The pressure that the pandemic continues to exert on international travel as a result of the changing restrictions on the movement of people established by governments forces many airlines in the region to further adjust their operations to survive since they do not count in most of the cases with some kind of financial aid.
It is in this context that Caribbean Airlines, the state company of Trinidad and Tobago (with a minority stake of 16% by Jamaica), announced today that during the first quarter of 2021 it recorded losses of 172.7 million Trinidadian dollars (USD 25.7 million), even after having made progress in the last year in structural changes to reduce costs by 52%. Among this reductions were the eight-month salary reduction for personnel with salaries above TTD 7,500 per month, with proportionally higher percentages in those with higher salaries; the temporary suspension of about a third of its 1,700 employees for three months (then extended until April 2021); and the elimination of suppliers and temporary workers, as well as other irrelevant expenses.
Likewise, as other airlines, they drew on cargo and charter operations as a source of fresh funds that were added, in the case of Caribbean Airlines, to a loan guaranteed by the government of Trinidad and Tobago and cash contributions that totaled USD 100 million.
That is why, through a statement, the CEO of Caribbean Airlines, Garvin Medera, said that “the situation requires further progress in measures that make Caribbean Airlines have a sustainable model for 2021 and beyond”, announcing one “strategic restructuring that will focus on significant cost reduction in all areas of our operation, specifically our people, our fleet and other assets, and our network.”
On the measures, it was only reported that about 25% of the company’s workforce, about 450 employees, “exceed their current needs” so it will “embark on consultation with employees and other interested parties, regarding to deal with this surplus labor situation”. The remaining details will be known in the coming weeks.
“Caribbean Airlines remains committed to connecting the people of the region and despite the challenges we face, our teams are dedicated to our vision of being the airline of choice to serve the Caribbean,” concluded Medera.
The pandemic found Caribbean Airlines just as it was coming off a two-year streak of profits (for USD 4 million and USD 11 million in 2018 and 2019 respectively), the first since its launch in 2006. In 2020 operating losses climbed to 738 million Trinidadian dollars (USD 190 million) after having transported only 741,676 passengers, of which 371 thousand did so on the domestic airlift between Trinidad and Tobago, the least profitable segment for the company. The previous year they had transported 2,595,526 passengers.
The Caribbean Airlines fleet is made up of 6 ATR 72-600s and 10 Boeing 737-800s, and its network reaches 18 destinations in South America, the Caribbean, the United States and Canada.
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