Af­ter COVID-19 re­sult­ed in a near-death ex­pe­ri­ence in 2020, ma­jor­i­ty state-owned Caribbean Air­lines Ltd (CAL) is now seek­ing to trans­form its for­tunes with am­bi­tious plans for new routes, new air­craft along with the hir­ing of ad­di­tion­al staff.

In a sig­nal of the air­line’s new thrust, CAL’s Amer­i­can law firm, Con­don & Forsyth LLP, filed an ap­pli­ca­tion with the US De­part­ment of Trans­porta­tion “to op­er­ate to the full ex­tent au­tho­rised by the Air Trans­port Agree­ment be­tween the Gov­ern­ment of the Unit­ed States of Amer­i­ca and the Gov­ern­ment of the Re­pub­lic of T&T.”

In an op­er­a­tional fore­cast an­nex to 58-page doc­u­ment, CAL makes spe­cif­ic ref­er­ence to Puer­to Ri­co and St Thomas in the US Vir­gin Is­lands as new the routes.

The air­line projects rapid growth for these new US des­ti­na­tions. An op­er­a­tional fore­cast in the ap­pli­ca­tion projects CAL trans­port­ing 5,339 pas­sen­gers to and from Puer­to Ri­co and earn­ing US$694,228 in rev­enue in 2023. But the air­line ex­pects the Puer­to Ri­co route to quadru­ple in 2024 with 21,356 pas­sen­gers and rev­enues of US$2,776,280.

CAL’s pre­de­ces­sor com­pa­ny, BWIA, ser­viced Puer­to Ri­co as part of a route that start­ed in Mi­a­mi, flew to Grand Cay­man and Mon­tego Bay with con­tin­u­ing no-change-of-plane ser­vice to Kingston, San Juan, Puer­to Ri­co, An­tigua, St Lu­cia, Bar­ba­dos and Port of Spain, ac­cord­ing to in­for­ma­tion on Wikipedia.

St Thomas would be a new des­ti­na­tion for the na­tion­al air­line of T&T and it al­so fore­cast rapid growth in the US Vir­gin Is­lands. CAL projects that in 2023, it would trans­port 2,613 pas­sen­gers to St Thomas, earn­ing US$418,785. It ex­pects that des­ti­na­tion to in­crease by six times in 2024, with 15,678 pas­sen­gers and US$2,508,480 in rev­enue.

The air­line al­ready flies to four oth­er US des­ti­na­tions, com­pris­ing New York, Mi­a­mi, Or­lan­do and Fort Laud­erdale.

Ac­cord­ing to the fil­ing with the De­part­ment of Trans­porta­tion, CAL ex­pects to fly 328,601 pas­sen­gers on the New York route in 2023, gen­er­at­ing US$88,077,728. The New York route is fore­cast to ex­pand by 10 per cent in 2024 with 361,461 pas­sen­gers gen­er­at­ing US$96,885,501. New York is CAL’s largest and most lu­cra­tive des­ti­na­tion.

Com­pared to New York, CAL fore­casts that it will fly some 95,702 pas­sen­gers on the Mi­a­mi route, gen­er­at­ing US$20,588,414 in rev­enue in 2023. The air­line ex­pects Mi­a­mi to in­crease to 105,273 pas­sen­gers gen­er­at­ing US$22,647,255 in 2024.

The air­line fore­casts that it will gen­er­ate rev­enue of about US$127 mil­lion ($863 mil­lion) from the six US des­ti­na­tions in 2023. It ex­pects rev­enue from the US to rise to US$143.71 mil­lion ($977.16 mil­lion) in 2024, an in­crease of 13 per cent.

CAL’s ap­pli­ca­tion to the US De­part­ment of Trans­porta­tion re­quests au­thor­i­ty to en­able the air­line to en­gage in:

* Sched­uled for­eign and char­ter air trans­porta­tion of per­sons, prop­er­ty and mail from points be­hind Trinidad and To­ba­go via Trinidad and To­ba­go and in­ter­me­di­ate points to any point or point in the Unit­ed States and be­yond;

* All-car­go ser­vice from and be­tween the same points; and

* Any oth­er au­thor­i­ty per­mit­ted un­der Part 212 of the De­part­ment of Trans­porta­tion’s rules.

The ap­pli­ca­tion for the for­eign air car­ri­er per­mit is dat­ed April 17 and was made by the New York City of­fice of CAL’s US law firm.

A no­tice in the ap­pli­ca­tion states: “Any per­son may sup­port or op­pose this ap­pli­ca­tion by fil­ing an an­swer with the De­part­ment of Trans­porta­tion and serv­ing a copy of the an­swer on the ap­pli­cant and all per­sons served with this ap­pli­ca­tion on or be­fore May 8, 2023.”

The ap­pli­ca­tion to the US De­part­ment of Trans­porta­tion states: “De­spite the un­prece­dent­ed im­pact of the COVID-19 pan­dem­ic on the world, and on the avi­a­tion in­dus­try in par­tic­u­lar, CAL re­ceived ex­emp­tion au­thor­i­ty for the fol­low­ing routes:

(1) Be­tween Port-of-Spain via the in­ter­me­di­ate points of British Vir­gin Is­lands, Do­mini­ca, and Tor­to­la, to San Juan;

(2) From Port-of-Spain via the in­ter­me­di­ate point of George­town, Guyana, to Hous­ton;

(3) Be­tween Port-of-Spain and Hous­ton, with a point be­yond to George­town; (4) and

4) Be­tween Port-of-Spain via An­tigua, Bar­ba­dos, Grena­da, St Lu­cia and St Maarten to San Juan and be­yond to Ja­maica.

CAL re­sponds

Apart from Puer­to Ri­co and St Thomas, Sun­day Busi­ness sources said CAL is con­sid­er­ing re­sum­ing flights to Cara­cas, the cap­i­tal of Venezuela, as well as adding new des­ti­na­tions in Mar­tinique, Guade­loupe and St Kitts.

Asked to com­ment on the air­line’s route ex­pan­sion plans, its spokesper­son, Dionne Ligoure said: “CAL cur­rent­ly has the most ex­ten­sive route net­work in the re­gion, which we in­tend to grow.

“At the ap­pro­pri­ate time, the specifics of our growth plan will be shared with the me­dia and the gen­er­al pub­lic.

“Our plan to ex­pand the air­line’s route net­work is part of a strate­gic plan that has been thor­ough­ly re­viewed based on avail­able da­ta, trends and analy­sis.”

Ligoure said CAL’s ex­pan­sion plans are be­ing fund­ed from its op­er­at­ing prof­its.

She al­so said there is huge de­mand for air trans­port in the re­gion, com­ing out of the COVID-19 clo­sures and the ex­pan­sion of tourism in the re­gion.

New air­craft

In last week’s fil­ing with the US De­part­ment of Trans­po­ra­tion, CAL al­so dis­closed it is cur­rent­ly ac­quir­ing ad­di­tion­al air­craft, “specif­i­cal­ly four ATR-72-600 air­frames, ex­pect­ed to be de­liv­ered in April and May, 2023.”

In Feb­ru­ary, a com­pa­ny called Nordic Avi­a­tion Cap­i­tal con­firmed that it had ex­e­cut­ed a lease agree­ment with CAL to lease the air­line three ATR-600s.

An­nex 6 of the doc­u­ment filed with the US De­part­ment of Trans­porta­tion in­di­cates that CAL cur­rent­ly has sev­en ATR-72-600s, nine Boe­ing 737-8 Max air­craft and two 737-800s.

Near death

In April 2020, CAL CEO Garvin Med­era is­sued a memo to the com­pa­ny’s em­ploy­ees stat­ing that the air­line would be able to fund April’s salaries, but it would need ex­ter­nal fund­ing to con­tin­ue fly­ing.

In May 2020, the Min­is­ter of Fi­nance, Colm Im­bert, an­nounced that the Gov­ern­ment had agreed to guar­an­tee a US$65 mil­lion ($442 mil­lion) bond that was is­sued to keep the air­line in the air. The bond, which ma­tures in 2025, pays an in­ter­est rate of 7.307 per cent per an­num. That means CAL must ser­vice the in­ter­est on the bond to the tune of US$4.74 mil­lion a year.

The CAL bailout fol­lowed the Gov­ern­ment’s an­nounce­ment that it was clos­ing the coun­try’s in­ter­na­tion­al bor­ders, in­clud­ing its two in­ter­na­tion­al air­ports, to all trav­el­ers from March 22, 2020. That pol­i­cy de­ci­sion of the Gov­ern­ment, which was meant to mit­i­gate the spread of COVID-19 with­in T&T, meant that CAL earned vir­tu­al­ly no rev­enue for months af­ter, apart from repa­tri­a­tion flights.

As a re­sult of the pre­cip­i­tous de­cline in its rev­enue, the com­pa­ny suf­fered an op­er­at­ing loss of US$109.2 mil­lion in 2020, com­pared to small op­er­at­ing prof­its for 2018 and 2019.

CAL’s op­er­at­ing loss­es con­tin­ued in­to 2021, re­sult­ing in the an­nounce­ment in June of that year that it was em­bark­ing on a re­struc­tur­ing ex­er­cise, aimed at re­trench­ing 450 em­ploy­ees–about one-quar­ter of its staff–as part of an at­tempt to re­duce ex­pen­di­ture.

The com­pa­ny al­so an­nounced in June 2021 that it was look­ing at ways to re­duce its air­craft fleet and scale back its route net­work.

In June 2020, the An­tigua prime min­is­ter Gas­ton Browne an­nounced that LI­AT would be liq­ui­dat­ed fol­low­ing in­creased debt and the eco­nom­ic im­pact of the COVID-19 pan­dem­ic.

The ma­jor share­hold­ers, gov­ern­ments of LI­AT–Bar­ba­dos, An­tigua & Bar­bu­da and St Vin­cent and Do­mini­ca were un­able to agree on a for­mu­la that would re­sult in the air­line be­ing able to sur­vive.

CAL is owned 88.1 per cent by the Gov­ern­ment of T&T and 11.9 per cent by the Gov­ern­ment of Ja­maica. The air­line is chaired by busi­ness­man Shameer Ron­nie Mo­hammed, and in­cludes at­tor­ney Michael Quam­i­na, lec­tur­er Chris Ma­haraj, pub­lic ser­vant Enid Zephyrine and the rep­re­sen­ta­tive of the Gov­ern­ment of Ja­maica, Zachary Hard­ing.