CAL and the way forward

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Contributed by John Bell

With the appointment of a new CAL board under the chairmanship of Phillip Marshall, and the news that Robert Corbie has resigned as CEO with immediate effect, it would seem that, not before time, a new breeze is lifting the wings of the airline.

Perhaps it is possible that this will include a strategic review of just what Trinidad & Tobago and the wider Caribbean should expect from CAL, and how the airline should now proceed to deliver that.

Obviously the first item on the agenda must be to hire an internationally credible, experienced airline professional as CEO. With all the realignment that has recently taken place in the US and European airline industry this must surely be a buyer’s market for such an executive.

The search criteria should stress industry knowledge and experience and demonstrated management ability, not national or political connections

There are many, perhaps even a majority, who take the view that Trinidad can well do without the expensive luxury of playing host, and banker, to a regional airline. It could also be argued that the engine of Trinidad & Tobago’s economic development must surely be international trade and tourism, and in these islands this is totally dependent on market access, for which read international airline connections.

That is why Singapore, The United Arab Emirates and Qatar have gone to such lengths to develop their now internationally renowned airlines

Perhaps because of the perceived luxury personified in jetting around the world – recognize that phrase? Airlines have long enjoyed an esoteric luster. In fact stripped of that bogus mystique they are reduced to being what they really are: a highway in the sky for business and leisure traffic

We are accustomed to underwriting the cost of new roads, repairs to existing highways with appropriate signage, as part of the infrastructure necessary to support trade, commerce and the movement of people at a national level. Is it such a big leap to embrace doing that between T&T and its business partners around the world?

There can be little doubt that the Caribbean, with its top heavy dependence on tourism, needs a regional airline with which to manage and develop its life giving tourism flows.

It will, of course, be argued that the existing international carriers can be prevailed upon to provide the requisite air lift, and if there is a cost to be born in providing it – which there certainly is -, it will be a whole lot less than the financial black hole we are currently pouring money into.

It can also be argued that while the rest of the Caribbean needs ownership control over its tourism flows, Trinidad does not. Tobago may, of course, have a rather different view

Trinidad inherited the regional airline mantle when it deliberately acquired BWIA in 1962 as part of the breakup of the Federation of the West Indies. Since then both BWIA, and now CAL, have focused their marketing almost exclusively on the VFR (Visiting Friends and Relatives) market – taking West Indians to visit their relatives in Brooklyn, Toronto and London, and vice versa.

This may make for good politics, as that is certainly where the votes are, but it is not good economics. Foreign tourists stay in hotels, eat in restaurants, buy sightseeing tours and souvenirs. They pump money into the economy, unlike the Diaspora.

If CAL were to redirect its strategic focus to the development of tourism, instead of prostrating itself before the Diaspora, which, of course, will still continue to fly in any event, it would immediately strengthen existing tourism markets, and open up new ones, particularly for Tobago.

This is not to say that T&T should open up its purse to underwrite the cost of providing air service to every island in the Caribbean. But just as Tobago presently buys air service out of the UK and Europe to support its tourism industry, so any other island should similarly be prepared to subsidize such service out of its desired source markets. They currently do it for American and Virgin for example, why not CAL?

Properly managed CAL should be able to break even, or come close to it and if there is a shortfall it should be considered as a good investment in strengthening T&T’s economic development in a contracting world, not an irresponsible drain on the public purse .

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December 20, 2013
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