CAL takes $ 103 million from Covid lashes | Local company
MAJORITY Caribbean Airlines (CAL) reported an after-tax loss of US $ 103 million in its fiscal year ended Dec.31, 2020, compared to a profit of US $ 6.7 million in 2019.
CAL’s management accounts for 2020 lay bare the damage the Covid-19 pandemic has caused to the airline, which halted international flights to and from Piarco International Airport in March 2020. Since then then T & T’s borders were closed to regular commercial passengers. but were opened to repatriation and cargo flights as the government struggled to contain the Covid-19 pandemic.
CAL’s total revenue in 2020 was US $ 137.3 million, down 69.7% from the US $ 453.7 million generated in 2019.
The airline’s total spending also fell 47.3%, falling to US $ 227.7 million in 2020 from US $ 432.3 million in 2019.
This left CAL with an operating loss of US $ 90.4 million in 2020, compared to an operating profit of US $ 21.4 million in 2019.
His last audited accounts, the Sunday Express was told, was from 2015.
The accounts show that CAL’s operating revenue fell from US $ 369,306,018 million in 2019 to a decline of US $ 87,873,456 million in 2020.
Its fuel costs fell from $ 85,356,403 million to $ 20,936,035 million.
Maintenance also decreased from US $ 52,795,375 million to US $ 31.48,146 million
Its personnel costs increased from US $ 77,439,366 million in 2019 to US $ 66,205,523 in 2020.
In September 2020, CAL announced that it would temporarily lay off nearly 600 employees at T&T and Jamaica for three months and that there would be pay cuts for eight months – from October 15, 2020 to June 15, 2021 – as the airline hoped to save. about $ 1.6 million per month.
CAL said it was implementing these “temporary measures to support her recovery during the Covid-19 pandemic.”
These measures, according to a statement from the airline, will involve sending some employees on unpaid leave, some pay cuts and some would be temporarily laid off.
The criteria were based on the principle of last in, first out âunless there are justifiable and reasonable operational considerations to do otherwiseâ.
Its marketing and CRS, which cost US $ 19,953,535 million in 2019 fell to US $ 4,815,931 million in 2020.
Commissions paid to travel agents increased from US $ 20,517,974 million in 2019 to US $ 4,640,465 million in 2020.
In February, the airline issued a press release on its accounts which stated that its unaudited financial results for the year ended December 2020, with the impact of the global pandemic, had resulted in an operating loss ( earnings before interest and taxes â EBIT) of TT $ 738 million ($ 109.2 million) on sales of TT $ 802 million ($ 118.6 million).
The company noted that this was “a stark comparison to 2019, which saw positive EBIT of TT $ 76 million (US $ 11.2 million) on revenue of $ 3 billion. TT dollars (440 million US dollars) for the period of 12 months. Operating expenses for 2020 were TT $ 1.54 billion ($ 228 million), down 47% from 2019 due to fewer thefts and tight cost controls â.
Commenting on the results, Garvin Medera, CEO of CAL, said: âThe first two months of 2020 continued our upward trajectory of the previous three years and the next phase of our strategic plan was off to a strong start. However, Covid-19 has taken a heavy toll on international travel and tourism over the past ten months and our financial results for last year fully reflect this new reality. “
Medera pointed out that CAL has provided support through repatriation flights to a number of Caribbean countries and has resumed operations in some destinations outside of Trinidad and Tobago where borders are open.
CAL noted that in 2020, passenger flights were 90% lower than the same period the year before due to the closure of international borders from March 2020.
“Passenger numbers for 2020 have significantly decreased by 71% to just 741,676 (of which 371,549 traveled on the domestic airlift between Trinidad and Tobago), compared to 2019 when the airline carried 2,595,526 people.” , the company said.
According to the Auditor General’s 2019 report, the Ministry of Finance is already granting a loan of US $ 75 million for CAL, contracted under the administration of the People’s Partnership, at First Citizens. This balance, according to the latest report, is $ 478,594,222.56 TT.
Cash flow crisis
Earlier this year, Finance Minister Colm Imbert said the government had subsidized the airline to the tune of more than $ 700 million in 2020.
At a press conference in February, Imbert said: âCovid-19 has also negatively affected the airline industry, requiring a government grant from Caribbean Airlines to the tune of $ 700 million over the past year. The Airport Authority is also in hemorrhage, because with the closure of the borders, it generates little or no revenue, while incurring significant operational costs. â
Last year, the government agreed to guarantee a loan of US $ 65 million ($ 442 million) to CAL.
At the time, Medera told company staff that if CAL was able to fund April salaries, it would need external funding for the months to come.
Imbert said that “Caribbean Airlines is not making any money at the moment, so the government has agreed to guarantee the loan.”
But Prime Minister Dr Keith Rowley has signaled his government’s intention to reopen the country’s borders as the country advances on its vaccination program.
To that end, CAL chose not to terminate its contract to take 12 Max-8 aircraft when the opportunity arose.
When the exit option was presented, the airline would not have incurred any penalty for exercising the option, but the besieged carrier chose to maintain it.
In December 2020, the Max-8 was cleared for flight after 20 months of grounding by the Federal Aviation Authority (FAA).
The aircraft is already in use in the United States and Canada.
As it stands, CAL plans to reduce its jet fleet from 12 to nine and has already returned two planes to backers and another will be returned shortly.
All leases for the nine existing planes have been extended for at least a year until the company can take delivery of the Max 8 plane, the Sunday Express said.
CAL’s current fleet includes 12 Boeing 737-800s.
In November 2018, CAL announced that it had leased 12 Boeing Max 8s to replace its old fleet and made a down payment of US $ 7 million for the new aircraft.
CAL was to take delivery of the first Boeing aircraft in December 2019.
But Boeing’s Max 8 plane has been grounded since the crash of two aircraft, the Lion Air Flight 610 in October 2018 in Indonesia and Ethiopian Airlines Flight 302 in March 2019 in Ethiopia, which left a total of 346 dead.
Imbert, as minister responsible for CAL, as well as Corporation Sole, at the post-Cabinet press conference in 2019, said he gave the state airline a directive to review the contract and “obtain international assistance from aviation experts”. in particular lawyers specializing in air law, to review the terms and conditions of the contract.
âOne of the obvious conditions must be that the airplane must be certified as fit for use. In the current situation, with the Federal Aviation Authority (US regulator) immobilizing the aircraft on the ground, it is clear that these aircraft would not be suitable for use today. We don’t know what it will look like in December, âhe said.
Since Covid-19 hit the Caribbean in March 2020, the airline’s flights have declined as borders have been closed to contain the spread of the coronavirus. T & T’s borders closed on March 23 and remained closed except for cargo flights and repatriation flights.
As T&T cannot be a hub, CAL has set up a temporary hub in Barbados to serve the Eastern Caribbean.
CAL’s fleet, which includes Boeing 737-800s and ATR72-600s, remained largely on the ground.