CAL made TT$339m loss contrary to profit declared by former chairman

(Trinidad Express) Caribbean Airlines Ltd (CAL) recorded a consolidated unaudited loss of US$52.8 million (TT$339.5 million) for 2011, while Air Jamaica recorded an unaudited loss of US$38.1 million (TT$ 245.2 million).

This is what Finance Minister Winston Dookeran told the House of Representatives yesterday. The Minister’s statement puts into serious question the claim of the airline’s profit made by former CAL chairman George Nicholas, who had stated last November that CAL raked in a TT$200 million profit for 2011 and that Air Jamaica, after the merger, had also made its first ever consecutive profit in its 50-year history.

As he welcomed the first of nine new aircraft, Nicholas had painted a rosy picture of the State enterprise, boasting that CAL was able to “put millions into the treasury” and that “CAL was a profitable organisation”.

He had said: “We are doing things differently… It has been a very tough year, but Caribbean Airlines is flying routes to make money.”

Dookeran’s revelations yesterday, however, portrayed a totally different picture of CAL as a loss-making enterprise, facing mounting debt. The Minister stated that the debts of Caribbean Airlines Ltd as at March 15, 2012, were over US$40 million (TT$256 million).

The Minister said CAL’s individual debts, which were greater than TT$2 million as at March 15, 2012, were as follows:

• Airports Authority of Trinidad and Tobago — US$8,120,807;

• US taxes payable to the Internal Revenue Service — US$6,129,621;

• National Petroleum (fuel), Norman Manley International Airport — US$3,850,000;

• International Air Transport Association (IATA) — US$3,500,000;

• Automated Clearing House/Custom and Excise Passenger Taxes — US$3,152,832;

• Strategic Air Services (cargo handling) — US$2,104,581;

• Boeing (maintenance) — US$2,058,288;

• Avions de Transport Regional (ATR) — US$1,892,000;

• Value Added Tax (BIR) — US$1,734,375

• AON Insurance (passenger and aircraft) — US$1,283,980;

• Synergy Aviation (aircraft parts) — US$933,250;

• Ross Advertising — US$544,829.

Dookeran also stated that while the board of directors of CAL approved US$5 million, which was pledged to the Children’s Life Fund—as at March 15, 2012, only US$200,000 had been remitted to the Fund. CAL had presented a large replica cheque for US$5 million to Prime Minister Kamla Persad-Bissessar at the official launch of the fund in November. The Prime Minister had explained then that CAL had raised the money by donating US$5 on every passenger ticket.

Dookeran also stated that the total subsidy for the fuel provided to CAL as at March 15, 2012, was TT$141,222,702. He said TT$40,553,313 of this $141 million was outstanding.

On the issue of Air Jamaica, the Minister said Cabinet had agreed to the extension of the fuel hedge mechanism for CAL to cover the period January 1, 2012, to December 31, 2012, at the benchmark fuel price of US$1.50 per gallon for Caribbean Airlines and US$2.34 per gallon for Air Jamaica operations.

He said to date, CAL had submitted claims for the Air Jamaica operations in the amount of US $3,189,061 for the period January to March 31, 2012, of which payment can only be made after the claims are audited by the Central Audit Committee of the Ministry of Finance. He added that the claims for the Air Jamaica operations for 2012 were currently being audited.

The Minister was responding to questions filed by Opposition Leader Dr Keith Rowley, who asked Dookeran whether he was aware the CAL board had declared to the country that it made a profit and a percentage of this was given to the Children’s Life Fund. Dookeran said he was not so aware. Rowley said he was “shocked” by what he was hearing from Dookeran.

Nicholas had an eventful tenure, having clashed with the first Transport Minister, Jack Warner. He survived a call by the board, the Transport Minister and Finance Minister to demit office. But it was not until last month (April 4) that his colourful stint ended after the Minister gave him (along with other State enterprise chairmen) a five out of ten rating for his performance as chairman.

 

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