Trinidad cuts fuel subsidy for Caribbean Airlines

Trinidad cuts fuel subsidy for Caribbean Airlines

Already faced with heavy criticism across the region for its high ticket prices, regional carrier, Caribbean Airlines may be preparing for more financial turbulence as the Trinidad and Tobago Government has announced that it intends to discontinue the fuel subsidy that the airline currently enjoys.

Trinidad’s Finance Minister Larry Howai made the announcement on Wednesday afternoon during his budget presentation. Mr. Howai told the Trinidadian National Assembly that “effective October 1 2013, I propose to discontinue the fuel subsidy which the airline currently enjoys”.

The Finance Minister said Caribbean Airlines Limited must move towards the adoption of a financially sound business model for positioning the airline in targeted segments of the global tourism market. He added that “the new Board of Caribbean Airlines Limited has completed the first phase of a revised Business Plan for the airline to achieve financial viability”.

Mr. Howai said he has been assured by the Board of Caribbean Airlines Limited that the removal of the fuel subsidy will not impact on ticket pricing policy.

A number of international carriers have objected in the past to the fuel subsidy that the airline enjoyed. Several U.S airlines highlighted the fuel subsidy as unfair competition during a recent complaint to the U.S Department of Transportation.

The US carriers have objected to Caribbean Airlines and Fly Jamaica being granted permission to operate direct flights between New York and Guyana on the basis that both carriers are registered in countries other than Guyana.

Caribbean Airlines may have been preparing for the decision by the Trinidadian Government to discontinue the fuel subsidy.

During a visit to Guyana last week, Caribbean Airlines’ Corporate Communications Head, Clint Williams said the removal of the subsidy does not necessarily mean that ticket prices will increase. He said the airline could look at other variable costs attached to its service.

Caribbean Airline is currently the only airline serving the New York and Toronto routes from Guyana. Surinam Airways only serves the Miami market from Georgetown twice weekly.

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