Caribbean Airlines is expected to send home a quarter of its employees across its regional and international network—some 450 workers in total.

The company made the disclosure in an official statement released today, in which it revealed losses of some TT$172.7m (US$25.7m) and a 75% decline in revenue, for the first quarter of 2021.

CAL says the retrenchment is necessary, in order to help the company survive in the short to medium term, notwithstanding current moves to reopen T&T’s borders and facilitate international travel, once more.

“After implementing several short-term measures to stabilize the airline, regrettably, the Company is now left with no choice but to undertake further solutions based on its existing needs,” the company’s release explains.  “Even with the pending re-opening of the borders of Trinidad and Tobago, travel demand is not expected to be the same as pre-COVID and current passenger demand is not going to recover sufficiently to support the existing company structure.”

“In order to survive in the short to medium term, the company has to decrease the aircraft fleet to match reduced passenger demand among other initiatives. The decrease in the aircraft fleet will result in surplus labour. Surplus labour is the reason for the proposed retrenchment exercise,” the company says.

CAL will be meeting with its employees and other stakeholders to discuss the best way to carry out the downsizing exercise and says arrangements have been made to provide assistance to employees via its Employee Assistance Programme (EAP). 

“The Company takes its duty of care seriously and has ensured that support is in place for persons needing assistance,” CAL says noting that these will not be temporary layoffs, but a termination of surplus labour.

“In terms of employees, the airline has determined that 25 per cent of its workforce or about 450 positions throughout its network is surplus to its current needs,” the company says. 

It adds: “A retrenchment is a termination of employment for reason of redundancy, that is surplus labour, while a temporary lay-off is a temporary suspension of the employment contract, but without termination of employment.”

According to CAL, its current flights and cargo operations would not be affected by the changes.

“These measures will not affect flights, cargo operations or the quality of service, safety and customer care that customers expect,” the company assures.

The following is the full text of the statement released by CAL, today:

CARIBBEAN AIRLINES FIRST QUARTER RESULTS AND STRATEGIC RESTRUCTURE

Port of Spain, Trinidad & Tobago, June 21, 2021. Caribbean Airlines today announced its unaudited financial results for the first quarter of 2021, recording a loss of TT$172.7m (US$25.7m) and a 75% decline in revenue, compared to the same period in 2020.

The losses follow a similar downturn in 2020, which saw an operating loss of TT$738m (US$109.2m) compared to operating profits for 2018 and 2019. Since the beginning of the COVID-19 pandemic and the suspension of operations at its base in Trinidad and Tobago, the airline has seen passenger numbers plummet, and flight numbers reduced to less than 10% of normal operations.

Despite this, the airline continued to offer services on many of its routes and provided invaluable repatriation flights for Caribbean citizens. Given the financial impact of the pandemic, Caribbean Airlines proactively reduced costs, and Q1 2021 expenses are down 52% compared to the same period in 2020. Further, the airline was kept afloat through a government guaranteed loan and a cash injection by the Government of Trinidad and Tobago totalling US$100 million.

The announcement that the borders of Trinidad and Tobago may soon reopen is welcome news, but all forecasts suggest that the recommencement of travel will not be in the same volumes as they were pre-COVID. Therefore, until air travel regains its pre-COVID momentum the airline will need to adjust its operations to cater for a reduced scale of demand after the opening of the borders. Put simply, passenger demand in the short to medium term is not going to recover sufficiently to support the existing company structure after the reopening of the borders.

As a consequence, Caribbean Airlines is required to take further steps to ensure it has a sustainable business model for 2021 and beyond. These steps include major cost reductions in all areas of the airline’s operations, specifically its human resource complement, its fleet and other assets, and its route network.

As part of the streamlining strategy, the number of jets in the fleet will be reduced, for the time being, over the course of 2021. Its route network will also be adjusted to reflect the changing market.

In terms of employees, the airline has determined that 25% of its workforce or about 450 positions throughout its network is surplus to its current needs. The Company will embark on consultation with the employees and other stakeholders, with respect to treating with this surplus labour situation.

Caribbean Airlines passenger and cargo services continue to operate, with all the latest flight details available on www.caribbean-airlines.com. The airline thanks its valued customers for their continued support.