Caribbean Airlines (BW, Port of Spain) will receive a total of TTD1.8billion (USD283million) in government funding over the period 2013 to 2015 Trinidadian Minister of Finance, Larry Howai, has said amid concerns the airline may not turn a profit even after 2017.
Responding to questions in the country's parliament last week, Howai said that while the introduction of a restructuring plan last year would lead to a gradual reduction in government-backed subsidies over the next three years, there are no guarantees that the airline will be sustainable by then given its route obligations and rising competition.
“For a number of years, Caribbean Airlines has operated with the financial support of the Government by way of two subsidies; a fuel subsidy and a per-passenger air bridge subsidy," he was quoted by the Trinidad Express. “Recently mandated to become viable without the TTD250million fuel subsidy, CAL has been engaged in streamlining its operations in order to do so. The sizeable adjustment is of necessity, taking some time, and the Government continues to provide some assistance during this period of adjustment for the airline.”
In addition, the Venezuelan foreign currency crisis also impacted the carrier's bottom line.
The minister also bemoaned the entry of foreign carriers such as Copa Airlines (CM, Panamá City Tocumen International), Air Canada rouge (RV, Toronto Pearson), JetBlue Airways (B6, New York JFK), and WestJet (WS, Calgary) for having increased available seat capacity by over 23% in markets where Caribbean Airlines was previously the dominant operator.
In 2014, the Government injected just over TTD1.1billion into the loss-making carrier with TTD400million going towards the carrier's restructuring and TTD719million going towards debt servicing. Howai attributed some of the funds allocated the airline as going towards regional fuel subsidies and the Trinidad - Tobago air bridge.
