Sep 2006 Financial News

NEW AIRLINE TO REPLACE BWIA

Sep 04, 2006

BWIA is to be closed down and replaced with a new airline next year. Closure of the 66-year-old airline was confirmed by sources close to the Government, who revealed BWIA would be shut down when its replacement, Caribbean Airlines, begins operations next year.

Mass retrenchment, of close to 1,000 employees, the trimming of the fleet and the suspension of several routes, are expected to follow the airline’s shutdown.

Despite the company’s denials of the impending shutdown, Curtis John, president of the Aviation, Communication and Allied Workers’ Union (Acawu), said the new airline had already been registered. “We have not received official information from the company, but we have received information that BWIA would be shut down and a new airline would take its place.” He said the announcement should have taken place on Friday at a meeting the company called with BWIA’s unions.

The meeting, scheduled to take place at Crowne Plaza hotel in Port-of-Spain, was cancelled late on Thursday evening. John said no reason was given for the cancellation. “Apparently they did not have everything in order,” he speculated during an interview yesterday.

While BWIA officials said there was no truth to what they described as rumours of a permanent closure, John said there had been signs of drastic changes ahead for the airline. One of the changes was the hiring of a organisational psychologist and implementation of two telephone hotlines. “They have set up a hotline through the information technology department for counselling and another for media releases,” John revealed.

He also said the security arrangements at Sunjet House had been changed and the staff of an air service company were being trained to take over the check-in function, now handled by BWIA staff at Piarco. “Based on the fact that all these things are in place, something drastic is happening.”

John said he would not be surprised if more than 1,000 people were retrenched from BWIA’s local staff of 1,700-plus. Among the areas John identified to fall under the hatchet were administration, maintenance and engineering. “It is possible they will just keep overnight checks and gas and oil service. They will get rid of C and D checks and do that outside,” John added.

Earlier this year, BWIA’s Welsh chief executive officer Peter Davies hinted at substantial staff reductions, saying the airline had more staff than it needed.

Speaking at a staff seminar at Crowne Plaza in April, Davies also outlined several areas where the company could be more efficient, including reservations.

Sources said the reservations and revenue accounting departments were likely to be outsourced if BWIA was closed down. John also said the airline’s fleet would be reduced by three aircraft—two 737s and one A-340—which would affect several routes, including the profitable London route.

“The London route contributes to 40 per cent of BWIA’s revenues, and they have taken the decision to cut down the route,” John claimed. This, he said, would pave the way for other airlines, like Virgin Atlantic, to make healthy profits. “Virgin Atlantic has been behind that route and will take up the slack,” he said. There has been speculation in the past that founder of Virgin Airlines Sir Richard Branson was making a bid for BWIA, after his frequent visits to T&T and meetings with senior public officials.

John said his union was waiting on the company’s next move before deciding on the next step. He was critical, however, of the Government if it allowed BWIA to be shut down. “The Government of T&T does not care about the people. In a time when T&T had so much money, they are selling out the people’s patrimony. “It is ridiculous for the Government to allow things like this to happen to bring in foreigners to put out locals.”

Contacted last night, Dionne Ligoure, BWIA’s corporate communications manager, said she had no information regarding the airline’s closure. “All I can say is the company and union are due to meet to discuss the future of the company.”

Responding to John’s allegations of a reduction of the fleet, Ligoure said she did not know where he got that information. “There are leases, but I am not in a position to know when the leases are due to end.” She said she was not aware of any counselling hotlines.

Contacted last night for comment, Trade and Industry Minister Kenneth Valley referred all queries to Information Minister Dr Lenny Saith.


Source:
The Trinidad Guardian
Sunday 3rd September, 2006.

http://www.guardian.co.tt/archives/2006-09-03/news3.html