|CAL proposes ancillary fees for air bridge |
MIRANDA LA ROSE Wednesday, January 11 2017
CARIBBEAN Airlines Limited (CAL) has proposed the implementation of ancillary fees for the Trinidad to Tobago air bridge which is currently running at a loss to the airline even though it receives an annual subsidy from Government.
CAL chairman, Shameer Mohammed, told the Joint Select Committee (JSC) inquiring into State Enterprises on Monday that the propos- al was sent to the Ministry of Finance and CAL is awaiting a reply.
Asked what CAL was doing to make the route profitable, Mohammed said, “First of all I do not believe that the domestic routes should be charged to the Ministry of Finance.
The fact is that we should envisage ourselves as a commercially viable enterprise. That is the mantra that I preach at CAL.” Nevertheless, the air bridge was an essential service, he said, “and very few essential services are operated for profit services.” He noted that the air bridge has moved over 800,000 passengers from January to November this year.
On a suggested increase to the air fare, Mohammed said, any increase was “controlled by policy direction and therefore, the determination of that fare is determined by what level of support that the Government would like to provide to the citizens on the air bridge.” The records will reflect, he said, the operation of the air bridge segment, “is a non-profitable route for the airline, but we are committed to providing the support and the mandate that we have been charged with in providing that service.” CAL was confined to the changes it can make on the air bridge service, he said, including something as basic as a date change.
Over 25 percent of passengers on the air bridge, he said, were no shows with no penalties applied for a date change.
“We have looked at a series of initiatives as a direct cost to passengers without interfering with the flat fare,” he said.
He said in the short space of time since he was appointed chairman of CAL’s board of directors, he has met twice with THA Chief Secretary Orville London to address the issue.
He said, “We recognise that it is not just air movement but national development of Tobago and the country at large.” Meanwhile, Acting Permanent Secretary in the Ministry of Finance, Lisa Phillips, said the ministry received the request for the additional charges in October last year and has asked CAL for additional information.
“Once we get the information we should be able to give a decision by February,” Phillips said.
Noting that as the air bridge was considered an essential service, JSC Chairman David small asked Phillips whether or not government had been asked to consider providing total coverage for the service. She said the ministry has never considered having to reimburse CAL for the total cost of the air bridge.” The Trinidad to Tobago air bridge accounts for 52 percent of its flights while regional and international flights account for the remainder.
Asked about the cost of a ticket in terms of the real value and the subsidy, Mohammed said, “In terms of operating costs, we estimate that figure depending on the price of fuel, in or around the $600 to $700 range for a round trip.” The round trip of $300 has been in place since 1994, Mohammed said.
In addition, he noted, “The airline receives a subsidy of $100 per adult passenger. We do not get a rebate or subsidy for a child who may occupy a seat.” He said that the subsidy on the fare has remained the same, notwithstanding that the operating cost of the airline industry is based on US dollars.
For 2017, he said that the Ministry of Finance would have allocated the sum of $41 million for CAL as subsidy for the air bridge.