GOVERNMENT AND BWIA

Government, even as it seeks to keep BWIA West Indies Airways in the air, nonetheless should stop short of re-acquiring majority shareholding control of the airline despite the claim by the National Trade Union Centre (NATUC) that it was in the best interest of the people of Trinidad and Tobago. Unfortunately NATUC has not advanced any arguments to support its statement. BWIA lost hundreds of millions of dollars of taxpayers’ money between November, 1961, when it was acquired by Government from then British Overseas Corporation, and February, 1995 when Government privatised the airline, while maintaining a 33.5 per- cent interest.            

And although the airline recorded net profits in the late 1990s — US$9.1 million in 1998 and US$3.7 million the following year — there is little indication that the airline, whose balance sheet has been adversely affected by a proliferation of charters and the backlash of September 11, 2001, will return in the near future to the profitability position it enjoyed then. Particularly, as a third factor crept into the equation five years ago, that of high fuel prices, provoked by the sharp increase in international prices for crude. In turn, following on the September 11, 2001 suicide bomber attacks on New York’s World Trade Centre, while they were not responsible for the initial proliferation of charters, this nonetheless aggravated the situation in which BWIA found itself vis a vis the charters.

Several United States of America airlines either filed for bankruptcy, went out of business or sharply scaled down their operations. This has led to the mothballing of scores of American aircraft and the loss of jobs by several US pilots and aircraft crews. Some of these aircraft have been leased and many pilots and crews, who had been adversely affected by the September 11 backlash have been hired to fly them, several at salaries somewhat below what they had obtained previously. Government’s intervention with respect to BWIA need not necessarily be seen as limited either to putting out money to guarantee the airline’s survival, nor to the seeking of majority shareholding. Instead, Government should be urged to study measures designed to protect BWIA, for example the imposition of special landing and other charges on aircraft operating special charters, as well as subsidising the aviation fuel BWIA purchases in Trinidad and Tobago.

Meanwhile, BWIA which was listed in February, 2001 on the Trinidad and Tobago Stock Exchange at $7.85 per share saw its share price slip on Thursday to an embarrassing low of 68 cents. Although, admittedly its initial $7.85 share offering appears on hindsight to have been overpriced Government should not be tempted by NATUC’s “best interest” claim. Will the trade union body, for example, consider recommending to unions representing workers at BWIA that their members should be prepared to accept pay cuts in addition to a retrenchment plan? The country has to recognise that the aviation industry has changed and that if BWIA is to compete then there must be an acceptance that a crucial part of the strategy must be salary and wage structures on par with those existing today in the foreign airline charter industry.

Caribbean countries, which today subsidise United States airlines that fly there, should in turn examine paying subsidies to BWIA as well. In addition, TIDCO should market, aggressively, Trinidad and Tobago as a preferred tourist destination and its goods and services to BWIA’s new Caribbean and Latin American routes. Something should be done to win more passengers and freight to BWIA’s aircraft servicing these routes, instead of having them fly there today with relatively few passengers and not much freight to show for it.