NOW IT IS BWIA’S TURN

Two crucial factors in LIAT’s upward movement on the graph have been, in addition to the restructuring plan, the agreement of Caricom Prime Ministers of the plan and a needed financial injection from the regional Petroleum Revenue Stabilisation Fund, the brain child of Trinidad and Tobago Prime Minister Patrick Manning. It is this declared regional support for BWIA which has been pointedly lacking even though the airline has been serving the Caribbean since its inception in 1940.

BWIA, not unlike LIAT and indeed other airlines, has suffered mounting losses following on the economic downturn in the United States in the first quarter of 2001, a situation aggravated by September 11, 2001. A six-member task force which has been studying the future viability of BWIA, however, is to submit a report of its commercial evaluation of the airline. It had, initially, been given a deadline of April 30.

But while the statement by LIAT’s Chief Executive Officer, Gary Cullen, may be overly optimistic in concluding that the airline’s favourable economic results for the first quarter showed that it was on the way back to long-term financial health and viability, nonetheless the results are heartening.

LIAT’s load factor, Cullen pointed out "increased by three points. We have increased our market share and our pasenger revenue was 18 percent ahead of last year. Schedule reliability has also improved. Our operations are now in good shape."

Admittedly, the period of the year, the winter season, along with a drop in competition would have contributed to the increase in the airline’s market share and passenger revenue. Nevertheless, the financial injection from the regional Petroleum Revenue Stabilisation Fund and the implied support of the region, what with approval of the plan coming from Caricom Prime Ministers, were pluses that cannot be ignored.

Most airlines operating today have had their bottom line hard hit, not only by September 11 and the backlash that followed, but by the high cost of aviation fuel which has been a direct result of the sharply increased international prices for crude. In addition, the high cost of steel, a direct result of demand by China and Japan, has impacted negatively on the airline industry. Most of the world’s airlines, including BWIA, are likely to require not insubstantial injections of capital within the immediate future, along with direct and indirect State financial support.

BWIA’s injections of capital have come from the Government of Trinidad and Tobago. What will be of critical additional assistance will be for the English speaking Caribbean countries to declare BWIA a regional carrier. It is an idea which they have resisted stoutly since its formal proposal in 1968.

Hopefully, the regional Petroleum Revenue Stabilisation Fund, a creation of the Government of Trinidad and Tobago, and its financial support for LIAT, may provide the catalyst for long overdue Caribbean support for BWIA. The first quarter of 2005 marked a brighter future for LIAT. Now it is BWIA’s turn, or at least should be.