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CAL can crush any airline in the region
…With Trinidad Govt backing – says Fly Jamaica
Between 2013 and 2015 Trinidadian carrier, Caribbean Airlines (CAL) is expected to get $1.8 billion from its Government. However, with backing like that, some aviation players say that it is very difficult for other operators to keep up.
Fly Jamaica’s Captain Ronald Reece
CAL had for some time been receiving financial support from its Government thus, being able to stay in operation amidst severe losses. But with that amount of money ($1.8billion), Captain Ronald Reece says that “CAL can crush any airline operating in the region.”
Reece, who is a co-owner of the Jamaica-based airline, Fly Jamaica, was at the time responding to questions pertaining to possible increases in ticket prices given the situation similar to last year, when only one carrier was operating on the New York/Georgetown route. This saw passengers having to pay as much as US$1,600 to travel to North America because CAL was the only airline operating at that time.
However, this time around, Fly Jamaica is also in the market and is the only airline remaining on the New York leg with Caribbean Airline. Two others quit after operating for less than a year; with one spending less than three months on the scene.
“The Trinidadians have enough oil wealth to support their own national airline for the next hundred years or more,” Reece said.
He said that CAL has been able to keep prices low to drive away the competition. He said also, that when the competition moves on; the regional airline raises ticket prices to where it ought to be because operational cost is very high.
Reece added that the cost of aviation parts go up every year, so ticket prices will not remain static. This also changes when the competition is in a position to support lower ticket prices than the market can offer, he insinuated.
Reece posited that, “The traveling public does not understand what it cost to fly, but aviation costs for parts and airplanes go up 10 – 15 percent every year, so one can’t expect to pay US$500 to go to New York forever. That was a 1970’s price.”
Trinidadian carrier CAL
Fly Jamaica is however, seeking to have its second plane in the sky within a couple of months. Reece was unable to say if the plane should be in operation for the Christmas season; but he said that the airline is working with the Jamaica Civil Aviation Authority (JCAA) to add the B767-300ER to the company’s Air Operating Certificate. “This is to ensure that we can be reliable in our schedule and also offer charter flights,” he said.
Last September, the Trinidad media reported that the government is supporting CAL more than one billion dollars (TT). It was stated also, that CAL management had informed their government that the company expects to break-even in three years time, but funds will still have to be provided for another three years.
Several airlines and charter companies had entered Guyana’s market taking their chances particularly, on the lucrative GEO/NY route. With a firm grip on the local market, it has been the belief of many for some time, that CAL is a contributor to instability here.
It has been mentioned on several occasions that Trinidad has made it their duty to keep their national carrier alive at whatever cost, even if it means wiping out competition and then causing passengers to pay up after gaining the monopoly.
CAL’s fuel subsidy was also a topic of contention when Airlines for America (A4A) which bears concerns for American based airlines, expressed worry over CAL operating the Georgetown/New York route last year. They asked the US Department of Transportation (DOT) not to grant permission for CAL to operate directly out of Guyana.
LIAT’s Chairman Dr. Ralph Gonsalves, had also argued that CAL’s fuel subsidy was illegal and opined that the matter is going to be resolved only through arbitration and or the Caribbean Court of Justice.
Fly Jamaica has expressed continued support for the Guyana market. They also service the Jamaican market and Canada. The company is also expanding to a major South American market.
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