Caribbean Airlines to cut staff by 450 after $172 million loss

Caribbean Airlines

State-owned Caribbean Airlines (CAL) has said its restructuring plans include sending home 450 workers, representing 25 per cent of the airline’s staff, after taking a major hit due to the economic fallout from the COVID-19 pandemic.

In a news release, the airline announced its unaudited financial results from the first quarter of 2021 showed the company had lost $172.7 million with a 75 per cent decline in revenue, as compared to the first quarter of 2020.

CAL said this loss follows an operating loss of $738 million in 2020 as the airline has been operating at less than ten per cent of its normal flight schedule.

With T&T’s borders closed since March 2020, in September 2020 the airline announced it would try to stem its losses by implementing salary cuts and sending some of its staff on no-pay leave.

This resulted in a first-quarter reduction in costs of 52 per cent as compared to the same period in 2020.

“Further, the airline was kept afloat through a government-guaranteed loan and a cash injection by the Government of Trinidad and Tobago totalling US$100 million,” the release stated.

And although Prime Minister Dr Keith Rowley has announced the country’s borders will be reopened by mid-July, CAL said forecasters have predicted travel will not be in the same volume as they were pre-pandemic.

“Therefore, until air travel regains its pre-COVID momentum the airline will need to adjust its operations to cater for a reduced scale of demand after the opening of the borders. Put simply, passenger demand in the short to medium term is not going to recover sufficiently to support the existing company structure after the reopening of the borders.”

“These steps include major cost reductions in all areas of the airline’s operations, specifically its human resource complement, its fleet and other assets, and its route network. As part of the streamlining strategy, the number of jets in the fleet will be reduced, for the time being, over the course of 2021. Its route network will also be adjusted to reflect the changing market.”

The company said the 450 positions have now been deemed surplus.