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| CAL chairman Rabindra Moonan: "there is basically one way to turn your fortune around and that is to increase revenue and cut costs." |
Caribbean Airlines plans to drop unprofitable routes currently operated by the airline and its subsidiary, Air Jamaica.
The statement was made Wednesday by CAL's new chairman, Rabindra Moonan, who attended his first board meeting. He said this is one of the steps that CAL will take to reduce the losses the airline has incurred.
Transport Minister Devant Maharaj officially introduced Moonan to the other members of the CAL board and asked then to to start cutting CAL's costs and address the concerns of losses, "which includes to my mind addressing the routes that are not profitable and that are not fiscally beneficial to Trinidad and Tobago/Air Jamaica operations."
Maharaj told reporters he asked Air Jamaica's representative on the board, Dennis Lalor, to look at ways to reduce expenditure with respect to Air Jamaica's operational costs.
Maharaj also said he has requested a detailed breakdown of the debts of both airlines.
Moonan told the Express newspaper his first meeting went "very well", adding that he asked for reports and proposals with an aim to decrease CAL's expenditure.
"We are looking and we have asked the management to give us proposals, there is basically one way to turn your fortune around and that is to increase revenue and cut costs," Moonan told the paper.
He said his short-term action plan will include the reduction of overheads, including operational costs in Jamaica.
Moonan is also considering dropping all unprofitable routes. However he stated that the direct service to London, to be introduced next month, will stay.
When the Manning government took over Air Jamaica it insisted that it would not inherit any of the airline's debt and also that it would not operate any route that was not profitable.
The previous government invested over $300 million in the Air Jamaica takeover and the CAL chairman at the time, Arthur Lok Jack, was confident that he would see growth and performance once the merger deal was completed.
The statement was made Wednesday by CAL's new chairman, Rabindra Moonan, who attended his first board meeting. He said this is one of the steps that CAL will take to reduce the losses the airline has incurred.
Transport Minister Devant Maharaj officially introduced Moonan to the other members of the CAL board and asked then to to start cutting CAL's costs and address the concerns of losses, "which includes to my mind addressing the routes that are not profitable and that are not fiscally beneficial to Trinidad and Tobago/Air Jamaica operations."
Maharaj told reporters he asked Air Jamaica's representative on the board, Dennis Lalor, to look at ways to reduce expenditure with respect to Air Jamaica's operational costs.
Maharaj also said he has requested a detailed breakdown of the debts of both airlines.
Moonan told the Express newspaper his first meeting went "very well", adding that he asked for reports and proposals with an aim to decrease CAL's expenditure.
"We are looking and we have asked the management to give us proposals, there is basically one way to turn your fortune around and that is to increase revenue and cut costs," Moonan told the paper.
He said his short-term action plan will include the reduction of overheads, including operational costs in Jamaica.
Moonan is also considering dropping all unprofitable routes. However he stated that the direct service to London, to be introduced next month, will stay.
When the Manning government took over Air Jamaica it insisted that it would not inherit any of the airline's debt and also that it would not operate any route that was not profitable.
The previous government invested over $300 million in the Air Jamaica takeover and the CAL chairman at the time, Arthur Lok Jack, was confident that he would see growth and performance once the merger deal was completed.
Lok Jack said in April 2010 that by taking over Air Jamaica CAL was getting an opportunity to increase revenue by almost two-thirds overnight with a fully developed business.
Lok Jack added, "So we are not taking on any costs at all and what we have happening here is that we are getting a clean operation with routes that we want, not routes that we don’t want...
“We found them (routes) to be very good routes with good load factors, they were developed routes with a number of people flying and the revenue at hand was quite substantial for those routes".
He said there are "no skeletons in the closets" and as a result CAL will now move from owning nine aircraft to approximately 15.
Air Jamaica was in serious debt at the time of the sale to CAL was being negotiated and the in February 2010 the Bruce Golding government was trying to sell two of its planes to pay a debt of about US$40 to the U.S. Internal Revenue Service (IRS) to avoid the seizure of aircraft to pay debt.
Golding made the revelation in the House of Representatives when he updated legislators about the pending sale of Air Jamaica to CAL. “We owe a lot of money.
We've had to use diplomatic channels to avoid our planes being seized for none payment of fees that are owed to the American government, the IRS in particular. It has been proposed to dispose of those state aircraft in order to discharge that obligation," he said.
Lok Jack added, "So we are not taking on any costs at all and what we have happening here is that we are getting a clean operation with routes that we want, not routes that we don’t want...
“We found them (routes) to be very good routes with good load factors, they were developed routes with a number of people flying and the revenue at hand was quite substantial for those routes".
He said there are "no skeletons in the closets" and as a result CAL will now move from owning nine aircraft to approximately 15.
Air Jamaica was in serious debt at the time of the sale to CAL was being negotiated and the in February 2010 the Bruce Golding government was trying to sell two of its planes to pay a debt of about US$40 to the U.S. Internal Revenue Service (IRS) to avoid the seizure of aircraft to pay debt.
Golding made the revelation in the House of Representatives when he updated legislators about the pending sale of Air Jamaica to CAL. “We owe a lot of money.
We've had to use diplomatic channels to avoid our planes being seized for none payment of fees that are owed to the American government, the IRS in particular. It has been proposed to dispose of those state aircraft in order to discharge that obligation," he said.
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