Bye-bye, BWIA.
After 66 years of
operation, British West Indies Airways will shut down on Dec. 31
and will be replaced in January by a new carrier, Caribbean
Airlines.
Caribbean
Airlines, like BWIA, will serve as the national carrier of Trinidad
and Tobago.
Peter Davies,
BWIA's CEO, will serve as the top executive at the new
airline.
Cash-strapped
BWIA had unsuccessfully attempted multiple recoveries over the past
10 years, but Davies, who was hired in March in an attempt to
resuscitate the airline, said that a shutdown and fresh start were
necessary when BWIA's four labor unions balked at concessions in
the latest restructuring plan.
BWIA lost $26
million last year and had posted losses of $1 million or more each
month this year. The government of Trinidad and Tobago, which was a
97.2% shareholder in BWIA, reluctantly appropriated $250 million in
July 2005 to help restructure the troubled airline and stem the
losses by eliminating nonprofitable routes, reducing fleet size,
cutting staff and improving technology.
A large chunk of
that appropriation will now be used to strengthen BWIA's balance
sheet, according to Davies, so that Caribbean Airlines will take
off with a clean financial slate.
The decision to
shut down BWIA came at a Sept. 7 cabinet session, although BWIA's
1,800 employees and its four major unions had an inkling of what
was to come six months ago when new business proposals were turned
over to cabinet members for discussion by a 10-member ministerial
team.
"When we could
not get the union settlements in terms of what we could actually
afford, I had to go back to the board and say that the original
business plan was now null and void," Davies said. "My
recommendation was that we close BWIA -- not an easy decision for
me to come to."
Sahfeek
Sultan-Khan, BWIA's legal/management consultant, said that the
decision to shut down BWIA and establish a new carrier had been a
unanimous one on the part of the government and the BWIA board of
directors.
Sultan-Khan said
that BWIA's assets, including aircraft and aircraft leases, will be
transferred to the new company.
Employees will be
offered separation packages and can apply for jobs with Caribbean
Airlines at a new salary structure and under new labor
contracts.
Like BWIA,
Caribbean Airlines is expected to offer regional service within the
Caribbean and between the Caribbean and New York, Washington,
Miami, Toronto and London.
Davies hinted
that unprofitable routes would be dumped and that the new carrier
would concentrate on niche markets, although he did not specify
which ones.
"BWIA will
continue uninterrupted service while management ensures a seamless
transition to Caribbean Airlines," Davies said.
He noted that the
new carrier will honor tickets already purchased on BWIA and that
BWIA frequent-flyer miles will transfer to the new airline's
loyalty program.
To contact reporter Gay Nagle Myers, send e-mail to [email protected].