Thursday, April 19, 2012

Not clear skies for Caribbean Airlines

Thursday, April 19 2012

THE SUDDEN and as yet not adequately explained resignation of Caribbean Airlines (CAL) Chairman, George Nicholas III has left questions which will need to be answered, for example, what will become of Nicholas’ initiatives which included the resumption of flights to Gatwick and the acquisition and/or lease of aircraft.

Transport Minister Devant Maharaj has advanced no reasonable explanation as to what may have led to Nicholas resigning. In addition, why was his resignation accepted with such seeming alacrity when prior offers of resignation by Nicholas had not been accepted? Publicly announced strategies of the then Nicholas led board of CAL had embraced the resumption of flights to Gatwick,the planned acquisition of two jets from LAN of Chile to be used on the route and the securing of turbo prop planes from ATR, seven of which are yet to arrive in Trinidad and Tobago (TT) due to a series of financial and logistical challenges.

We have decided reservations about the resuming of direct flights to London, a route with a history of low passenger volumes for CAL’s predecessor, BWIA International Airways Limited. This situation has been aggravated by the continuing international financial crisis which has seen even fewer passengers travelling out of and to London. A rationale for the planned restart has never been fully advanced. It would be of some help in getting the taxpayers of TT to appreciate the thinking behind the proposed starting again of flights to London should the board and management of CAL provide graphs showing both the anticipated passenger and cargo volumes. Additionally, CAL should make available for public consumption, graphs of passenger and cargo volumes from the time it succeeded BWIA, along with graphs for routes and flights operated.

In the meantime, the changing of the guard at CAL will have implications for the growth of the airline. Nicholas has had considerable experience in the world of business, generally, including in a private sector oil company. His broad experience, although not necessarily involving the airline industry prior to his earlier appointment as CAL Chairman, provided him with a helpful background for chairing CAL.

While Business Day is not being dismissive of his successor Rabindra Moonan’s ability to be chairman of CAL, nonetheless what were the principal qualities which made him the automatic choice of the People’s Partnership Government for the post? Already, Moonan would have begun to settle down as chairman and the country needs to know as early as possible how soon the new chairman would be producing a plan, either embracing features of the earlier thrust, or completely new, with emphasis on cost control, heightened productivity, fleet renewal, and expanded Caribbean routes and flights aimed at convincing Caricom Member States of the need to designate CAL the regional carrier.

Yet even as we state this, there is the feeling that the airline’s board of directors, generally speaking, may not have not demonstrated that it had the requisite skill needed to help CAL survive and indeed soar in the highly competitive, recession battered airline industry. Meanwhile, as we look at the above areas, we feel the need to inquire into CAL’s debt to the National Petroleum Company, along with the airline’s embarrassing inability to pay a promised donation of US$5million to the Children’s Life Fund.

This, we note for the record,clearly would have come, not out of income generated by the airline,but Government’s subsidy of CAL. Yet other issues arise, the principal of which is: What is the future of the CAL-Air Jamaica merger, which despite all the earlier projections has been a drain on CAL, or more to the point, the taxpayers of TT? Business Day hopes that the People’s Partnership Government has given and will continue to give careful thought to these issues as it is not clear skies for CAL.

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