Govt gets breathing space for BWIA

GOVERNMENT succeeded yesterday in getting 120 days (four months) of breathing room for BWIA to clear all of its outstanding liabilities and Prime Minister Patrick Manning announced that immediate changes must be made in the national airline’s existing management structure.

Addressing a post-Cabinet news conference at Whitehall, Planning Minister Dr Keith Rowley said talks earlier in the day between Government and lessors International Lease Finance Corporation (ILFC) at the Finance Ministry resulted in ILFC agreeing to give BWIA “120 days of breathing space” to deal with its outstanding liabilities. He explained that BWIA has from now until September to use revenues from its most profitable season to pay its outstanding debts and ILFC would make no attempts to seize its aircraft during this time. Government, Rowley continued, assured ILFC that BWIA “would be able to meet its liabilities for the coming months” and also secured the immediate release of two BWIA 737 jets seized recently in Miami. The Minister said ILFC officials told Government that its actions were precipitated by empty promises from BWIA about dealing with its liabilities and Government will pay some US$ 5.5 million of the airline’s outstanding arrears from March to May and back up BWIA’s ability to pay a US$ 2 million monthly lease to ILFC.

Manning said the due diligence at BWIA will be completed within the next three weeks. “The Board of BWIA will be asked to make immediate changes to the company’s management. The management of BWIA has to be restructured with immediate effect as a condition of the Government’s further funding of the airline,” the Prime Minister declared. Asked if this meant the imminent dismissal of BWIA CEO Conrad Aleong, Manning said “this is not a personal thing” and that was a matter for BWIA’s Board of Directors. Recalling plans to form a regional airline from a BWIA-Liat merger, Manning reiterated that BWIA was not viable in its present form, but regional governments were prepared to purchase shares in a viable regional airline that emerges from the two carriers. He was confident that BWIA would see profits over the next four months to offset its debts and reminded reporters that the nation’s 60-year confidence in BWIA would not be eroded in a mere four months and he would continue to fly on BWIA.

Manning dismissed suggestions that Government would seek controlling interest in BWIA, adding that such a scenario would be temporary, if it arose. The PM said while BWIA and Caroni (1975 Limited’s current financial situations affected Government’s budgetary projections slightly, the local economy could handle such “temporary aberrations.” Reminded about his previous statements that Government seemed prepared to wash its hands of BWIA, Manning said while there were many ways that an airline could fold, he was  optimistic that “a brand new BWIA Limited 2003” would emerge at day’s end. The PM said BWIA’s current situation could accelerate the introduction of Chapter 11 legislation in Trinidad and Tobago and he had no evidence of questionable activity at Tobago Express.  Rowley said forensic auditing firm Zwaig International is assisting in BWIA’s financial review, and could be paid up to US$25,000 for its work thus far. Zwaig is continuing investigations into the InnCogen deal.