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  • Caribbean Airlines announces US$25 million loss; more job cuts

Caribbean Airlines announces US$25 million loss; more job cuts

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Caribbean Airlines today announced its unaudited financial results for the first quarter of 2021, recording a loss of TT$172.7m (US$25.7m) and a 75% decline in revenue, compared to the same period in 2020.

The losses follow a similar downturn in 2020, which saw an operating loss of TT$738m (US$109.2m) compared to operating profits for 2018 and 2019. Since the beginning of the COVID-19 pandemic and the suspension of operations at its base in Trinidad and Tobago, the airline has seen passenger numbers plummet, and flight numbers reduced to less than 10% of normal operations.

Despite this, the airline continued to offer services on many of its routes and provided invaluable repatriation flights for Caribbean citizens. Given the financial impact of the pandemic, Caribbean Airlines proactively reduced costs, and Q1 2021 expenses are down 52% compared to the same period in 2020. Further, the airline was kept afloat through a government guaranteed loan and a cash injection by the Government of Trinidad and Tobago totalling US$100 million.

The announcement that the borders of Trinidad and Tobago may soon reopen is welcome news, but all forecasts suggest that the recommencement of travel will not be in the same volumes as they were pre-COVID. Therefore, until air travel regains its pre-COVID momentum the airline will need to adjust its operations to cater for a reduced scale of demand after the opening of the borders. Put simply, passenger demand in the short to medium term is not going to recover sufficiently to support the existing company structure after the reopening of the borders.

As a consequence, Caribbean Airlines is required to take further steps to ensure it has a sustainable business model for 2021 and beyond. These steps include major cost reductions in all areas of the airline’s operations, specifically its human resource complement, its fleet and other assets, and its route network.

As part of the streamlining strategy, the number of jets in the fleet will be reduced, for the time being, over the course of 2021. Its route network will also be adjusted to reflect the changing market.

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In terms of employees, the airline has determined that 25% of its workforce or about 450 positions throughout its network is surplus to its current needs. The Company will embark on consultation with the employees and other stakeholders, with respect to treating with this surplus labour situation.

Caribbean Airlines passenger and cargo services continue to operate, with all the latest flight details available on www.caribbean-airlines.com. The airline thanks its valued customers for their continued support.

BACKGROUND:

Globally, COVID-19 has been an unprecedented shock to air travel. Over the last year, Caribbean Airlines has felt first-hand the impact of the pandemic. After implementing several short term measures to stabilize the airline, regrettably, the Company is now left with no choice but to undertake further solutions based on its existing needs.

Even with the pending re-opening of the borders of Trinidad and Tobago, travel demand is not expected to be the same as pre-COVID and current passenger demand is not going to recover sufficiently to support the existing company structure.

1. Why is there a need for retrenchment?

ANSWER: In order to survive in the short to medium term, the company has to decrease the aircraft fleet to match reduced passenger demand among other initiatives. The decrease in the aircraft fleet will result in surplus labour. Surplus labour is the reason for the proposed retrenchment exercise.

2. How is retrenchment different from temporary lay-off?

ANSWER: A retrenchment is a termination of employment for reason of redundancy (i.e., surplus labour). A temporary lay-off is a temporary suspension of the employment contract, but without termination of employment.

3. How many employees will be affected and in what areas?

ANSWER:  Potentially, approximately 25% or 450 positions across the entire Caribbean Airlines network.

4. Will these measures impact the airline’s current flights and cargo operations?

ANSWER: No. These measures will not affect flights, cargo operations or the quality of service, safety and customer care that customers expect.

5. Will there be Employee Assistance (EAP) available for employees?

ANSWER: Yes. The Company takes its duty of care seriously and has ensured that support is in place for persons needing assistance.

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REQUEST FOR EXPRESSIONS OF INTEREST

(CONSULTING SERVICES – INDIVIDUAL SELECTION)

 

OECS MSME Guarantee Facility Project

Loan No.: IDA-62670, IDA-62660, IDA-62640, IBRD-88830, IDA-62650

Assignment Title: Senior Operating Officer (SOO)

Reference No. KN-ECPCGC-207852-CS-INDV

 

The Governments of Antigua and Barbuda, Commonwealth of Dominica, Grenada, St. Lucia and St. Vincent and the Grenadines have received financing in the amount of US$10 million equivalent from the World Bank towards the cost of establishing a partial credit guarantee scheme, and they intend to apply part of the proceeds to payments for goods, and consulting services to be procured under this project. 

The consultant will serve as the “Senior Operating Officer (SOO)” for the ECPCGC and should possess extensive knowledge of MSME lending with some direct experience lending to Micro, small and medium-sized businesses, knowledge of the internal control processes necessary for a lending operation and the ability to design and implement risk mitigation procedures. The ideal candidate should possess an Undergraduate Degree from a reputable college or university, preferably in Business, Accounting, Banking or related field, with a minimum of 5 years’ experience in lending, inclusive of MSME lending. The initial employment period will be for two years on a contractual basis. Renewal of the contract will be subject to a performance evaluation at the end of the contractual period. The assignment is expected to begin on September 30th, 2021.  The consultant will report directly to the Chief Executive Officer of the ECPCGC.

The detailed Terms of Reference (TOR) for the assignment can be viewed by following the attached link below. 

 

https://bit.ly/3iVannm

 

The Eastern Caribbean Partial Credit Guarantee Corporation (ECPCGC) now invites eligible “Consultants” to indicate their interest in providing the Services. Interested Consultants should provide information demonstrating that they have:

  • An Undergraduate Degree from a reputable college or university, preferably in Business, Finance, Banking or related field; and
  • Minimum of 5 years’ experience in MSME lending. Applicants should also have:
  • The ability to design and implement risk management procedures 
  • Extensive knowledge of MSME lending with some direct experience lending to small and medium-sized businesses
  • Extensive knowledge of MSME banking operations
  • Knowledge of the internal controls necessary for a lending operation and the ability to design and implement risk management procedures
  • Experience developing and presenting information in public, including responding to questions in real-time
  • Experience lending to MSMEs located in the ECCU
  • Knowledge of marketing and communicating with the MSME sector
  • Ability to draft procedures to be used in a lending operation
  • Familiarity with the mechanics of a loan guarantee program
  • Exceptional written, oral, interpersonal, and presentation skills, and
  • Proficiency in the use of Microsoft Office suite.

The attention of interested Individual Consultants is drawn to Section III, Paragraphs 3.14, 3.16, and 3.17 of the World Bank’s Procurement Regulations for IPF Borrowers July 2016, [revised November 2017] (“Procurement Regulations”), setting forth the World Bank’s policy on conflict of interest. A Consultant will be selected in accordance with the Approved Selection Method for Individual Consultants set out in the clause 7.34 of the World Bank Procurement Regulations for IPF Borrowers. 

 

Further information can be obtained at the address below during office hours 0800 to 1700 hours:

Eastern Caribbean Partial Credit Guarantee Corporation

Brid Rock, Basseterre,

St. Kitts.

Expressions of interest must be delivered in a written form by e-mail by August 11th, 2021, to [email protected]

 

For further information, please contact:

Carmen Gomez-Trigg                                                            Bernard Thomas

Chief Executive Officer                                                          Chief Financial Officer

Tel: 868-620-8144                                                                  Tel: 869-765-2385

Email: [email protected]                                          [email protected]