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  • Ramesh Lutchmedial | Caribbean Airlines Expands Fleet, Antigua Protests Intra-Regional Moves

Ramesh Lutchmedial | Caribbean Airlines Expands Fleet, Antigua Protests Intra-Regional Moves

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(Trinidad Newsday) — In delivering TT’s 2023/2024 national budget, Finance Minister Colm Imbert announced that the Caribbean region has been exhibiting strong air transport demand.

According to Imbert, to meet this growing demand, Caribbean Airlines Ltd (CAL) intends to expand its fleet through the lease of additional ATR-72, B 737- MAX 8 and Embraer E-175 regional jets to service the intra-regional demand and establish bases and hubs across the region to promote efficiency and cost-reducing measures.

The first major reaction to CAL’s proposed expansion came last Friday from Lionel Hurst, chief of staff in the Antigua and Barbuda office of the Prime Minister.

After the weekly Cabinet meeting, Hurst – speaking at a news conference – said the Government had taken note of the scaling-up of CAL, including the purchase of several ATR aircraft with the expectation of placing them on routes serviced by LIAT 1974 Ltd.

Hurst said while plans are for LIAT 2020 to become fully operational by Christmas this year, St John is not going to lie down and allow the expansion of CAL in the region.

Hurst added that his Government intends to fight plans by CAL to expand its operations into the Eastern Caribbean.

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Antigua and Barbuda will certainly lose any fight with CAL, which is exercising its rights under the revised Caricom Multilateral Air Services Agreement (MASA) to exploit marketing opportunities in the Caricom region.

CAL’s proposed expansion does not in any way violate Article 18: Pricing, and Article 19: Fair Competition, of the MASA.

Any attempts by Antigua and Barbuda to restrict CAL’s operations into its territory will be a violation of the MASA, with legal consequences.

The provision of efficient regional air transport within the Caricom region has been thwarted by insularity and geopolitics.

In June 2020, Antigua and Barbuda Prime Minister Gaston Browne, during an interview on Antigua’s Observer Radio, said he rejected any idea of CAL’s replacing LIAT and would soon start a scaled-down LIAT, on its own, rather than give CAL a monopoly.

Antigua and Barbuda Prime Minister Gaston Browne. Photo – Angelo Marcelle

Browne added, “In terms of those who are suggesting…giving CAL a monopoly on the provision of air services within Caricom, I am totally opposed to that, one million per cent opposed to that.”

As suggested by this column on numerous occasions, one way to solve the regional air transportation problems is for Antigua and Barbuda to embrace CAL and promote functional co-operation between CAL and any future reincarnation of LIAT.

On the other hand, Imbert briefly described CAL’s expansion plans in his 2024 budget statement under the heading Tourism and Cultural Industries, perhaps hinting at possible budgetary implications.

The Embraer E-175 aircraft, with a range of 2,200 nautical miles and dual-class seating of 76 seats, is suitable for operating a non-stop service between Port of Spain and Kingston.

Additionally, the Embraer E-175 can be used for services between Port of Spain and destinations in Florida such as Miami and Fort Lauderdale during off-peak periods when the passenger load factors are well below break-even for a Boeing 737 Max aircraft.

However, the operation of the Embraer E-175 as a new aircraft type will incur significant startup costs owing to the training of flight crews, maintenance personnel and ground operations staff.

Adequate spares and specialised tooling will have to be procured to meet the regulatory requirements for adding it to CAL’s Air Operating Certificate (AOC).

The AOC process is likely to last approximately six months, based on the ICAO five-phase certification process.

 

CAL’s proposed expansion was more than likely based on a feasibility study by its analytics group that identified the demand for additional airlift capacity and considered the most suitable aircraft based on operating economics.

Of major concern to stakeholders, particularly the TT taxpayers, is the sustainability of the market demand to justify the fleet expansion that is intended to promote efficiency and cost-reducing measures.

There must be optimum fleet utilisation, as aircraft on the ground do not earn revenue and monthly lease charges must be paid.

Therefore, the Investments Division of the Finance Ministry should do a very comprehensive and rigorous due diligence on CAL’s proposed fleet expansion programme and attest to its viability.

A major function of the Investments Division is appraising and evaluating investment plans of state enterprises to ensure the profitability of investment projects.

At a virtual news conference in 2021, Imbert said the Government could not bail out CAL to the tune of $700 million unless the airline gets itself ready and made itself as efficient as possible for the resumption of flights.

Imbert added that whatever system was put in place to allow the post-covid19 resumption of flights, CAL would be required to make a presentation to the wider public and let everybody know what the restructured airline would look like.

Taking a cue from this June 2021 edict, TT taxpayers have every right to know the extent to which CAL has achieved the objectives of its post-pandemic recovery plan and the answers to questions about CAL’s financial performance.

Are operating revenues equal to or exceeding operating expenses? Is there an operating surplus to fund CAL’s fleet expansion program?

These questions are relevant because a fleet expansion requires considerable funding to meet the cost of aircraft-lease security deposits and other associated expenses. Imbert must categorically state whether TT taxpayers are going to fund the initial cost of CAL’s fleet expansion.

Finally, as a true act of patriotism, it is strongly recommended that Imbert, as corporation sole, ensures all additional aircraft to be leased by CAL have a suitably designed steelpan logo, instead of a bird that very closely resembles the national bird of Jamaica.

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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]