Lead Editor Investigations
asha.javeed@guardian.co.tt
Caribbean Airlines (CAL) was expected to receive $85, 635,130 million from the Ministry of Finance for the fiscal year, according to the 2023 Draft Estimates of Recurrent Expenditure.
This sum is the subsidy paid to CAL to service the airbridge between Trinidad and Tobago.
This, however, is a reduction of $9,364,870 from fiscal 2022’s $95 million allocation.
In his last budget, Finance Minister Colm Imbert announced an increase in airfare by $50 one way to Tobago from January 2023. This increased the round-trip fare from $300 to $400.
“Revenues from international travel are used to subsidise the inter-island air bridge. Additionally, the rise in global energy commodity prices has resulted in higher operational costs for both the inter-island airbridge and seabridge. In this regard and consistent with our overall policy of sharing the burden of the cost of transport, I propose to increase the cost of inter-island air travel for all tickets by $50,” Imbert had said.
“The estimated increase in annual revenue to Caribbean Airlines for the operation of the airbridge will be $50 million, which, with this increased price, will still require subsidy of the airbridge of over $50 million per year.”
In August 2022, CAL issued a release which stated that its domestic operation was characterised by consistent losses (US$9,613,100 as at June 2022) and other critical variables such as subsidised flights, high operating costs, low prices which do not reflect actual market value and one-way peak demand periods outside of the July-August school holiday period.
The airline said as at June 2022, its total operational costs for the airbridge stood at US$18 million (US$18,777,648), while the cost per flight hour was US$17,306.
It noted that the high costs were driven by the frequency of flights and the short distance (52 miles), leading to an undesirable low block-hour utilisation of aircraft and crews and maintenance costs.
It said in terms of passenger and flight details, for the period July 17, 2021 to July 31, 2022, the airline operated 6,527 flights carrying 416,780 passengers.
“Since the re-opening of Trinidad and Tobago’s borders in July 2021, the airline has consistently increased domestic flights and added airlift operationally, within the limits of its resources. Caribbean Airlines has also remained in communication with stakeholders, keeping them advised about the factors impacting its operations. Namely, that the company is focused on operating efficiently, which involves striking a delicate balance of using its limited resources on revenue generating routes and the air bridge. It is also still in a critical period of recovery, arising from the devastating impact of the pandemic,” it had said.
“Caribbean Airlines is mindful of the need to have an effective air bridge between Trinidad and Tobago and the company continues to closely manage same, bearing in mind the considerable constraints outlined,” it added.
According to the Auditor General’s 2021 report, the Government has acted as guarantor of four loans for CAL - a US$75 million loan ($504,455,772.11) from First Citizens, a second loan of US$55 million from First Citizens, a $436 million loan from ANSA Merchant Bank and another a $443 million-plus loan from that same bank.