CAL announces temporary lay-offs, salary cuts to save airline

Caribbean Airlines has announced furloughs and salary cuts as short-term measures to save the struggling state carrier, starting from October 15.

In a statement on Monday, CAL said these temporary measures will support the airline’s recovery.

The airline industry has been among the hardest hit by coronavirus travel restrictions, with demand for air travel nosediving.

CAL has tried since the covid19 pandemic to expand its routes up the islands to capitalise on the gap in service when LIAT was liquidated in June, but international/regional travel originating in TT, save specially approved flights, has been grounded, as the government has kept the borders closed since March.

In April, CAL sought a government-guaranteed US$65 million loan to help it stay afloat, but that short-term solution is nearing its end.

“Reduced demand due to the global pandemic has presented significant challenges to Caribbean Airlines’ revenue and cash position and it must now take further steps to streamline expenses and its manage cash,” CAL said.

The airline said that after careful consideration, including discussions with key stakeholders, it intends to implement cost-cutting measures including:

- Salary reductions for eight months from mid-October 2020 for those paid more than $7,500 per month, on a tiered structure.

- Temporary layoffs for approximately one third of employees for three months, depending on their role and the current needs of the business.

- Continued cost reductions wherever possible, including reducing contractors and temporary workers and allowances that are not relevant at present.

It said, “The airline confirms that standard industrial relations criteria were used to select the employees who will be temporarily laid off. The leadership team recognises the impact of these measures on its employees and their dependents and has put systems in place to support those affected.”

Current operations are not affected by the temporary layoffs, including cargo/freight services, the airbridge, Kingston and Barbados-based commercial services and special government approved flights to/from Trinidad and Tobago.

Last year CAL managed to turn a profit for the first time in years.