State-owned Caribbean Air­lines has an­nounced it will tem­porar­i­ly lay off one-third of its staff while at the same time cut the salaries of every­one mak­ing over $7,500 per month.

Un­der the terms of the cuts, the high­er one earns the larg­er the salary re­duc­tion. The de­creas­es in salaries are ex­pect­ed to last for eight months and range be­tween 5 and 15 per cent.

The air­line, like all car­ri­ers glob­al­ly, is in fi­nan­cial trou­ble and has been in a tail­spin since the COVID-19 pan­dem­ic hit the re­gion, forc­ing the clo­sure of bor­ders and ground­ing of the air­line.

CAL has on­ly been able to fly the un­prof­itable Trinidad/To­ba­go route in an ef­fort to keep the twin-is­land re­pub­lic con­nect­ed and do so at 50 per cent ca­pac­i­ty and do a few char­ter flights for na­tion­als re­turn­ing home.

For a while, it was able to stay afloat due to a US$65 mil­lion gov­ern­ment-guar­an­teed loan, but this mon­ey has now run out and the glob­al sit­u­a­tion has not im­proved dra­mat­i­cal­ly.

There­fore, hard de­ci­sions had to be made and the air­line’s man­age­ment has made them.

How­ev­er, just as CAL’s man­age­ment is send­ing home work­ers and cut­ting salaries, in­clud­ing their own, comes word that its Chief Ex­ec­u­tive Of­fi­cer Garvin Med­era re­ceived a $500,000 bonus.

From what we can glean, the bonus is part of his con­tract and is based on his per­for­mance in the job. In ad­di­tion, the bonus was paid based on the per­for­mance of the air­line in 2019 and not in 2020.

Fur­ther, re­ports are that bonus­es were ap­proved by the board of di­rec­tors for all the staff for 2019 and was await­ing the Gov­ern­ment’s HR com­mit­tee’s ap­proval for pay­ment when COVID-19 hit. These would have been the first bonus pay­ments the staff had ever re­ceived since the start-up of the air­line and was a re­ward for turn­ing it around and hav­ing two con­sec­u­tive years of in­creas­ing op­er­a­tional prof­its.

In prin­ci­ple, Mr Med­era is en­ti­tled to his bonus pay­ment, as­sum­ing he met the key per­for­mance in­di­ca­tors and that it was a le­git­i­mate part of his con­tract.

If the coun­try and State En­ter­pris­es want the best to lead them, then salaries will have to be paid to at­tract the tal­ent re­quired.

One must not for­get the na­ture of the in­dus­try that CAL is op­er­at­ing in. It is one in which there is fierce com­pe­ti­tion - where even the most suc­cess­ful­ly run air­lines are con­stant­ly chal­lenged in man­ag­ing costs and max­imis­ing rev­enue.

It is true the tim­ing may be bad and for work­ers who did not re­ceive their bonus­es and are be­ing asked to take more pain, it is a bit­ter pill to swal­low.

Should the bonus pay­ment have been de­layed? Maybe. But it must be paid.

Mr Med­era is well with­in his rights to de­mand and ac­cept his bonus. What the chal­lenge will be now for him and his team is en­sur­ing that it weath­ers this present sit­u­a­tion and en­sures CAL can soar in­to the fu­ture prof­itably.