Port of Spain, June 21, 2021. Caribbean Airlines today announced its unaudited financial results for the first quarter of 2021, recording a loss of TT$172.7m () 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.
