SHAR­LENE RAM­PER­SAD

& Gail Alexan­der

The State will fi­nance the re­trench­ment of 25 per cent of staff at Caribbean Air­lines (CAL) at an es­ti­mat­ed cost of $110 mil­lion.

This was re­vealed by Fi­nance Min­is­ter Colm Im­bert in the Sen­ate yes­ter­day af­ter he was asked by Op­po­si­tion Sen­a­tor Wade Mark how the sev­er­ance pack­ages for the 450 em­ploy­ees would be fi­nanced.

On Mon­day, the air­line an­nounced it had suf­fered over $172 mil­lion in loss­es for the first quar­ter of 2021 and, in an ef­fort to en­sure a sus­tain­able busi­ness mod­el go­ing for­ward, it would be re­trench­ing up to 450 em­ploy­ees and cut­ting its fleet and routes.

Yes­ter­day, Im­bert said the air­line was at the be­gin­ning of the con­sul­ta­tion process for staff re­duc­tion and is fi­nal­is­ing the ex­act num­ber of per­son­nel to be sent home.

“Caribbean Air­lines does not have the re­quired fi­nances for the sev­er­ance pay­ments and there­fore the sev­er­ance pay­ments will be fi­nanced by the Min­istry of Fi­nance,” Im­bert said.

Asked by Mark the val­ue of the sev­er­ance pack­ages, Im­bert re­spond­ed, “The es­ti­mate giv­en to the Min­istry of Fi­nance at this time, which is sub­ject to fi­nal­i­sa­tion, is in the vicin­i­ty of $110 mil­lion.”

Mark al­so asked how the pro­posed re­trench­ment would af­fect CAL’s fu­ture op­er­a­tions.

Im­bert said the air­line had in­formed his min­istry that pas­sen­ger de­mands on its routes are fore­cast­ed to de­crease in the short to medi­um term by both the In­ter­na­tion­al Air Trans­port As­so­ci­a­tion (IA­TA) and CAL’s con­sul­tant, Amadeus.

He said he was told air traf­fic is fore­cast­ed to re­turn to pre-COVID-19 lev­els by 2023. Im­bert said with these pre­dic­tions, CAL has de­cid­ed to re­duce its fleet and sub­se­quent­ly, its staff com­ple­ment.

A variety of Caribbean Airlines (CAL) aircraft parked in hangers at the Piarco International Airport Monday.

ABRAHAM DIAZ

He was asked for a break­down of the re­duc­tion in the fleet and re­spond­ed, “I am ad­vised and I must say I am sad­dened by all of this ... This is not some­thing that any of us would have want­ed to see. I am ad­vised that Caribbean Air­lines is go­ing to re­duce its jet fleet to eight jet air­crafts and its tur­bo­prop fleet to five ATRs.”

That takes its fleet down from the cur­rent 16 (sev­en ATRs and nine Boe­ing 737 jets) to 13.

“Any sep­a­ra­tion of work­ers is di­rect­ly as a con­se­quence of the re­duc­tion in the fleet size and re­duc­tion in the routes.

“Notwith­stand­ing re­duced air­line size, the routes will be op­er­at­ed at the high­est lev­el of safe­ty and ser­vice,” Im­bert said.

The min­is­ter said the com­pa­ny is putting in place sup­port sys­tems for any po­ten­tial­ly af­fect­ed work­ers. These in­clude coun­selling ser­vices for them and their fam­i­lies, through the Em­ploy­ee As­sis­tance Pro­gramme, out­place­ment ser­vices co­or­di­nat­ed with the ex­ter­nal re­cruit­ing agen­cies and Labour Min­istry, tran­si­tion­al train­ing re­gard­ing ca­reer guid­ance/sup­port and fi­nan­cial man­age­ment.

This is in ad­di­tion to com­pen­sa­tion pack­ages em­ploy­ees will be en­ti­tled to up­on sep­a­ra­tion.

Some in­ter­na­tion­al sites up to re­cent­ly had de­scribed CAL as the largest air­line in the Caribbean, em­ploy­ing 1,700 with 23 des­ti­na­tions, in­clud­ing some for­mer­ly op­er­at­ed by Air Ja­maica.

Ac­cord­ing to da­ta from CAL’s cor­po­rate com­mu­ni­ca­tion man­ag­er Dionne Ligoure, the air­line saw a mas­sive re­duc­tion in pas­sen­ger num­bers from the two pre­vi­ous years.

Ligoure said in 2018, CAL trans­port­ed 2,526,129 pas­sen­gers. In 2019, that num­ber in­creased slight­ly and the air­line record­ed 2,595,526 pas­sen­gers.

In 2020, how­ev­er, on­ly 741,676 pas­sen­gers were record­ed.

Ligoure said the air­line is still re­fin­ing its strate­gic plan in re­la­tion to which routes will be cut and which will con­tin­ue to be ser­viced.

She was un­able to give any da­ta about pas­sen­ger trav­el by route, as she said it was com­pet­i­tive­ly sen­si­tive in­for­ma­tion.

Asked whether the re­trench­ment will be done be­fore the mid-Ju­ly time­frame an­nounced by the Prime Min­is­ter for the re­open­ing of the coun­try’s bor­ders, Ligoure said, “The con­sul­ta­tions are tak­ing place over the next two weeks to a month.”

Guardian Me­dia Lim­it­ed reached out to Trinidad and To­ba­go Air­line Pi­lots As­so­ci­a­tion (TTAL­PA) ex­ec­u­tive ad­min­is­tra­tor Shelly Sadaphal, en­quir­ing whether the union had met with the com­pa­ny yet to dis­cuss the re­trench­ment.

Sadaphal said, “We are still await­ing com­mu­ni­ca­tion from CAL on that.”

But Ligoure dis­put­ed this, telling GML, “I can go on record to con­firm that the com­pa­ny con­tact­ed the union at 9.45. The de­tailed dis­cus­sions will take place in the com­ing days and weeks.”

Caribbean Airlines CEO Garvin Medera.

Abraham Diaz

GML al­so tried con­tact­ing Bus­ta­mante In­dus­tri­al Trade Union (BITU) pres­i­dent gen­er­al Ka­van Gayle in Ja­maica for com­ment on the re­trench­ment. BITU is said to be the union rep­re­sent­ing CAL em­ploy­ees based in Ja­maica. Gayle read the mes­sages sent via What­sApp but up un­til press time, he had not re­spond­ed.

Grim out­look for air­lines glob­al­ly

In the In­ter­na­tion­al Air Trans­port As­so­ci­a­tion’s (IA­TA) Out­look for the glob­al air­line in­dus­try’s April 2021 up­date, the as­so­ci­a­tion fore­cast­ed a grim year ahead for air­lines across the world, with loss­es of ap­prox­i­mate­ly US$47.7 bil­lion in 2021.

This es­ti­mate was a mas­sive re­duc­tion from the loss­es suf­fered in the first year of the COVID-19 pan­dem­ic, es­ti­mat­ed to be US$126.4 bil­lion.

The fore­cast said in­dus­try rev­enues are ex­pect­ed to to­tal US$458 bil­lion in 2021.

How­ev­er, that amount is just 55 per cent of the $838 bil­lion gen­er­at­ed in 2019. In com­par­i­son, in 2020, the in­dus­try earned a mea­gre $372 bil­lion.

In its fore­cast, IA­TA in­cludes Trinidad and To­ba­go in its Latin Amer­i­ca group­ing.

In its break­down of loss­es and prof­its for 2021, the IA­TA re­port gave the fol­low­ing out­look for Latin Amer­i­can car­ri­ers: “Latin Amer­i­can car­ri­ers are ad­van­taged by hav­ing al­most half (48%) of their RPKs (rev­enue pas­sen­ger kilo­me­tres) be­ing gen­er­at­ed on do­mes­tic mar­kets, in par­tic­u­lar the large Brazil­ian home mar­ket. They are start­ing from rel­a­tive­ly large loss­es in 2020 and, in some parts of the re­gion, a slow rate of vac­ci­na­tion. Rev­enues from the growth in do­mes­tic trav­el are fore­cast to cut net loss­es by more than two-thirds this year—to -20.4% of rev­enues in 2021 from -80.1% in 2020.”

The re­port al­so states that Latin Amer­i­can air­lines should ben­e­fit from large home mar­kets but added that the out­look is ‘cloud­ed” by the chal­lenges of con­tain­ing vari­ants of the COVID-19 virus and slow roll­outs of vac­ci­na­tion pro­grammes.

Mariano Browne, Chief Executive Officer (CEO) of the Arthur Lok Jack Global School of Business.

Browne: Re­trench­ment over­due

For­mer Min­is­ter in the Min­istry of Fi­nance, Mar­i­ano Browne, says Caribbean Air­line’s plans to re­struc­ture and cut staff are over­due.

In an in­ter­view with Guardian Me­dia yes­ter­day, Browne said CAL had been af­fect­ed very bad­ly by the shut­downs brought on by the pan­dem­ic.

He said al­though the air­line’s fleet would have been ground­ed, it would still have been pay­ing on its month­ly leas­es to re­tain those air­craft.

With T&T’s bor­ders closed since late March 2020, Browne said state-owned CAL got the short end of the stick.

“CAL, un­for­tu­nate­ly, has been stuck, it is owned by Gov­ern­ment so, there­fore, it can’t con­tra­dict Gov­ern­ment poli­cies and it can’t put any pres­sure on the Gov­ern­ment to change its poli­cies, but there must be some kind of change in the pol­i­cy,” he said.

He said the en­tire ex­emp­tion process was “back­ward,” adding once the bor­ders re­open, Gov­ern­ment al­so needs to be clear on its quar­an­tine poli­cies.

He ques­tioned what the en­try pol­i­cy would be like, ask­ing whether those who are ful­ly vac­ci­nat­ed will be re­quired to quar­an­tine up­on en­try.

Prime Min­is­ter Dr Kei­th Row­ley, at a me­dia con­fer­ence on June 19, said in­com­ing trav­ellers will be dealt with in sep­a­rate groups for those who are vac­ci­nat­ed and un­vac­ci­nat­ed and the State’s cri­te­ria for en­try will be de­ter­mined by the Min­istry of Health in the com­ing weeks.

Yes­ter­day, Browne said, “All of those are things that have to be ad­just­ed, there are ex­am­ples of how this has been han­dled else­where in the Caribbean, in Bar­ba­dos in par­tic­u­lar, which has been very suc­cess­ful in how it has been man­ag­ing. We have been quite back­ward in do­ing that and that is not CAL’s fault, that is the fault of the peo­ple who have to make the de­ci­sions, cer­tain­ly in re­spect to na­tion­al se­cu­ri­ty and every­thing else that takes place in terms of the man­age­ment of air­port traf­fic.”

He said he be­lieves CAL has done all it can at this time to stay afloat.