[UPDATED] CAL to cut 450 staff as part of restructuring

Caribbean Airlines Ltd workers are waiting to see who among their number will be retrenched, after the airline announced it would be retrenching 450 people – approximately 25 per cent of its workforce – as part of measures to streamline its operations.

Other measures announced were the reduction of the number of jets in its fleet over the course of 2021, and the adjustment of its route network.

CAL said the company will consult the workers and other stakeholders to address the surplus labour situation.

In response to an e-mail from Newsday asking how the 450 workers would be identified, corporate communications manager Dionne Ligoure said the process will be transparent and equitable.

She said the consultation process is expected to be concluded during the next month.

“Any further details will be released when necessary. There will be employee assistance programmes in place, as the company takes its duty of care seriously and has ensured that support is in place for persons needing assistance.”

Revenue loss

The airline said one of the main reasons for the restructuring exercise was the loss of $172.7 million (US$25.7 million) and a 75 per cent decline in revenue in its unaudited financial results for the first quarter of 2021, compared to the same period in 2020.

It said the losses follow a similar downturn in 2020 which saw an operating loss of $738 million (US$109.2 million) compared to operating profits for 2018 and 2019.

CAL said covid19 has been an unprecedented shock to air travel, and Caribbean Airlines has felt first-hand the effect of the pandemic over the last year.

Given the financial impact of the pandemic, CAL said it proactively reduced costs, and Q1 2021 expenses are down 52 per cent compared to the same period in 2020.

The airline continued to offer services on many of its routes and provided invaluable repatriation flights for Caribbean citizens.

Further, the airline was kept afloat through a government-guaranteed loan and a cash injection by the government totalling US$100 million.

CAL said after implementing several short-term measures to stabilise the airline, regrettably, it is now left with no choice but to undertake further solutions based on existing needs.

“Therefore, until air travel regains its pre-covid19 momentum, the airline will need to adjust its operations to cater for a reduced scale of demand after the opening of the borders.

“Put simply, passenger demand in the short to medium term is not going to recover sufficiently to support the existing company structure after the reopening of the borders.”

CAL said the moves would have no effect on many aspects of its operations.

“These measures will not affect flights, cargo operations or the quality of service, safety and customer care that customers expect.

“Our customers can continue to expect the same standard of safety and superior service that the airline is known for.”

Minister in the Ministry of Finance Brian Manning said the ministry had no comment on the announcement. Finance Minister Colm Imbert was in the Senate all day and could not be reached for comment.

The announcement comes less than a week after Imbert called on CAL to become more efficient. He was speaking at a media conference on June 15.

Difficult time for workers

A CAL pilot, speaking on condition of anonymity, said it was a difficult time for all workers. He said the news was especially hard owing to previous salary cuts and temporary layoffs.

“It’s hard, after agreeing to and accepting a 57 per cent pay cut and ‘banding yuh belly’ since October last year to help all pilots keep their jobs and get a salary to survive then, to face possible retrenchment now.

“It’s a hard pill to swallow, but we will wait to see what the company is doing.

“I’ve heard stories of guys having to sell assets to survive – car, house, boat, etc. There are people who can’t afford to pay their mortgages and are facing the possibility of losing their homes.”

He said many pilots were still paying off student loans of between $350,000 to $500,000.

Union: Company scaring people into accepting anything

Aviation, Communication and Allied Workers Union secretary general Peter Farmer said while the circulars being given to workers do not say who would be retrenched, last-in, first-out was the method being mentioned.

“They will be inviting people in to discuss the way forward, but this is their method of scaring people into accepting whatever they offer in case they lose their job.

“In addition, they have taken a salary reduction from quite a number of people, and they only reached up to $40,000 at 15 per cent.

“So people who work for $150,000 a month, their salary is reduced by 15 per cent as if they’re working for $40,000 when in fact, in terms of any kind of equity, it should be 30 per cent of their salary.

“Certain workers who have been laid off for nine months, they have not paid these people any money. So if these workers are retrenched, the workers will be paying to retrench themselves, as the salaries they have not been paid will be used by CAL to pay them off.”

Farmer said the union will be asking for consideration of service housing lots for retrenched workers, such as were given to Petrotrin workers and sugar workers.

This story has been adjusted to include additional details. See original post below.

STATE airline Caribbean Airlines Ltd (CAL) has announced it will streamline its operations for 2021 and beyond, after a decline in revenue and a loss in the first quarter of 2021.

It said 25 per cent of its workforce, approximately 450 people, is surplus to its needs and will be laid off.

It will also reduce the number of jets in its fleet.

In a release on Monday, CAL said the company will start consultation with its employees and other stakeholders on dealing with its surplus labour situation.

It said while the announcement that TT’s borders may soon reopen is welcome news, all forecasts suggested air travel will not resume at the same level as pre-covid.

So, it said, “Until air travel regains its pre-covid momentum the airline will need to adjust its operations to cater for a reduced scale of demand after the opening of the borders. Put simply, passenger demand in the short to medium term is not going to recover sufficiently to support the existing company structure after the reopening of the borders.

“As a consequence, Caribbean Airlines is required to take further steps to ensure it has a sustainable business model for 2021 and beyond.

"These steps include major cost reductions in all areas of the airline's operations, specifically its human resource complement, its fleet and other assets, and its route network."AS well as cutting the number of aircraft it will also reduce its route network.

CAL’s unaudited financial results for the first quarter of 2021 showed a loss of $172.7 million (US$25.7 million) and a 75 per cent decline in revenue, compared to the same period in 2020.

The airline said these losses follow a similar downturn in 2020, which saw an operating loss of $738 million (US$109.2 million) compared to operating profits for 2018 and 2019.

Since the beginning of the covid19 pandemic and the suspension of operations at its base in TT, the airline has seen passenger numbers plummet, and flight numbers reduced to less than ten per cent of normal operations.

The airline said despite this, it continued to offer services on many of its routes and provided invaluable repatriation flights for Caribbean citizens. It said, given the financial impact of the pandemic, CAL proactively reduced costs, and Q1 2021 expenses are down 52 per cent compared to the same period in 2020. Further, the airline was kept afloat through a government-guaranteed loan and a cash injection by the government totalling US$100 million.

CAL said its passenger and cargo services continue to operate, with all the latest flight details available on www.caribbean-airlines.com.

The airline thanked its customers for their continued support.