Caribbean Airlines to reduce fleet, send home more than 400 with revenue down by 75%
As it continues to battle the negative financial impact brought on by the COVID-19 pandemic, Trinidad-based Caribbean Airlines has announced moves to reduce its fleet and cut back on staff.
In a statement on Monday, the Airline said these steps are being taken 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,” the statement noted.
As part of the streamlining strategy, the number of jets in the fleet will be reduced. Its route network will also be adjusted to reflect the changing market.
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 said it will embark on consultation with the employees and other stakeholders, with respect to treating with this surplus labour situation.
In the same statement, Caribbean Airlines also 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,” it further noted.
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, CAL says 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.