per month. This activity occurred on some of the most popular routes, including Port-of-Spain to New York, Guyana to North America, Kingston to New York and out of Caracas, where fraudsters used other people’s information to make bookings on CAL’s website.

However, Senior Manager Financial and Revenue Accounting, Adrian Agarrat, said systems were being put in place to deal with this, as it was of serious concern to the industry. He said in 2013 it was discovered there was a US$20 million accounting error which was since rectified by external auditors.

Regarding the submission of documents, CAL was warned by Senator David Small that it must comply with the committee’s request.

At the previous hearing, the committee requested a document which was not publicly specified, but had still not received it up to yesterday. In giving an explanation, however, CAL vice chairman Michael Quamina expressed concern in submitting the document, saying it was confidential.

But Small said it was not up to the management to determine what documents ought to submitted, saying full compliance was expected by the committee.

Quamina then assured that they would submit the document within 48 hours

On the request for documents regarding management of the tender process and evaluation documents for purchasing aircraft, Small said this was also not done.

Tender and evaluation documents for the 2011 purchase of five ATR aircraft were still outstanding. The ATRs belong to a $200 million fleet from which regional aviation bodies reported five engine fire warnings from December 2015 to December 2016. However, the Civil Aviation Authority of T&T does not publish these incidents.

Colville Carrington, VP Maintenance and Engineering, also assured this would be done.

It was also revealed that according to a recent survey conducted by the company, some 66 per cent of employees were dissatisfied with management and in particular the direction in which the company was heading.

​TOBAGO AIRBRIDGE WOES

On the perennial problem of members of the public having difficulty in obtaining flights to and from Tobago and enduring longs lines, Quamina said the issue was the lack of a proper booking system and not an equipment problem.

“People are just booking flights and just turning up when they want. We’re looking to bring an end to that,” Quamina added. But Small was not impressed, saying this must be addressed urgently. On the challenges affecting the profitability of the airline, Quamina said the load of the various routes were quite impressive, but the cost needed to be rationalised.

“I don’t think that the airline has yet narrowed in on an ability to properly allocate cost per route. Once we get that it will return to profitability and the airline is online to return to profitability within the next 12 to 24 months,” Quamina said.

The committee also noted that some 28 per cent of CAL’s pilots were over 56 years and the official retirement age was 60. But Quamina said a proper manpower audit was expected to be completed soon, which will determine the proper allocation of staff that was required. But he said pilots can work up to 65 at CAL.