CAL ‘not strapped for cash’
Jaikaran dismisses report airline needs bailout
Caribbean Airlines is not cash-strapped, the airline’s vice-chairman, Mohan Jaikaran, said yesterday.
Jaikaran’s statement comes on the heels of a report in the weekend Mirror that the carrier was seeking an immediate $100 million injection from the Government to pay suppliers and employees.
“I do not know where anyone got that, but it is very sad that those are the reports coming out in the media,” Jaikaran said in a telephone interview yesterday.
Jaikaran said almost all global airlines were losing money but assured the public that CAL was “heading in the right direction”. He hinted that within a year, there may be a turnaround of the airline’s history of financial loss.
The national carrier is already heavily subsidised by the Government, but Jaikaran denied seeking another $100 million as the report suggested. The State carrier received a Government subvention of $527 million in the 2013 budget.
“To say that money is needed immediately? That is false; that is not the case,” he said.
Jaikaran said while the company “could use” $25 to $30 million, that money is not needed immediately.
“It may not be needed at all. We can obviously use money, but to say we need it or we’d be bankrupt in the morning is not true,” Jaikaran said.
Jaikaran called for more focus to be paid to the fact that in the past year, CAL brought over one million people into the country.
“That is added income to the local economy,” he said.
Transport Minister Chandresh Sharma also added his support to the local air carrier. In a telephone interview yesterday, Sharma said he was not overly concerned about CAL’s financial situation as almost all State-subsidised island carriers faced financial challenges.
“Especially with our oil and gas industry, almost all industries rely on the services of a dedicated airline. To the foreign investor, foreign employees, having our own airline is attractive,” Sharma said.
He said CAL was in the process of “bringing the best minds together” in order to turn around the company.
“It is a loss leader, but the Government subsidises other areas of transport that does not earn any income at all. The Government subsidises the water taxi, we subsidise the ferry between the islands and we subsidise the local carrier,” Sharma said.
He said any further cash subvention would have to go before Cabinet for approval.
“It would be premature to say how much and when, or if, that would happen, but I want to say that we are not going to lose CAL or see CAL fold,” he said.
In the past year, both regional and international industry affiliates have slammed the massive subsidy, saying it unfairly put CAL ahead of the competition. Recent critics included St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves and British Airways executives.
Meanwhile, News Americas of New York yesterday reported that Caribbean Airlines had been slapped with US$100,000 in fines by the US Department of Transportation (DOT).
DOT fined the airline for violating federal rules on August 15, 2012, by not providing passengers with an opportunity to leave a plane that was delayed on the tarmac at New York’s JFK Airport for more than four hours.