Caribbean Airlines Limited (CAL) continues to experience financial turbulence, as the Trinidad and Tobago (T&T) regional carrier is being outweighed by debt it has incurred of more than TT$1 billion, based on a report by T&T Guardian.

CAL’s profitability has been as cyclical as the aviation business, posting some profits on paper over the years 2009 and 2019 but those figures were outweighed the TT$1 billion debt. CAL, which began operations in January 1, 2007 debt free but made several bad investments over the years, which cost the airline more than TT$1 billion in losses.

The airline was capitalised with US$100 million (TT$677 million)—a clean balance sheet, a leaner flight schedule, subsidised fuel and a smaller staff. However, it later accumulated losses of US$454,550,903 million (TT$3 billion), according to its 2020 management accounts.

CAL was birthed based on a plan by its former chief executive, Englishman Peter Davies, came after T&T Government had already invested US$250 million (TT$1,692,500) in an attempt to keep its successor British West Indies Airways (BWIA) alive.

Early turbulence experienced

The turbulence started in 2010 with the departure of the then CEO Philip Saunders, who was replaced by airline pilot, Captain Ian Brunton. A new board was put in place years later under the chairmanship of George Nicholas III, businessman Mohan Jaikaran and Allan Clovis.

This Nicholas-chaired board was controversial often engaging in frequent spats with then Works and Transport Minister Jack Warner, the firing of the company’s chief executive, Brunton, over differences with the purchase of nine ATR aircraft, the decision to lease aircraft to return to Gatwick; the latter decision alone cost the company about TT$500 million.

The TT Guardian reports that It was CAL’s decision to purchase the ATR aircraft with its available cash, US$200 million (TT$1,354,000), something the company never financially recovered from, even though it was not necessary at the time. Under the Rabindra Moonan chaired-board, the airline was hit with a ticket upgrade scandal, which did not financially benefit the company.

Another new board appointed

Former Finance Minister Larry Howai subsequently fired the board amid mounting losses and installed Philip Marshall as chairman and then permanent secretary, Vishnu Dhanpaul as deputy chairman. The climb back to profitability was cut short by COVID-19 and the airline went cap in hand to the Government for a US$65 million Government-guaranteed loan to pay salaries.

CAL owes over a billion in liabilities, according to its 2020 management accounts dated December 2020. Accounts for 2020 revealed that CAL’s total liabilities are US$250,374,991 million—current liabilities amount to $190,386,965 million, while non-current liabilities amount to US$262,389,483 million.

Of that sum, TT$203,701,104 is in long-term financing. The accounts revealed that CAL’s total liabilities are US$250,374,991 million—current liabilities amount to TT$190,386,965 million, while non-current liabilities amount to US$262,389,483 million.

Of that sum, TT$203,701,104 is in long-term financing.