CAL seeks new Govt bailout

Asha Javeed

Con­sul­tant Ed­i­tor - In­ves­ti­ga­tions

Caribbean Air­lines (CAL) is seek­ing a fi­nan­cial bailout from the Gov­ern­ment to counter the ris­ing cost of fu­el as a re­sult of the US/Is­rael war against Iran and its im­pact on the car­ri­er’s op­er­a­tional costs.

Guardian Me­dia un­der­stands the CAL board put for­ward sev­er­al op­tions to the Min­istry of Fi­nance dur­ing a meet­ing two weeks ago to cush­ion the air­line- the in­tro­duc­tion of a fu­el sur­charge on tick­ets, the re­moval of the sub­sidy on the air­bridge, an in­crease in the over­all cost of tick­ets and a fur­ther slash­ing of low­er rev­enue routes.

How­ev­er, CAL is al­so seek­ing fur­ther fi­nan­cial sup­port from the State, which sources say could come in the form of a bil­lion-dol­lar debt write-off.

And ac­cord­ing to the 2026 bud­get doc­u­ment, De­tails of Es­ti­mates of Re­cur­rent Ex­pen­di­ture, dat­ed March 25, 2026, the Gov­ern­ment has al­lo­cat­ed $626.84 mil­lion for the prin­ci­pal re­pay­ment on the CAL’s lo­cal loans. That sum is triple the re­vised al­lo­ca­tion for prin­ci­pal re­pay­ment of $200.8 mil­lion in fis­cal 2025.

As a last re­sort, with­out any sup­port, there is the pos­si­bil­i­ty of shut­ting down the air­line.

Guardian Me­dia un­der­stands there is a di­vi­sion of opin­ion on the board about the air­line’s vi­a­bil­i­ty. While CAL’s chair, Rey­na Kow­lessar, is push­ing to get fur­ther State sup­port to re­align the air­line’s busi­ness mod­el, at least two di­rec­tors be­lieve it should ei­ther be shut down or sold.

Across the world, air­lines are grap­pling with high­er fu­el costs, with sev­er­al air­lines al­ready in­tro­duc­ing fu­el sur­charges, rais­ing fares and ra­tio­nal­is­ing routes. The fu­el sur­charge, Guardian Me­dia un­der­stands, would fol­low sev­er­al in­ter­na­tion­al air­lines such as British Air­ways, Air France-KLM, Emi­rates, Sin­ga­pore Air­lines and Qatar Air­ways that al­ready have one in place.

CAL is a bil­lion-dol­lar for­eign ex­change-earn­ing com­pa­ny with ten­ta­cles through­out the re­gion and North Amer­i­ca. How­ev­er, it has been ham­strung by its debt and lack of fi­nan­cial au­dits. The air­line has not pub­lished fi­nan­cial au­dits for the last eight years, in breach of its statu­to­ry oblig­a­tions, which af­fects its abil­i­ty to raise mon­ey with­out State sup­port.

Over the years, the com­pa­ny has pub­lished man­age­ment state­ments which give an in­di­ca­tion as to its per­for­mance, but the statu­to­ry breach is on ac­tu­al au­dit­ed state­ments. De­spite this, Fi­nance Min­is­ter Dav­en­dranath Tan­coo said his pre­de­ces­sor had “re­peat­ed­ly ap­proved fi­nanc­ing for CAL in 2017, 2018, 2019, and as re­cent­ly as March 2025 to cov­er op­er­a­tional pres­sures,” ig­nor­ing the lack of trans­paren­cy.

Dur­ing his bud­get con­tri­bu­tion last year, Tan­coo ac­cused the for­mer ad­min­is­tra­tion of pre­sid­ing over “crim­i­nal neg­li­gence” at the air­line af­ter he re­vealed that CAL spent more than $60 mil­lion on au­dits with in­ter­na­tion­al firms EY and Price­Wa­ter­house­C­oop­ers (PwC), yet failed to sub­mit a sin­gle au­dit­ed fi­nan­cial state­ment for over nine years.

The gov­ern­ment has act­ed as guar­an­tor of four loans for CAL: a US$75 mil­lion loan ($504,455,772.11) from First Cit­i­zens, a US$55 mil­lion loan from First Cit­i­zens, a $436 mil­lion loan from Ansa Mer­chant Bank and a $443 mil­lion loan from Ansa Mer­chant Bank.

Guardian Me­dia un­der­stands that these loans have been re­peat­ed­ly re­fi­nanced over the years.

Last year, Min­is­ter of Trans­port and Civ­il Avi­a­tion Eli Za­k­our took is­sue with the Air­ports Au­thor­i­ty of T&T (AATT) writ­ing off a $205 mil­lion debt owed by CAL as the state en­ti­ty was strug­gling to meet its own ex­pens­es.

As part of re-eval­u­at­ing its busi­ness mod­el, last month CAL com­mis­sioned PWC- at a cost of $268,000 - to do a val­u­a­tion of its couri­er ser­vice, Jet­Pak. Last week, CAL’s gen­er­al man­ag­er of car­go and new busi­ness, Mark­lan Mose­ly, re­signed.

Mose­ly’s res­ig­na­tion takes the num­ber of ex­ec­u­tive man­agers leav­ing the com­pa­ny to eight in the last eight months. For­mer cor­po­rate com­mu­ni­ca­tions ex­ec­u­tive man­ag­er Dionne Ligoure was the first to leave in Au­gust 2025. She was fol­lowed by chief ex­ec­u­tive Garvin Med­era, who re­signed in Oc­to­ber 2025. In a mat­ter of weeks, Chief Fi­nan­cial Of­fi­cer Varuna Kuars­ingh, Chief Com­mer­cial Of­fi­cer Mar­tin Ae­ber­li, Cor­po­rate Sec­re­tary Nali­ni Lal­la and Gen­er­al Man­ag­er Pro­cure­ment Ar­lene Hunt fol­lowed suit. Last month, Chief In­for­ma­tion Of­fi­cer Je­re­my Mo­hammed al­so re­signed.

Not on­ly did the ex­it of eight se­nior of­fi­cers from the air­line re­move a lay­er of man­age­ment, but al­so a lay­er of in­sti­tu­tion­al knowl­edge from the or­gan­i­sa­tion.

Last Au­gust, Prime Min­is­ter Kam­la Per­sad-Bisses­sar said that CAL did not op­er­ate a sin­gle prof­itable route and had warned the air­line’s man­age­ment that they had two years to fix the com­pa­ny’s fi­nances or face dis­missal.

“I am giv­ing the man­age­ment of Caribbean Air­lines two years, max. They have to sort out the mess, oth­er­wise, every­one there will be look­ing for a new job…. Your fu­ture is in your hands,” she had said at a Mon­day night fo­rum meet­ing.

“No longer will we ac­cept tax­es paid by or­di­nary cit­i­zens, paid by teach­ers, paid by po­lice­men, small en­ter­pris­es … to up­keep CAL,” the Prime Min­is­ter fur­ther warned as she ac­cused man­age­ment of re­ceiv­ing “large salaries for ... fail­ing in their jobs.”

In­formed sources told Guardian Me­dia that a fu­el sur­charge is al­most an in­evitable pos­si­bil­i­ty for the air­line.

While the air­line has strug­gled through fi­nan­cial tur­bu­lence sev­er­al times, es­pe­cial­ly dur­ing the COVID years, CAL’s most press­ing cost now is its ris­ing fu­el bill, caus­ing it to spend more op­er­a­tional­ly than it is earn­ing at this point.

Though high­er en­er­gy prices, as a re­sult of the Unit­ed States and Is­rael’s war with Iran, may au­gur well for the coun­try’s cof­fers, the knock-on ef­fect for CAL is that it’s cost­ing more for avi­a­tion fu­el, which it pur­chas­es at mar­ket rates from dif­fer­ent ports of the var­i­ous routes it ser­vices.

In ad­di­tion to avi­a­tion fu­el, CAL’s op­er­a­tional ex­pens­es in­clude em­ploy­ee costs, lease of air­craft, main­te­nance, pas­sen­ger ex­pens­es, mar­ket­ing and com­mis­sions.

When CAL was es­tab­lished in 2007, apart from hav­ing a clean bal­ance sheet, it had ben­e­fit­ed from a gov­ern­ment-sup­port­ed US$50 a bar­rel fu­el hedge to sta­bilise costs against volatile oil prices. It was re­moved in 2013 af­ter cost­ing the State $300 mil­lion.

With no buffer in place, CAL has no op­tion but to im­ple­ment the charge on cus­tomers.

For fis­cal 2026, CAL has been al­lo­cat­ed $70 mil­lion from the Min­istry of Fi­nance, ac­cord­ing to the bud­get doc­u­ments.

That sum is the sub­sidy paid to CAL to ser­vice the air­bridge be­tween Trinidad and To­ba­go.

In 2025, CAL re­ceived the same amount of $70 mil­lion, in 2024, CAL re­ceived $73 mil­lion, in 2023, the sub­sidy was $85.6 mil­lion, while in 2022 it was $95 mil­lion.

The re­duced an­nu­al al­lo­ca­tion by the State was a re­sult of in­creas­ing the cost of tick­ets on the air­bridge in Jan­u­ary 2023.

The two-way fare, which was $300, was in­creased by $100 to $400.

“Rev­enues from in­ter­na­tion­al trav­el are used to sub­sidise the in­ter-is­land air bridge. Ad­di­tion­al­ly, the rise in glob­al en­er­gy com­mod­i­ty prices has re­sult­ed in high­er op­er­a­tional costs for both the in­ter-is­land air­bridge and seabridge. In this re­gard and con­sis­tent with our over­all pol­i­cy of shar­ing the bur­den of the cost of trans­port, I pro­pose to in­crease the cost of in­ter-is­land air trav­el for all tick­ets by $50.00,” then fi­nance min­is­ter Colm Im­bert had said at the time.

“The es­ti­mat­ed in­crease in an­nu­al rev­enue to Caribbean Air­lines for the op­er­a­tion of the air­bridge will be $50 mil­lion, which, with this in­creased price, will still re­quire sub­si­dies of the air­bridge of over $50 mil­lion per year,” Im­bert added.

In Au­gust 2022, CAL is­sued a re­lease which stat­ed that its do­mes­tic op­er­a­tion was char­ac­terised by con­sis­tent loss­es (US$9.6 mil­lion as at June 2022) and oth­er crit­i­cal vari­ables, such as sub­sidised flights, high op­er­at­ing costs and low prices, which do not re­flect ac­tu­al mar­ket val­ue and one-way peak de­mand pe­ri­ods out­side of the Ju­ly-Au­gust school hol­i­day pe­ri­od.

The air­line said as at June 2022, its to­tal op­er­a­tional costs for the air­bridge stood at US$18.7 mil­lion, while the cost per flight hour was US$17,306.

It not­ed that the high costs were dri­ven by the fre­quen­cy of flights and the short dis­tance (52 miles), lead­ing to an un­de­sir­able low block hour util­i­sa­tion of air­craft, crews and main­te­nance costs.

“Nonethe­less, the do­mes­tic sched­ule (in­clu­sive of peak trav­el pe­ri­ods) con­sid­ers the es­sen­tial na­ture of the ser­vice, events and ac­tiv­i­ties in To­ba­go, the to­tal num­ber of pas­sen­gers over a 12-month pe­ri­od and oth­er in­for­ma­tion rel­e­vant to its op­er­a­tion,” the air­line added.

It said that in terms of pas­sen­ger and flight de­tails, for the pe­ri­od Ju­ly 17, 2021, to Ju­ly 31, 2022, the air­line op­er­at­ed 6,527 flights car­ry­ing 416,780 pas­sen­gers.

“Caribbean Air­lines is mind­ful of the need to have an ef­fec­tive air­bridge be­tween Trinidad and To­ba­go and the com­pa­ny con­tin­ues to close­ly man­age the same, bear­ing in mind the con­sid­er­able con­straints out­lined above,” it had said.

On Oc­to­ber 13, 2025 when CAL an­nounced its new act­ing chief ex­ec­u­tive, Nir­mala Ra­mai, the com­pa­ny said the board and se­nior lead­er­ship team would be fo­cus­ing on five key ini­tia­tives: sup­port­ing em­ploy­ees and stake­hold­ers with open com­mu­ni­ca­tion and care; re­view­ing op­er­a­tions to in­crease ef­fi­cien­cy and mod­erni­sa­tion; en­hanc­ing the cus­tomer ex­pe­ri­ence with im­proved ser­vices; de­vel­op­ing a long-term, fi­nan­cial­ly re­spon­si­ble and sus­tain­able growth plan; and con­duct­ing full and thor­ough au­dits of all de­part­ments and process­es, to strength­en gov­er­nance, safe­ty, and ac­count­abil­i­ty.

The air­line al­so put up two of its ATRs for sale and it plans to wel­come three ad­di­tion­al Boe­ing 737 MAX 8 with­in the next 12 months.

In Jan­u­ary, CAL al­so put in mo­tion changes to the air­line as part of its on­go­ing net­work op­ti­mi­sa­tion pro­gramme.

It dis­con­tin­ued ser­vice to Tor­to­la, British Vir­gin Is­lands and San Juan, Puer­to Ri­co routes fol­low­ing what the air­line said were com­pre­hen­sive eval­u­a­tions of route per­for­mance and re­source de­ploy­ment.

It al­so an­nounced it would re­struc­ture its Bar­ba­dos hub from Feb­ru­ary 2026, with air­craft and crew to be tran­si­tioned to op­er­ate from Trinidad.

In No­vem­ber 2025, CAL dis­con­tin­ued flights be­tween Fort Laud­erdale, Flori­da and Mon­tego Bay and Kingston in Ja­maica due to poor per­for­mance.

“These changes form a crit­i­cal part of our plan to de­liv­er re­li­able ser­vice while man­ag­ing our re­sources re­spon­si­bly. Our cus­tomers re­main our pri­or­i­ty, and these ad­just­ments en­sure we con­tin­ue to pro­vide strong re­gion­al con­nec­tiv­i­ty, sup­port­ed by a sus­tain­able and com­pet­i­tive op­er­a­tional mod­el,” Ra­mai had said.

Guardian Me­dia sent ques­tions to Ra­mai last week, but she nei­ther ac­knowl­edged nor an­swered those ques­tions.

For Caribbean Air­lines (CAL), prof­itabil­i­ty has been as cycli­cal as the avi­a­tion busi­ness. While it has post­ed some prof­its on pa­per be­tween 2009 and 2019, these were out­weighed by its mam­moth bil­lion-dol­lar debt.

In the course of the com­pa­ny’s op­er­a­tions, it ac­cu­mu­lat­ed loss­es of US$454 mil­lion ($3 bil­lion), ac­cord­ing to its 2020 man­age­ment ac­counts.

CAL start­ed op­er­a­tions on Jan­u­ary 1, 2007, cap­i­talised with US$100 mil­lion ($677 mil­lion). A clean bal­ance sheet, a lean­er flight sched­ule, sub­sidised fu­el with a fu­el hedge set at US$50 and a small­er staff were key to its ini­tial suc­cess.

How­ev­er, sev­er­al bad in­vest­ments over the years re­sult­ed in over $1 bil­lion in loss­es.

In 2021, af­ter the air­line suf­fered fi­nan­cial loss­es be­cause T&T closed its bor­ders dur­ing the pan­dem­ic, it had to re­trench work­ers. CAL cut a to­tal of 280 jobs, in­clud­ing 79 pi­lots, in a bid to stream­line its op­er­a­tions.

The com­pa­ny sub­se­quent­ly is­sued a re­lease ex­plain­ing that the job cuts were few­er than the pro­ject­ed 450 jobs it had in­tend­ed to sev­er when the re­struc­tur­ing ex­er­cise be­gan.

Then fi­nance min­is­ter Colm Im­bert had pegged the sev­er­ance costs at $110 mil­lion to be paid by the T&T tax­pay­ers, as there would be no in­put from CAL’s mi­nor­i­ty par­ty, Ja­maica.

In 2020, with the COVID-19 pan­dem­ic, the air­line made a loss of US$103 mil­lion.