WHITHER BWIA?

The country was entitled to believe that when Prime Minister Patrick Manning demanded in December that BWIA’s Board should come up with a strategic plan for the airline within one month and called upon the national carrier to “shape up or ship out,” that he viewed the matter with a sense of urgency. It may have been that the Board had not taken his implied threat seriously or maybe it believed that preparing a long term viability plan required more study than the month the Prime Minister gave would have afforded. Whatever the reason the requested strategic plan was never handed over to Minister of Trade and Industry, Ken Valley, until February 1, almost two months later.

A restructuring plan for the airline was submitted on January 11 to Valley by BWIA’s Chairman, Anthony Jacelon, and Chief Executive Officer, Nelson Tom Yew, but as Minister Valley explained last week what he had received then had not been “a Board approved report.” The “Board approved report” was presented last week Tuesday. Manning’s request for a strategic plan for BWIA had followed complaints by the airline’s passengers of constant delays, cancellations and loss of luggage. Government, a minority shareholder in BWIA, after having privatised the carrier in 1995, had within recent times bailed out the loss leaning airline giving the Government, in effect, a new controlling interest in BWIA. The Prime Minister’s warning to BWIA to “shape up or ship out” and his demand for a strategic plan for restructuring was inevitable given the taxpayer interest in the airline.

Oddly enough, Valley has argued that the problems experienced by BWIA at the height of the current passenger peak period had resulted from the airline’s thriving business. “The fact that BWIA has had to lease aircraft,” he argued, “can only suggest that more people are flying with the national carrier,” What Valley has ignored is that BWIA’s passenger traffic has not had the desired influence on the bottom line. His argument is in conflict with the standard position of major players in the international airline industry that the after effects of the September 11, 2001 attacks on New York’s World Trade Centre, have impacted adversely on air travel. As a result airlines have had to slash fares in order to be competitive. In addition, the high cost of aviation fuel, following on the rise in international crude oil prices, has had a tremendously negative effect on the ability of airlines to be profitable.

Several airlines the world over have either collapsed, are on the verge of bankruptcy or have received Goverment grants in order to survive. The financial assistance provided BWIA West Indies Airways by the Government of Trinidad and Tobago has allowed the airline to clear its debts. The question remains, however, how much longer can taxpayers’ funds be expected to be used to bail out BWIA? Already, Air Jamaica, the other leading regional airline with overseas routes, has had to reduce staff levels as well as cut back on the salaries and wages of staff it has retained in an effort to combat rising costs and debts. BWIA which has already reduced employee levels through VSEP may need to consider additional tough measures if it is to avoid further requests for bailout by Government. The alternative may be unpleasant.