CAL/Max 8 contracts up in the air

CARIBBEAN Airlines Ltd (CAL) will be seeking advice from aviation experts to determine the best course of action regarding its lease arrangement contract for 12 new Boeing Max 8 aircraft, following worldwide safety concerns in the aftermath of the fatal Ethiopian Air crash last Sunday.

This does not mean the contract, which stipulates the first plane be delivered by December, has been cancelled.

Finance Minister Colm Imbert, in his capacity as line minister for CAL, as well as Corporation Sole, announced yesterday at the post-Cabinet media briefing that he gave the state airline a directive to review the contract and “get international assistance from aviation experts,” particularly lawyers specialising in aviation law to look at the terms and conditions of the contract.

“One of the obvious conditions must be that the aircraft must be certified as fit for purpose. In the current situation, with the (US regulator) Federal Aviation Authority grounding the aircraft, clearly these aircraft would not be fit for purpose today. We do not know what it will be like in December.

GET LEGAL ADVICE

"CAL has been instructed by me to get the best legal advice in the world regarding these leases and also to put contingency arrangements in place with the aircraft leasing companies (for) alternative aircraft in the event that, as we get closer to December, the FAA decides there is a permanent problem with the aircraft,” he said, noting that decision by the FAA to ground these jets is temporary.

There’s also a psychological issue, with passengers wary about flying in these planes, but Imbert said even if the FAA did determine the Max 8 was a good aircraft, “I’ve asked CAL to examine all options and make sure at the end of the day whatever happens, citizens of TT, the travelling public will be protected.”

CAL’s current fleet comprises 12 Boeing 737-800s, one of the most popular and safest planes ever made. In November, the airline had announced its plans to upgrade and replace its fleet with the more modern Max 8.

The airline has already made a US$7 million down payment for the new planes, but, Imbert said, that would be contingent on the successful delivery of planes that have been deemed airworthy by the relevant authorities.

LAWYERS WILL ADVISE

Communications Minister Stuart Young added that while the government was not yet in any position to make a definitive legal interpretation of the contract, “as a lawyer,” he would be surprised if the country was locked into the contract should there be any proven issues with the planes.

Imbert said he spoke with the CAL chairman (Shameer Mohammed) on Wednesday night and was told that, at first read, the contract “speaks to certification and airworthiness being precedent to the acceptance of the aircraft.” “The preliminary view is the planes can’t be delivered if they are not declared to be airworthy. We are not playing by guess. I am not advising myself. We are going to get best aviation lawyers in the world to determine what are our rights and options and how we can protect ourselves from any loss of revenue. I can certainly give you the assurance that CAL will not be flying any aircraft that is deemed to be not airworthy by any regulatory authority,” the minister said.