Caribbean Airlines must handle competition — Warner

By Julien Neaves

Friday, May 13, 2011

IF State-owned carrier Caribbean Airlines (CAL) cannot face competition from new low-fare airline REDjet then it will be "wiped out", Works and Transport Minister Jack Warner said earlier this week.

"CAL may have to move. And CAL therefore has to be able to reinvent itself and face the competition. There's no other way," he said.

After some problems with procuring its commercial license to operate, REDjet has said it will launch its first Trinidad service around May 15.

Warner, speaking with the Trinidadian media last week following a meeting with Carenage residents at the Carenage Community Centre, said that the ongoing problems with the CAL board of directors have been affecting the airline, notably its image and credibility.

He said the CAL board was not functioning, down to four people and sometimes three "which was not the best situation".

He said he could only wait until Cabinet moves and then he could act.

At last week's Cabinet meeting Warner said they were "stretched for time" and the issue of the future of the CAL board was not raised.

Prime Minister Kamla Persad-Bissessar has said the George Nicholas-chaired CAL board will continue in the interim.

Nicholas and fellow directors are said to be at odds with regard to the operations of the airline.

Warner expressed hope that the issue will be raised at the next Cabinet meeting, saying that the situation "cannot go as it has been going".

On the reasons for the ongoing problems with the board, Warner directed questions to Persad-Bissessar, adding that the reports provided by him and the corporate secretary "all say the same thing".

Responding to the possibility of privatising CAL, he said there had been no discussion but when he believed it was "critical", he would ask.

On the CAL/Air Jamaica merger Warner said he had been advised that an extension on the signing of the deal had been given until June 10.

He said that he was also aware that Air Jamaica had fulfilled all the requirements.

"And therefore Jamaica is not at fault in any way," he said.

Commenting on media reports of a lack of communication between him and CAL chairman George Nicholas on the extension of the deal, Jack admitted there was none.

"I am patience personified. I have not seen anything. We don't speak about those things," he said.

He pointed out that when he called Nicholas for information he received it, and he had been informed that the routes the airline was operating were profitable.

Warner said he was told by Nicholas that CAL's profits for this year would be "mind-boggling" and Warner said he therefore had no cause for worry.

REDjet has met with one road block after another in commencing its operations in both Jamaica and Trinidad. In fact it was due to start flights from Jamaica earlier this week but has been prevented from doing so.

Some insiders believe that this may be due to the fact that CAL has yet to sign off on the Air Jamaica deal and may not want another regional carrier providing competition on what is considered a lucrative route. So what is going on?

Speaking with Caribbean Business Report earlier this week, REDjet's Business Development Manager Robbie Burns said: " I can confirm that CAL have objected to REDjet flying to Trinidad and Jamaica as they are claiming that as a designated airline of Barbados that Barbados cannot designate another airline. This was confirmed by a senior member of the Trinidad negotiating team. I cannot confirm that CAL have placed the condition on REDjet not being allowed to fly into Jamaica as a requirement to complete the Air Jamaica acquisition. However we have it from a Ministry official in Jamaica and would trust its credibility."

Burns went on to confirm that REDjet has applied for an application in accordance with the requirements of Jamaica and has completed an audit by the Jamaica Civil Aviation Authority (JCAA) of which it met all of the conditions to operate in Jamaica.

"REDjet has been told that despite our application to fly to Jamaica from the 11th of May, the Air Transport Licensing Authority have made it clear that it will now not make a decision on REDjet until the 26th of May. It is fair to say to say that what CAL is looking to do is take over is not Air Jamaica but rather exclusive access and control of Jamaican skies and air services. This means that CAL is effectively securing a monopoly to the detriment of the economy and consumer," said Burns.

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Caribbean Airlines must handle competition — Warner