Thursday, November 23, 2017

CAL proposes extra charges


State-owned carrier Caribbean Airlines (CAL) has recommended to the Government that additional charges be implemented on the Tobago airbridge.

If Government agrees, customers could see themselves being charged for excess baggage, flight date changes or even no-shows.

Newly appointed CAL chairman Shameer Mohammed noted yesterday that the Tobago route remains an unprofitable one for the airline.

He said, though, that CAL is “committed to providing the support and the mandate that we have been charged with in providing that service”.

He noted the airline has been exploring measures that would increase its revenue without interfering with the $300 fare to the sister isle.

He said recommendations for ancillary charges have been sent to the Ministry of Finance and CAL is now awaiting a response.

Mohammed's comments came as CAL's management team appeared yesterday before the Joint Select Committee (JSC) of Parliament, in Port of Spain and was in response to questions by committee chairman David Small on whether a fare increase was CAL's only option for profitability.

Small said: “Are there no other strategies available to an airline but to seek add-on charges? I think it is incumbent on the airline to really look and say could we propose something that does not necessarily burden the State any further, and if it is not palatable politically that's a whole different issue. But at least someone in the airline could say listen let's introduce a baggage charge…”

Flat fare remains

 

Mohammed explained that CAL could not simply increase its fares or charges without Government approval.

“I want to say to members that at the airline level we are confined in terms of what approvals can be given to us, including something as basic as a date-change. Mind you we also have, in terms of the service we're referring to, over 25 per cent of our passengers are no-shows with no consequences of charges passed on,” he said.

“Additional bag charges… we have looked at a series of initiatives that we believe can be passed on as a direct cost to customers without interfering with that flat fare that we operate in. But again that is left to the authorities who govern those charges,” Mohammed added.

Acting permanent secretary in the Ministry of Finance Lisa Phillips confirmed that in October last year the ministry received the recommendations from CAL for the introduction of ancillary charges.

“We are requiring additional information from CAL in order to come up with our position on the matter. By next month the ministry should decide on the matter,” she stated.

Mohammed noted that between January and November 2016, the airline operated 14,000 flights with 868,000 passengers.

He said the domestic airbridge accounts for 52 per cent of CAL's flights.

CAL turnaround by 2018

 

Meanwhile, Mohammed assured that by next year CAL expects to reach a point of profitability.

“We do believe in 2018 we should be able to break even. Our numbers indicate that 2016 was better than 2015. Our members suggest that 2017 would be better than 2016 and therefore we remain hopeful that by 2018 CAL perhaps would no longer be a burden on the taxpayers,” he said.

He said he preferred not to detail CAL's financial performance for 2016 as the airline's accounts for the period have not been audited.