Brent Pin­heiro

brent.pin­heiro@guardian.co.tt

First came route cuts; now come fleet cuts. As Caribbean Air­lines (CAL) con­tin­ues to look for ways to re­duce costs, the air­line will sell two of the five ATR air­craft it owns by the end of this year.

How­ev­er, CAL chair­man Rey­na Kow­lessar says the de­ci­sion to sell the air­craft "bears no cor­re­la­tion to job cuts."

Ac­cord­ing to a Jan­u­ary 8 dis­pos­al no­tice post­ed to the air­line’s web­site, two 14-year-old ATR 72-600s reg­is­tered as 9Y-TTB and 9Y-TTC are up for sale on a ‘where is, as is’ ba­sis.

9Y-TTB's planned dis­pos­al date is Oc­to­ber 1, while 9Y-TTC will be dis­posed of on March 1.

In­ter­est­ed par­ties have un­til Feb­ru­ary 6 to sub­mit a bid.

With few­er planes in ser­vice, the ques­tion of pos­si­ble job cuts aris­es.

In a What­sApp mes­sage to Guardian Me­dia, Kow­lessar was adamant that there are "ab­solute­ly no job cuts to CAL's work­force."

She added, "We have been in­clud­ing all staff in the de­ci­sion-mak­ing to date, where each de­part­ment has been rep­re­sent­ed in con­sul­ta­tion. It is a col­lab­o­ra­tive process, and we will con­tin­ue to do so."

9Y-TTB and 9Y-TTC were de­liv­ered to CAL as part of an ini­tial or­der for nine ATR air­craft. The 2011 deal was val­ued at US$200 mil­lion and was meant to re­place the air­line’s age­ing Dash 8 fleet.

The air­line even­tu­al­ly on­ly took five air­craft, pay­ing US$18.9 mil­lion each. The de­ci­sion to buy the ATRs in­stead of leas­ing them, a com­mon prac­tice in the avi­a­tion in­dus­try, caused con­tro­ver­sy at the time be­cause it sig­nif­i­cant­ly de­plet­ed the air­line’s cash as­set base.

Fast for­ward to 2026, and the air­line now has ten ATRs in its fleet, five of which are leased. They were added as the air­line em­barked on a net­work and fleet ex­pan­sion dri­ve in line with its 2023-2027 strate­gic plan.

While they are known for their fu­el ef­fi­cien­cy, Caribbean Air­lines’ ATRs re­quire a lot of main­te­nance due to their high util­i­sa­tion rates, which are amongst the high­est in the world.

The high util­i­sa­tion is di­rect­ly re­lat­ed to the air­line’s air­bridge op­er­a­tion, with main­te­nance costs rang­ing be­tween US$600 and US$800 per flight hour.

These high costs, cou­pled with heavy debt, sug­gest a piv­ot from growth to sur­vival, says one avi­a­tion ex­pert who did not wish to be named.

"Caribbean Air­lines’ strate­gic plan called for ex­pan­sion, and you are now find­ing that routes are con­tract­ing. The board needs to ex­plain the ra­tio­nale...We are not hear­ing about re­place­ment air­craft. You are hear­ing about fleet con­trac­tion and route con­trac­tion un­der the guise of net­work op­ti­mi­sa­tion. But what it is in fact are route clo­sures and now the sale of air­planes?" the ex­pert asked.

The ex­pert point­ed out that an air­line sell­ing air­craft to down­size its fleet in­di­cates there are deep­er cash flow is­sues in an in­dus­try that op­er­ates on high cash and low mar­gins. “What it is sig­nalling is shrink­age, and what fol­lows, if you have few­er planes and few­er routes, you will in­evitably need few­er staff.”

Ac­cord­ing to Fi­nance Min­is­ter Dav­en­dranath Tan­coo, Kow­lessar, un­der the di­rec­tive of Prime Min­is­ter Kam­la Per­sad-Bisses­sar, has been tak­ing “hard but sen­si­ble de­ci­sions need­ed to re­struc­ture and re­build” the na­tion­al car­ri­er.

Speak­ing with Guardian Me­dia via a What­sApp mes­sage, Tan­coo said the air­line was al­lowed to run up bil­lions in debt un­der the PNM ad­min­is­tra­tion.

"Hav­ing come in­to of­fice, it was dis­cov­ered that al­most a decade of au­dits of the op­er­a­tions had not been done as re­quired by law. CAL was be­ing run by vaps, bleed­ing the trea­sury and on the backs of tax­pay­ers of this coun­try. Re­cent re­ports by the Min­istry of Fi­nance Cen­tral Au­dit Com­mit­tee point to sub­stan­tial de­fi­cien­cies al­lowed to fes­ter by the PNM even as the air­line suf­fered from poor de­ci­sion mak­ing in route se­lec­tion, over­staffing at mas­sive salaries, hor­ren­dous op­er­a­tional short­com­ings and mas­sive rev­enue loss­es."

When asked about the pos­si­bil­i­ty of lay­offs, he said, "What I ex­pect is that all ef­forts will be made to en­sure that em­ploy­ment is tied to out­put, ex­per­tise and ca­pa­bil­i­ty and not po­lit­i­cal pa­tron­age and nepo­tism as ex­ist­ed be­fore."

How­ev­er, Tan­coo went on to say that he is sat­is­fied with the cur­rent ini­tia­tives to bring CAL ac­counts up to date, as well as stream­lined pro­ce­dures for "ef­fec­tive­ness and ef­fi­cien­cy."

Pres­i­dent Gen­er­al of the Avi­a­tion, Com­mu­ni­ca­tion and Al­lied Work­ers Union (ACAWU), Nwan­nia Sorzano, said the union recog­nis­es and sup­ports stream­lin­ing op­er­a­tions to in­crease ef­fi­cien­cy.

How­ev­er, she says some of the cost-cut­ting mea­sures are "con­trary to good in­dus­tri­al re­la­tions."

Ac­cord­ing to her, the union has been try­ing to meet with both Prime Min­is­ter Kam­la Per­sad-Bisses­sar and the Caribbean Air­lines board since their terms be­gan, but to no avail.

Sorzano said, "What is most con­cern­ing to the union is the lack of re­spon­sive­ness by the com­pa­ny and their re­luc­tance to meet and treat with ACAWU, as it leaves the work­ers of CAL vul­ner­a­ble."

ACAWU is not the recog­nised ma­jor­i­ty union for Caribbean Air­lines.