Who to blame for Caribbean Airlines losses?

THE EDITOR, Madam:

Trinidad’s Guardian Express recently carried an investigative report suggesting that accumulated losses from former Air Jamaica routes, taken over by Caribbean Airlines (CAL) in 2011, were a major contributor to CAL’s current financial problems. The report spread widely online and was picked up by other Caribbean newspapers. However, it was misleading and incomplete.

Why were consistently unprofitable routes, including those from Jamaica, allowed to continue for over a decade without meaningful action or a change in strategy? While it is not unusual for state-owned airlines to incur losses – often viewed as an investment in economic development and tourism – CAL’s problems clearly go beyond route performance. Serious management failures went unchecked for years. It is astonishing that the airline’s financial statements were not audited for a decade. Several senior executives have resigned or been terminated amid questions about governance, while operational costs – particularly administrative and staffing expenses – have continued to rise, alongside fuel costs.

Although CAL initially retained the Jamaican brand following the Air Jamaica acquisition, it was eventually merged. While brand mergers can offer benefits, this one failed to resonate with Jamaican passengers, who increasingly chose other carriers, particularly low-cost airlines. CAL made little effort to strengthen its brand appeal in Jamaica or connect meaningfully with the country’s tourism market. Staffing routes with mostly Jamaican employees was not enough to attract Jamaican travellers.

The Guardian reports that losses on Jamaican routes accounted for US$255 million since 2011 and notes that Jamaica, as a minority shareholder, did not inject additional capital, even during the pandemic. However, it is unreasonable to place blame on the minority shareholder when leadership responsibility rests primarily with the majority owner.

CAL was incorporated in 2006, yet its most recent audit –covering the 2016 fiscal year – was completed nearly ten years late, revealing accumulated losses exceeding TT$2 billion. Ultimately, responsibility and accountability lie with the Trinidad-based leadership, the Board of Directors, and the majority shareholder.

P. CHIN

chin_p@yahoo.com