CARIBBEAN AIRLINES Ltd (CAL) has released figures that suggest a reduction in losses by $120 million for the first half of 2018, with revenue up by $210 million or 19 per cent. The figures will go some way to assuage concerns over the viability of the State-owned airline, which has been under pressure in recent weeks due to reports of poor management practices there. However, in the absence of full, audited accounts, it is premature to assume CAL is finally lifting off after a prolonged slump.
All would certainly hope for a turnaround. The last few weeks have seen the airline, and its CEO Garvin Madera, come under heightened scrutiny due to the findings of a parliamentary committee that found poor recruitment practices and lax security checks, the latter of which have been denied by the airline.
As luck would have it, the airline was also caught up in a phishing attack in June, which did little to bolster faith in its brand. It’s not known if anyone has been held responsible for that matter - which did not affect the CAL website itself but rather its good name – or if CAL has initiated legal action for damages.
Several factors may have contributed to increased revenue. As CAL notes, there were higher revenues from its line cargo and freighter operations; increased airbridge capacity; and more regional and international passengers. The company also introduced a new route to Havana, Cuba, in January.
Yet, to say revenues are up is not to say profitability is up. Indeed, it is understood that the better performance has simply alleviated a loss-making situation. The exact level of expenditure is not clear, but in 2014, CAL made a $403 million (or US$60 million) loss. That was the last time CAL released financial statements to the public.
It should also be noted that increased passenger levels may reflect trends which have little to do with CAL’s business operations. For instance, the damage to neighbouring Caribbean islands has resulted in a diversion of tourism to these shores. Tourists, unable to visit traditional stomping ground, have sought other options. Further, the well-documented woes in relation to the inter-island ferry undoubtedly would have affected the numbers on the inter-island CAL route.
The airline has not given an analysis of the performance of its routes, including the new Havana flights, for any kind of informed assessment to be made over its choices and priorities over the reporting period. While it is certainly good to see an upward trend, it is unacceptable that the State airline has delayed releasing final accounts for the digestion of taxpayers. In the meantime, it’s hard to tell whether meaningful change has been happening. We’re left flying in the dark.