Home' Trinidad and Tobago Guardian : May 15th 2013 Contents A17
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Minister of Trade, Industry and Invest-
ment Vasant Bharath said yesterday that
the merger of Caribbean Airlines (CAL)
and Air Jamaica has not worked out the
way it was planned.
"The intention was to have a Caribbean
airline and the merging of Air Jamaica
and Caribbean Airlines was supposed to
provide that. There was a stipulation by
the International Monetary Fund (IMF)
that Jamaica would divest itself of Air
Jamaica and that is how CAL and the
Government of T&T stepped in. Clearly
it has not worked as it was intended to
work because of the intervention of low
cost carriers like Delta, West Jet, Jet Blue,
which have come into the market place
and usurped a lot of the traffic from those
routes," said Bharath, who is also Minister
in the Ministry of Finance.
Bharath spoke to the media yesterday
after the Caribbean Investment Forum
(CIF) launch at the Hyatt Regency Hotel,
He also said this is not the first time
St Vincent Prime Minister Ralph Gonsalves
has raised the issue of T&T s Government s
subsidy to CAL.
"It is not the first time he has raised
it and it will be premature for me to make
any announcement on it. The fact is when
CAL was initially set up there was a grace
period of five to six years when the airline
during its restructuring would be given a
subsidised aviation fuel price until it
attained operational efficiencies. We have
consultants coming from abroad to look
at the operation," he said.
Gonsalves plans to discuss the issue
with Prime Minister Kamla Persad-Bisses-
sar when he comes to T&T later this
month for a meeting of regional leaders.
Bharath said he has already written to
Jamaican Transport Minister Dr Omar
Davies with regard to issues of the CAL
and Air Jamaica and will be leading a del-
egation there in June.
"The board did make a presentation to
Finance Minister Howai and I last week
in the persons of the deputy chairman
and the acting CEO Robert Corbie. It was
primarily about what they intend to do
over the next 24 months but also to explain
in more detail the rationalisation of the
Jamaican routes. The frequency of those
routes have been reduced by 50 per cent,"
When asked by reporters if "heads will
roll" over possible mismanagement at
CAL, he said he is not in a position to
"I can not say that for the moment as
we have not received final reports on these
issues and many of them are still ongoing.
Many of them are just allegations in the
press so we do not know for sure as yet,"
When questioned about if anything has
been done about "free rides" given to
friends of CAL s management, he also
declined to comment.
"It would be premature to say that, I
do not know if that was actually the case
in the first instance. It is just a newspaper
report and the Ministry of Finance is
investigating it,|" he said.
Despite CAL s current situation he is
optimistic that the troubled airline would
break even by 2014.
"The impression I have that I have got
from the chairman is that by the end of
2014 CAL should be breaking even."
NEW YORK---The price of oil slid by nearly US$1 a
barrel yesterday as the International Energy Agency
raised its forecast for US oil production while cutting
its prediction for global crude demand.
Benchmark oil for June delivery dropped 96 cents
to close at US$94.21 a barrel on the New York Mercantile
Exchange. Oil has declined US$2.41 a barrel over the
last four trading sessions. The loss came after the Paris-
based IEA, which advises 28 countries about energy
issues, said rising US oil output will be the key source
of new supplies over the coming five-year period.
"The supply shock created by a surge in North Amer-
ican oil production will be as transformative to the
market over the next five years as was the rise of Chinese
demand over the last 15," the IEA said in its in its medi-
um-term market report.
While noting risks such as the effects of the Arab
Spring on investment and capacity growth in the North
African and Middle East oil industries, the IEA said it
expected "a more comfortable global oil supply/demand
balance" in the next five years.
Oil slides as IEA sees US output rising
Bad management of the Air Jamaica/Caribbean Air-
lines (CAL) merger has caused an initiative that could
have had a positive impact on Caribbean integration
to go sour, says Professor Emeritus Norman Girvan of
the University of the West Indies.
Girvan, a Jamaican living in T&T, who describes himself
as a "follower of Caribbean integration," said this was
what concerned him most about the controversial issue.
"It seems to have been badly managed. It appears it
has not been a success so far and would help undermine
relations between T&T and Jamaica instead of building
Girvan referred to a "situation where the government
of Jamaica is concerned about routes being closed and
pilots being laid off" and said this created a very bad
image for CAL in Jamaica.
He said the airline s market was the Jamaican diaspora
and warned if CAL were not careful it would lose it.
Asked about the complaints by regional governments
that Liat is losing profits because of the fuel subsidies
CAL gets from the T&T Government, he said, "Instead
of fostering integration, the issue is contributing to bad
Commenting on the reported financial losses of CAL,
Girvan asked, "If you start off with a clean balance sheet
and have fuel subsidies, how do you end up with so
much debt? Something must have gone wrong."
He noted the success of Copa, a Panama-based regional
airline, which is privately owned and operates without
subsidies. The solution for CAL, he said, was for the
airline to be run on proper business principles.
caused merger to
CAL, Air Jamaica merger
did not go as planned
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