FOR MORE than 60 years, BWIA has made an invaluable contribution
to regional aviation by carrying millions of passengers
to and from destinations in the Caribbean, North America
and Europe safely and with warmth.
Regrettably, the airline has not been able to combine the
attributes of safety and warmth with the cold reality of
profits on any sustained basis.
Many airlines in the world have faced serious problems recently:
escalating aviation fuel prices have burdened expenditure
while the cut-throat competitive scramble for travellers
has forced a reduction in fares.
In addition to these significant problems, BWIA has received
conflicting signals from its main stakeholder, the State,
such that if the Government were an air traffic controller
the airline would have been doomed to crash.
First the Government wanted Latin American routes, and then
The Prime Minister says that the airline could be shut down
one week and the next week the Minister of Trade says the
airlines future is bright.
The Government speaks about setting up a holding company
to merge Liat and BWIA in one breath and in the next breath
is giving millions to support Liat and BWIA as separate
BWIA itself has received hundreds of millions of taxpayer
dollars in the last three years since the airlines
fortunes took a turn for the worse after the September 2001
terrorist attacks in the US.
The fact is the Government has wrung its collective hands
endlessly over the airlines future and has had the
benefit of a number of reports on BWIA.
This year alone, there has been a report on the airlines
future which came from the airlines board. That report
was referred to one Cabinet sub-committee, which deliberated
on it for months. It was then referred to a second Cabinet
sub-committee which did some more deliberations.
Not being able to come to a conclusion, Cabinet decided
the issue of the airlines future deserved even more
study and appointed a task force headed by one of this countrys
most prominent businessmen, Arthur Lok Jack.
The task force was given terms of reference which included
three options: the closure of the airline, with no replacement
by a state-owned air transport company; the closure of BWIA,
with the establishment of a new airline which could be wholly
or partly state-owned; and the restructuring of the airline.
All of the options studied by the task force come with a
large bill attached:
The closure of the airline will cost between US$170 million
and US$350 million (between $1.1 billion and $2.2 billion).
The establishment of a new airline is estimated to cost
more than US$350 million ($2.2 billion).
The restructuring of the airline has a price tag of US$250
million ($1.5 billion).
In all cases, the cost of implementing any of the options
would fall on local taxpayers, given that the State now
holds over 75 per cent of BWIAs shareholding.
While the Government may think it appropriate to undertake
such an expenditure, it should only do so after the appropriate
Also, a decision on the airlines future should only
come after the Cabinet has considered one other option:
selling the airlines assets to a new entity.
While there may be temporary dislocation and inconvenience
to the travelling public in the form of higher air fares,
this can be quickly mitigated by the encouragement of competition
on some of the routes most favoured by T&T businessmen,
leisure travellers and students.
The sale of the airlines assets would reduce the estimated
$2 billion it would cost to close down the airline and special
arrangements could be put into the sales agreement if necessary.
It should be noted that Barbados, one of the regions
most successful tourist destinations, does not have a national
carrier. Neither do any of the other tourist countries in
the region except Jamaicawhose government is facing
much the same concerns as T&Ts.