(Trinidad Express) – The decision to remove the fuel subsidy on Caribbean Airlines (CAL) was based on what was best for Trinidad and Tobago, not necessarily Caricom, Finance Minister Larry Howai has said.
“We run the airline based on what is best for Trinidad and Tobago. Of course we take into account all other Caribbean colleagues… I am not as concerned with what other people say as much as I’m concerned by a $700 million problem,” Howai told reporters. In May, the shareholder governments for CAL’s regional competitor LIAT argued that the State subsidy to the airline was a violation of the Revised Treaty of Chaguaramas.
CAL’s fuel subsidy last year was $300 million. “Yes there is criticism one gets but that will not be the basis on how we make a decision. The critical thing is that we do what is in the best interest of Trinidad and Tobago. In dealing with CAL the key issue for me is here is a company that would have lost $700 million last year, in addition to a fuel subsidy. The most important thing for me is to get to a point as fast as I can where I have no more outflows going to them. As long as I keep them tied to our purse strings there will be no incentive for them to do anything,” Howai said.
Howai said he has told the board he is prepared to initially inject capital into the company, once the company provides a viable restructuring plan that meets the approval of ministry technocrats.
“I understand it will not happen by magic overnight, or even in the first year and therefore we may have to give another capital injection because it may take two or three years to where we want to get them to… we had to send a strong signal that we are serious about the point as a first position we are removing the subsidy and putting the initial injection in and move forward to viability from there,” he said.