Caribbean Airlines appears to be flying into some strong headwinds as the airline warns of turbulence and proposes temporary salary reductions for all staff beginning next month to try and stay in the air.
Globally it has been a challenging period for airlines with many unable to survive the COVID-19 pandemic.
While Caribbean Airlines’ has also been forced to ground its operations because of border closures, it enjoyed the luxury of a government guarantee. Roughly US $65 million.
But that financial backing is expiring soon and the airline is now being forced to make decisions about its expenses. Guardian Media understands that CAL is looking at trimming salaries across its operations almost immediately.
According to minutes of a recently held meeting between the airline pilots association and Caribbean airlines, the government loan guarantee that it received in May expires at the end of September, especially as it relates to provisions for salary support.
The airline and the government are now working together on determining the next steps.
Among the proposals being presented by CAL to workers representatives is a salary reduction of between 5 and 20 percent for all operating staff for a six to eight month period. It is expected the cuts will take place effective next month.
The company is also looking to determine the minimum staffing requirement to perform essential operations.
Therefore, the remaining members of staff will be asked to take a leave of absence without pay for a period of roughly three months in the first instance.
A similar approach will be taken for pilots. Once the required number is determined, the remaining pilots will also be given a leave of absence without pay. It is expected that 146 pilots will be placed on no pay leave in October. Guardian Media has been told VSEP is not being considered.
Sources however tell Guardian Media there is a concern that the process to be adopted could see the airline’s most experienced pilots being sent home.
According to the Airlines Vice President of Human Resources, the aim is to save roughly one million US dollars a month.
Guardian Media understands that Caribbean Airlines met with the Finance Ministry this week but are awaiting feedback from the Minister of Finance.
While the Airline Pilots Association says it is open to some of the recommendations put forward, it says it is concerned that the airline advertised the position of an ATR pilot even as these proposals were being discussed.
Head of Corporate Communications at Caribbean Airlines Dionne Ligoure told Guardian Media the airline is in discussions with many stakeholders and is working on all options to safeguard the interest of the business. She said those discussions are ongoing.