DOMA ON BWIA

Our national airline, BWIA, never seems able to fly out of the crisis mode. In recent days it has seen its aircraft seized in an overseas port for failure to meet its financial obligations. Once again the Government has had to intervene and negotiate with the US lessors to give BWIA time to meet its obligations. In the end, of course, it means that the taxpayer will pay the price.

Now we have a comment from the Downtown Owners and Merchants Association [DOMA] that no price tag could be placed on the importance of BWIA West Indies Airways to Trinidad and Tobago. Was this a hint that its members would seek to go to the rescue of the airline by investing in it? DOMA’s stand that BWIA should be preserved, because it is an icon of our national pride, is not without merit. While we are of the view that a serious attempt should be made to the saving of BWIA, yet any move to rescue the beleagured airline will have to accommodate the uncomfortable truth that BWIA is troubled by a debt of US$100 million. How was it possible for the regional airline to have amassed such a relatively huge debt, when in the three years immediately prior to the September 11, 2001 tragedy, which rocked the international airline industry, it had announced reassuringly healthy net profits, including a net profit in 1998 of US$9.1 million?

Admittedly, charter proliferation and an increased fuel bill in 1999 and the following years, the result of a sharp rise in international crude oil prices, had somewhat dented the airline’s management’s confident talk of sustained profitability. Today’s debt of US$100 million is far removed from the announced net profits of 1998-2000. And if management trumpeted the turnaround then, today it must be prepared to accept some responsibility for the decline, September 11 notwithstanding. A not insubstantial portion of this debt is owed to the International Lease Finance Corporation [ILFC], which recently impounded two of the aircraft it had leased to BWIA, because several millions of dollars in payments had not been met. Last week Government called in the lessor company for talks which it clearly hoped would stave off the seizure of BWIA’s remaining aircraft through a threatened enforcing of a court order obtained by ILFC in the United States.

The seizure of the two planes had taken by surprise many persons, who had believed that BWIA, which had spoken of fleet renewal in 1998, had owned the Boeing 737-800 Next Generation aircraft or had been in the process of paying off for them. But whether the discussions sought by Government were an indication that the Administration was preparing to shift from its earlier stand that it did not intend to seek either a controlling interest or outright ownership in BWIA is unclear. DOMA’s point that BWIA was an indigenous part of Trinidad and Tobago’s future makes nice reading, yet any acquisition of majority shareholding in BWIA must, inevitably, embrace the US$100 million debt referred to earlier. Undoubtedly, a large portion of the debt will be allowed to run its course of pre-agreed upon payments once creditors are convinced that their monies are not under threat. A critical factor in any resurgence of BWIA must be a commitment by the Governments of Eastern Caribbean countries to name the airline as the regional carrier. The English speaking Caribbean, or rather the bulk of it, can no longer insist on BWIA serving their interests through the provision of services, which facilitate them at this country’s public and private sector expense. Another is on the question of management. A third is the investing of more funds into the airline by the private sector, including DOMA. If DOMA regards BWIA as essential it must encourage private investors to put their money where their mouth is.