Recent news about developments at Caribbean Airlines (CAL) considered still, in fact if not in legal terms, as an airline of and for the Caricom area, must be disturbing to Caribbean citizens beyond Trinidad and Tobago. For reports in the Trinidad Express on the airline’s business operations, carried in our columns on Monday, must reinforce feelings among many that since the transformation of BWIA into CAL, there has not been much improvement in its management, where management includes the company’s executives as well as government itself.
These reports must be a particular concern to hotel owners in Jamaica, and to the government authorities there who, taking their courage in their hands in the middle of 2010, had agreed to the absorption of their iconic Air Jamaica, whose existence had been, to Jamaicans, almost a symbol of their country’s sovereignty. The CAL-Air Jamaica deal, initiated by Prime Ministers Manning and Bruce Golding, and finally consolidated a year later in May 2011 in an agreement signed by the two countries’ Finance Ministers representing the post-Manning and post-Golding regimes, will surely have been seen by other Caricom governments as an important regional initiative, strengthening their devotion to local and regional ownership of institutions and economic instruments crucial to the region’s economic survival. And in Jamaica itself, there must have been some sentiment too, that if the last private owners of the airline, led by Mr Butch Stewart of the Sandals Group, were unable to make a success of it, it had to be sold, given also the IMF insistence that the government could not any longer simultaneously carry it, among other state-owned entities, and implement a successful financial recovery of Jamaica.
Recent bickering between the airline’s management and the government, leading to the recent resignation of CAL’s Chairman George Nicholas following strong criticism of his period of management, was not encouraging. As we have reported, almost simultaneously Transport Minister Devant Maharaj announced, like a schoolmaster, that he would give Nicholas only 5 out of 10 marks for his Board’s conduct of the airline’s operations so far; and Minister of Finance Winston Dookeran expressed his concern about a long list of outstanding financial obligations held by the company. This latter move was perceived as designed by management as a deliberate initiative to embarrass them. And to add oil to the fire, and as if in support of the public annoyance of the Ministers of Finance and Transport, the first Chairman of the company, appointed under Manning’s regime, and himself a Trinidad businessman of substantial repute, Arthur Lok Jack, subsequently issued a statement detailing, to the obvious detriment of the present airline administration, the relatively positive state of the company’s finances, when he and his Board resigned in June 2010 following the general elections.
These ructions since the appointment of a new governance system after Prime Minister Kamla Persad-Bissessar‘s assumption of office must, however, have been somewhat surprising to the Trinidadian population who will have been aware of a longtime close relationship between the Chairman and senior persons in the new government. But they will have had a hint of impending disorder when ministerial responsibility for the airline was, some months ago, removed from Mr Jack Warner, Minister of Transport and Chairman of the United National Congress (the biggest part of the People’s Partnership coalition), after his expressions of concern that he was being paid scant regard by the airline’s Chairman.
But observers should not have been entirely surprised by current events, since the airline’s top executive management has also been subject to some amount of instability. For following CAL’s commencement of operations in January 2007, its first CEO resigned in July 2009 under obvious pressure, and another was summarily dismissed in November 2010. This trend hardly indicated a situation likely to give confidence, either at home or abroad that things were going well. In addition the public deprecatory remarks of the new line Minister must have given the impression that he wished to force the Chairperson into resignation, rather than seeking his Cabinet’s support for a considered decision about the latter’s lack of capacity for the task at hand, and his removal.
This kind of perception must surely raise the question of the extent to which the Trinidad Cabinet has really been functioning on a unified basis in this instance. It is passing strange that Finance Minister Dookeran should have had to resort to a public elaboration of the state of finances of CAL, outlining, at least for Trinidad & Tobago, a trail of relatively minuscule debts (quite a few below US$5M). From what is said to have transpired, the largest of the debts is one of US$40M owed to the French company ATR, relating to a decision not only on the purchase, but on the financial arrangements for purchase, of new aircraft which should clearly have been approved by the Trinidad Cabinet. And surely, the revelation that the unaudited loss for the Air Jamaica operations of nearly US$53M, should have induced an extensive discussion between government and management long before it reach that figure, and the consequent disclosure of it.
Would outside observers be wrong to contemplate that not only bad blood, at various times, between the Ministry of Finance and the company’s authorities, but between them and the then, and subsequent, Ministers of Transport, was the result of difficulties that the ministers themselves may have had in having these matters dealt with in the country’s Cabinet? Does this not raise the additional question of the very governance arrangements of the country?
These questions must give concern to regional governments and citizens who would have hoped that what was in effect the merger of CAL and Air Jamaica, could have been the first positive, or at least promising, step to the rationalization of regional airline arrangements that, in turn, could subsequently have allowed the ever-struggling LIAT some basis for wider regional sustainability. Instead they have the potential for raising scepticism about possibilities for the future.
At the beginning of 2010, two regional personalities interested in this issue, Professor Norman Girvan and former BWIA executive and consultant Ian Bertrand, did engage in a discussion (at the UWI St Augustine, Sir Arthur Lewis Institute, on the implications of a merger, or at least an arrangement between CAL and Air Jamaica. In this, Girvan saw the opening of a CAL-Air Jamaica merger as “ideally…a stepping stone to the establishment of a truly Caribbean airline or a Caribbean Airlines Group” with LIAT and Bahamas Air as potential partners. A somewhat more sceptical Bertrand suggested he was more wary about Air Jamaica’s debt, and Trinidad accepting what he referred to as “any tourism obligation to Air Jamaica, a perennial demand of the Jamaican government.” Those hurdles had apparently been overcome in negotiation. But today, the revival of debt, how it came about and whether the TT government should accept responsibility for plans by the company management to incur it, seem to be alive and well again.
We can only hope that the various parts of the governance and management arrangements in Trinidad & Tobago for this still new company, will be able to have a cohesive, and non-tempestuous parlay towards an effective decision on what is really required and what can be done, before the increasingly sceptical minds in the Caribbean Community definitively add regional air transportation to their list.
Can we ask the Trinidad Government to please settle, rather than unsettle, things?
