Minister in the Ministry of Finance Conard Enill made this announcement in Parliament yesterday, when he replied to a private motion by Nariva MP Harry Partap requesting the Government to explain its decision to close BWIA.

“The plan foresees a reduction in staff requirements from approximately 1,800 to 800,” Enill said. Enill revealed BWIA’s closure would cost $2 billion (US$359 million), from which $300 million (US$50 million) will go to Caribbean Airlines Ltd (CAL) in 2007. CAL, he noted, would be a no-frills, low cost, high efficiency airline. The staff cuts, he said, would come through reduced operations, efficiency improvement, and outsourcing to specialist providers.

He said the $2 billion would be used to “terminate the employment contracts of all BWIA staff, settle all bona fide liabilities, restructure the existing infrastructure, and commence the operations of the new airline.”

Enill gave a breakdown.

The main items were VSEP - US$96 million (TT$604 millon); working capital (to cover BWIA’s losses to the end of December) - US$27 million (TT$170 million); debt reduction (to settle existing debt) - US$51 million (TT$321 million); funds to close BWIA’s balance sheet (liabilities and working capital) - US$67 million (TT$422 million); retention of key transition personnel in CAL - US$13 million (TT$82 million) ; re-engineering IT systems - US$21 million (TT$132 million); funds to re-deliver the A30, A340 and A737 aircraft - US$15 million (TT$94 million); and working capital to support future operations of CAL - US$50 million (TT$315 million).

The $2 billion would come from the Consolidated Fund, he said.

Enill remarked that since 1995 the Government has spent $3 billion subsidising BWIA.

He said the TT to Heathrow (London) route is unprofitable for BWIA because most passengers originate in the UK and fly only to Barbados. Enill said the new carrier would take UK-bound passengers only as far as Barbados, after which CAL’s new partner, British Airways, would complete the long haul to Gatwick-London Airport. He admitted CAL will lose BWIA’s landing rights for Heathrow which exist on a “use it or lose it” basis.

Enill said CAL would service Miami, Toronto, New York, Kingston (Jamaica), Georgetown (Guyana), Paramaribo (Suriname), St Martin and Antigua. BWIA is due to be replaced by CAL on January 1, 2007. Regarding the staffing, Enill was optimistic that both the outsourcing of services and the re-employment of ex-staff would be readily available in TT.

Enill said all local and foreign trade unions have signed supplemental agreements, and the airline management has agreed to resolve all outstanding union grievances.

“Supplemental agreements have not been registered in the Industrial Court, with both the unions and BWIA basically aligned in the challenge against the current court ruling. BWIA has appealed the judgement of the Court of Appeal.”

Enill said US unions had found BWIA’s severance offer to its US staff to be very generous, but added that BWIA thought it inappropriate to use taxpayers’ money to offer them the same terms and conditions as TT employees.

Source: newsday.co.tt