Madera outlines strategy for Caribbean Airlines


Madera outlines strategy for Caribbean Airlines

Caribbean Airlines targets Kingston for regional hub

Business editor

Sunday, March 24, 2019

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Coming out of its first profitable year for some time, Caribbean Airlines (CAL) has big plans to develop Norman m anley International Airport (NMIA) into a regional hub for the Caribbean, according to its CEO Galvin Madera.

In an exclusive interview with the Jamaica Observer, Madera spoke on the strategic plan to expand the airline across the region and further afield.

“Jamaica is strategically the best place to start,” Madera said. “The regional hub in Kingston is coming”.

With Jamaica mainly receiving carriers from North America, “we think there is a gap” for Caribbean Airlines, he said.

Currently, Kingston is a hub for North America, with five of the airline's 12 jets based in Jamaica — but, unlike CAL's main hub of Port of Spain, it is not considered a hub for Caribbean destinations.

That will change, however, when CAL introduces a new fleet of turbo-prob aeroplanes, which will be “based in Jamaica as a regional hub”, Madera said in an exclusive interview with the Jamaica Observer on Friday.

That could happen as early as the third quarter, Madera said.

Port of Spain is currently Caribbean Airlines only Caribbean hub, but with the new plan Kingston could serve as the hub for Northern Caribbean destinations possibly including places like Cuba, Haiti, the Dominican Republic, the Cayman Islands and The Bahamas.

As a hub, Kingston would allow not just more destinations for Jamaican passengers, but would be the central point for people from these new destinations to connect to other CAL flights, to airports in North America or the Caribbean.

As a part of expansion plans for Jamaica, Madera said that the airline would soon be introducing two new Caribbean destinations, though he would not say where.

Havana, Cuba, is a likely destination; however, apart from its proximity, Caribbean Airlines recently opened that route to Port of Spain, and the route has been doing well.

The airline currently has a fleet of ATR 72-600s turbo-prop planes flying out of Trinidad, and will consider expanding that for the Jamaican hub, or possibly going for the Q-400s, which give a longer range, Madera said.

“That is our clear vision for the airline, where Jamaica is our first point of expansion in the Caribbean,” Madera said.

With the historic brands of both Air Jamaica and BWIA behind it, “we want to build a brand for the region — not a particular country,” Madera said.

The plan is a part of CAL's strategy to become a more Caribbeean airline. Maderra was in Jamaica on Friday, March 15 to participate in the Jamaican launch of its “Caribbean identity” marketing campaign.

The regional campaign, which aims to showcase Caribbean culture and arts and demonstrate the comonality between islands, was first launched in Trinidad before Carnival and then Guyana. From Jamaica, the campaign will go to Suriname at the end of this month, and then on to Barbados. Trinidadian soca star Machel Montano plays at each of the locations, including his song Flying High, a bit of a unity anthem which he also played at this year's carnival.

Through the campaign, the airline, closely associated with Trinidad, hopes to show that it is, infact, a Caribbean airline, representing the entire region. And not just the English and Spanish- speaking islands, but the French and Dutch territories as well, Madera said.

But with the airline in expansion mode, even further routes could start to open up. The airline has plans to aquire wide-body jets, which would allow it to fly the London route from both Kingston and Port of Spain. But it will also explore opening up new routes to South America and even Africa.

Madera said that 55 per cent of passengers on North American carriers out of Fort Lauderdale come from destinations further afield, meaning that Caribbean Airlines is competing for only 45 per cent of that market.

Meanwhile, the airline is taking a “wait-and-see” attitude over its decision to purchase 12 new Boeing 737 Max 8s starting later this year following two recent accidents with the aircraft, first in Indonesia and earlier this month in Ethiopia.

“With the recent crash we have to wait on the conclusion to decide what we do next,” Madera said.

The first plane was due to come in service in December, he said. “So we have six months to see how things go.” Originally all 12 were to be delivered by the end of 2021.

Caribbean Airline's strategic plan is currently with the Trinidad government for approval — the major shareholder in the island, with the Jamaican government a smaller partner.

The competitive market for the Caribbean is currently undergoing some change, with LIAT in some financial difficulty and Fly Jamaica being at least temporarily out of operation following a non-fatal accident with one of its aircraft in Guyana. But Caribbean Airlines remains focused on its own strategic plan of expansion without being too concerned about developments at other regional airlines.

The history of aviation in the Caribbean shows that “economies of scale bring benefits” ,he noted.

“For any airline to do well they need to have the lion's share of the Caribbean,” he said.

He noted that Caribbean Airlines already serves the Fly Jamaica routes, with the airline flying to New York and Toronto direct from Jamaica and Trinidad, and also providing through flights from Guyana via Port of Spain.

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