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Top CAL workers unqualified for jobs
The Joint Select Committee (JSC) on State Enterprises says although there are several factors contributing to the financial losses of state-owned Caribbean Airlines Limited (CAL), it can become a valuable contributor to T&T and its citizens.
Among the challenges for the airline are the frequent changes to its governance leadership since it began operations in 2007. There have been three boards, four chairmen, four CEOs, three acting CEOs, four CFOs and two acting CFOs. In addition, CAL is faced with cash flow inefficiencies due to the financing of a fleet of five ATR aircraft using the company’s cash reserves and from short term cash investment and is operating in an increasingly competitive environment with the entrance of low price competition from Jet Blue and West Jet in key markets.
But according to the JSC, CAL’s human resource focus is skewed towards pilots and management and several positions in its organisational structure are filled by individuals who do not have the required qualifications. There is also the inability to repatriate revenue earned by the airline in Caracas, Venezuela
Adding to CAL's financial burden is the Tobago air bridge fare, which is below commercial market value. The approximately $41 million budgeted for CAL as the subsidy on the air bridge this year does not cover the entire shortfall between the fare charged for flights on the air bridge and the cost of running it, making the route unprofitable.
Among the recommendations from the JSC is that the airline pursue measures to recover money owed by Venezuela and be persistent in following up with the Ministry of Finance for approval of its strategy for resolving issues with fare structuring for the air bridge service.
"CAL should immediately put in place a freeze on any increases in wages and salaries until such time that the operations of the airline is sustainably profitable," the JSC said.
The airline has also been told to fill its CFO and CEO positions and "follow through with plans to conduct a manpower audit to review and readjust the management structures."
Another key recommendation is for the airline to immediately cease international recruitment of foreign pilots.
"Given the many local pilots seeking jobs, a report on how this came to be should be provided to this committee as well as its line ministry," the JSC said.
CAL has also been advised to "urgently conduct a route analysis with a view to a reduction and or elimination of services to some North American destinations where over the past five years there has been an unabated trend of declining passenger numbers and massive financial losses." The JSC said this should be completed within the next three months.
The JSC also wants CAL to commit to refurbishment and modernization of its fleet; find the root cause of the issues with the ATR aircraft; and adopt key recommendations in the Lufthansa reports, which it said will assist the airlines towards achieving profitability by 2018.
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