| BlueSkyLife |
30th Mar 2013 10:09 |
How do they intend to hire or even hire and not fire?
Over $500 million losses, despite subsidy
IT’S official! Caribbean Airlines (CAL) is bankrupt! Word reaching TnT Mirror is that the Board has gone cap-inhand to borrow money from the Government to the tune of over $100 million. The money will allow the penniless airline to pay its staff’ and suppliers.
Mirror learnt that CAL, which is chaired by CEPEP contractor Rabindra Moonan, is over $500 million in the red and the situation could be worse were it not for the massive annual fuel subsidy from the Government.This subsidy is said to amount to just under $300 million and is a bone of contention with St. Vincent Prime Minister Ralph Gonsalves who feels it gives the national airline unfair advantage over LIAT which is owned by several Caribbean governments.
The airline has not released its annual accounts for a number of years and in the past couple of years gobbled up a billion dollars left by the previous board.An industry source told Mirror: “The airline’s role in making possible intra-Caribbean travel for social and business purposes is critical and its absence would reduce the population of several small states to being virtual prisoners on their islands.
“However, the misdirection and mismanagement at CAL cannot go on. The Board and management have to be held accountable.Something needs to be done to put a competent and effective Board and management team in place to strategically manage the airline.”
Mirror was also asked to investigate claims that Board members were in the process of negotiating the purchase of an old aircraft from China. It is alleged that the deal has been placed on hold as questions were raised about the links between the China based company and certain high-ranking CAL officials.CAL staff are now on high alert as there is talk of a major restructuring.
Just last week, 15 flight attendant’s contracts at the Jamaica operation were not renewed. Clive Forbes, general manager of Caribbean Airlines in Jamaica, told Jamaica-based RJR News that the expiration of the contracts coincided with cost cutting measures at the airline.Mirror was told that the recently- appointed Chief Financial Officer Shiva Ramnarine has been looking carefully at the airline’s operations and how they could be streamlined to save money. It is alleged that CAL is also looking closely at the Jamaica operations which is said to be bleeding the company’s scarce resources.
Mirror understands that CAL is considering closing a call centre in Jamaica, which employs around 90 people, as calls can be easily rerouted and handled in Trinidad. It is alleged that other aspects of the Jamaica operations are being reviewed to determine what can be shut down or downsized. The Jamaica Government, which has its own issues, is not likely to take kindly to this move.Concerned employees who contacted the Mirror lamented: “How has the airline reached to this state? Now we are hearing about restructuring. It is unfair because many of us work very hard to keep this airline flying. The persons responsible for having us in this predicament are never the ones who are sent home when there is restructuring.”
The employees continued: “Look at CAL’s track record. In just six years there have been several incidents, including the Guyana crash. Pilots with low flying hours are being hired and promoted. These things never happened in BWIA, which is why BWIA’s safety record remained intact to the end.”Since the unceremonious dismissal of Ian Brunton as Chief Executive Officer of CAL in November 2010, the airline has been led by an acting CEO.
Many argue that the absence of a strategic leader coupled with a questionable Board of Directors has accelerated the demise of the airline. When the PP first came into power, CAL’s line ministry was shifted from the Ministry of Finance to the Ministry of Transport.After several public clashes between the then Minister Jack Warner and the Board, the airline was “returned” to the Ministry of Finance with the Minister of Finance as corporation sole.
Mirror is once again calling on Finance Minister Larry Howai to explain to the taxpayers of Trinidad and Tobago the exact state of affairs at CAL. As the ones funding the bailout, taxpayers have a right to know.
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