Home' Trinidad and Tobago Guardian : August 20th 2015 Contents AUGUST 20 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
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The rumours and speculation surrounding the con-
tinuation of the London route are most unsettling.
Caribbean Airline (CAL) has pulled out of the UK
before, claiming the route was not viable due to
the wrong aircraft being used at the time, the Airbus
340. While the statement was correct and the route
discontinued on account of that, it was an easy fix to change the
type of aircraft which would have turned the route from loss making
to profitable. However, the will of the decision makers at the time
seemed hell-bent on disposing of the slots at Heathrow and code
sharing with BA. The code-share was a disaster for CAL.
It seems we could possibly be repeating the errors of the past.
Get on a CAL flight from London and count the empty seats.
The loads are favourable, by no means full, but by no means empty
as anyone who flies the route on CAL regularly would know.
No one had said the route is not viable but what they have said
is that it has "not performed to expectation" or "under performed".
The route has been described as "loss making." I don t believe it
is. The route has been running for only three years and while three
years is enough time to begin to see the investment bearing fruit,
it s not enough time to categorically say that the route is not viable.
Let s not forget what the route has been handicapped with:
• The debacle at the start-up when CAL s own aircraft could
not be used for months because of certification issues and aircraft
had to be wet leased from Omni;
• The poor distribution system which seems unable to deliver
the complex distribution and inventory management required to
operate in the UK market;
• Let s not forget the constant disruption to the smooth running
of the Airline, created every time the CEO and the board is changed.
It is a testament to those running the airline (managers and middle
management) that they have managed to keep the CAL afloat
despite the constant disruption to its stability.
...So is it any wonder we are where we are now?
CAL has decided to change its distribution system to Amadeus,
the most modern and some say best global distribution system
(GDS) available. That s one step in the right direction.
I read that "retiring the B767" will bring down the carrier s oper-
ating cost and, of course, it will but only if they are not replaced.
If they are replaced the operating costs go back up to accommodate
the new aircraft and unless there are very good reasons for replacing
the aircraft the exercise seems superfluous. The B787 will save on
fuel, but cost more to lease. Coupled with the handing back of
other aircraft, it seems to me that downsizing is certainly one way
to get back into profitability. But let s not imagine we are talking
about the same network, fleet and staff numbers as CAL has now.
The routes identified as productive are New York, Toronto and
Fort Lauderdale---not mentioned is Georgetown---one of the most
vital destination/origin points on CAL s system network. Miami
is noticeably absent too, it used to be profitable but competition
makes it less so. Competition can turn any route from being
profitable and no one can control this particular factor. If CAL
gave up all the routes on which competition threatens their prof-
itability then they might as well stop flying.
Longevity comes from a good mix of the following; good man-
agement, loyalty, dominance, innovation, growth, consistency,
financial acumen, adaptability, persistence, drive, daring, vision
and luck. In recent times, I feel CAL has been short in some of
What would I do if I were in a position to influence CAL:
• Change the long-haul fleet to B787. Yes, the lease costs are
more, but the fuel savings could make up for that. It will also
improve the product which in a competitive market is a good thing;
• Definitely change the GDS to either Sabre or Amadeus, the
inventory control, flexibility and reliability of these GDS s are going
to save money in the long run;
• Fly London to Georgetown direct: dominance of this route
will pay dividends and is unlikely to appeal to competitors:
Fly Kingston to London: the B787 will make the route extremely
viable and may even make a triangular flight LON KIN GEO LON
• Look at St Vincent: with their new airport the destination
may become viable if mixed with a double drop somewhere else
in the Caribbean;
• Fuel savings on the B787 makes New York and Toronto more
• Look at competing with LIAT for short haul routes;
• Re-train staff that interact with passengers.
Not having more knowledge limits what I can suggest but the
above list is certainly worth looking at.
In short, I feel that CAL pulling off the London route is a mistake,
a code-share with BA is a poor option, and there is not a good
history with BA, which ended the last code share after a while and
did not re-new it. Who knows if BA will even entertain the idea
of a code-share and if it did, be sure it will be on its own terms,
the benefit to CAL, or indeed, T&T will be minimal.
The London route should have been given five years to break
even and the costs of the wet lease at the beginning should not
be held against the route as it was an extraordinary cost. In three
years we have had as many CEO s and chairmen. This is no way
to run an airline, no way for any vision to be given chance. Please
Robert Aidat-Sarran is the managing director of London-
based Club Caribbee, Caribbean flight specialist since 1981.
Think again on
CAL's London route
Ihave not been able to get my hands on the man-
ifesto launched by the Prime Minister Kamla
Persad-Bissessar except what has been placed
in the public domain under the headings, ranging
from the economy to procurement, amid the
incessant and vacuous claims that "Kamla has a plan."
Under the economy the PM refers to the green econ-
omy with which she says she will create jobs, new busi-
nesses and economic growth. However, the words "green
economy" have been so prostituted in the popular lit-
erature, they have become as meaningless as the word
For reference, the green economy is defined as an
economy that results in reducing environmental risks
and ecological scarcities and one that aims for sustainable
development without degrading the environment.
The UNEP Green Energy Report argues for a transition
of the economy to one that is low-carbon, resource
efficient and socially inclusive. It includes a direct eval-
uation of natural capita, and ecological services as having
economic value; ecological damage incurs a price. In
general, a green economy is one which is considered
to be a component of the ecosystem in which it resides.
Hence, the issues and the green economic policies
of a country are particular to how the country s socio-
economic behaviour impacts on the host s eco-system
and can include how such an economy can improve
its external trade via the solution of this issues.
The major green environmental issue in T&T is glar-
ingly defined as its carbon footprint. This country is
ranked 5th in the world in per capita emissions of CO2,
though it is 71st in total emissions.
Our emissions are high, primarily because of our
petrochemical and electricity plants. The dilemma is
that as a plantation economy, we depend for our liveli-
hood on the energy sector and in particular its gas based
Going green in the short term can clash with our
ability to live. It will be expensive to, say, capture the
CO2 emissions and remain competitive in the global
markets that are not doing the same. The general
greening strategies that are available to us include carbon
sequestration, energy efficiency and reduction in elec-
tricity generation by hydrocarbons and power con-
sumption, CNG as a vehicle fuel and the use of renewable
The Government has been encouraging the use of
CNG in vehicles, solar lighting in public places and the
UTT has just unveiled a model house that is totally
supplied by renewable energy (solar cells). However,
subsidisation of the price of energy locally mitigates
against its efficient use and conservation. Therefore,
the reduction in these subsidies is seen as a prerequisite
if energy efficiency is to be achieved. In our consumer-
economy cheap fuel and the importation of new and
used cars have combined to foster traffic pollution of
What is surely not a short- to medium-term option
is the curtailment of our petroleum industry though
we talk about carbon sequestration and less carbon
generation plants as the criteria for any new and even
our older plants.
In the context of the diversification of our economy
which is daily becoming more and more urgent, these
application, the acquisition of knowledge, imbedded in
an innovation system can become the trigger for their
use in new applications and situations, eventually creating
new knowledge via R&D centres.
Dr Ronald DeFour of UWI in his quest to improve
the efficiency of electricity use, realised that electric
motors are the major users of electric energy. He invented
a new control method (patented) that substantially
increased the efficiency of these motors. However,
because there is no national innovation system, no
venture capital, no marketing and international market
development, this invention has virtually remained on
Mary K King, St Augustine
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