BWIA OperationsCuts Could Hit Caribbean
Pressed by continuously falling passengerair loads the premiere Caribbean airline, BWIA, has announcedausterity measures which include staff cuts, flight reductions,and a cutback on commission paid to travel agents.
Additionally, in these plans which couldsend reverberations throughout the region, BWIA will be returningtwo leased MD83 aircraft.
News of the airline's belt-tightening cameMonday, 21 January, during a press conference called by its PresidentConrad Aleong when he indicated that the slash in staff will beat every level and in all territories where it has operations.
"No one department is sacred. No onedestination is sacred. It's not just Trinidad and Tobago, it'severywhere we fly," Aleong said in the Trinidad capital,Port-of-Spain.
"We took a wage freeze last year andwe asked the workers to do the same and with this fall out ifthere is a need to reduce the management or to cut cost in ourforeign operations we will do it. There will be cost cutting acrossthe board." Aleong said.
BWIA has for years been reporting low profitsor losses but the company's position now is that it continuesto suffer from fallout of the 11 September terrorist attack onAmerica which has a resulted in a reluctance by many persons totravel by air.
BWIA suffered a 10 per cent reduction inpassengers in October and that figure plunged to 23 per cent inNovember. Christmas traffic was 15 per cent below what it shouldbe at that time of year and the February boon period of Carnivalis predicted to also see 15 per cent reduction.
Mr Aleong was unable to say the number ofemployees who may be put on the breadline but could only assurethat some staff had to go home if the airline was to dodge a US$30million loss forecast for its next fiscal year if operations continuedas they are.
"If anything we took too long to moveto cut employee cost because the US$9 million profit we made upto the third quarter of last year was gone by November due tothe fall in passengers;" Aleong said.
The staff overhead that BWIA labours underwas clearly illustrated when Mr Aleong said that the company spendsUD$700,000 to operate daily, and of that amount US$200,000 goesto paying employees.
Understandably he described a UD$1.3 millionbail-out package given to the company by the Trinidad and Tobagogovernment after the 11 September disaster as a drop in the bucket.
BWIA plans to cut back commission to travelagents from nine to six per cent and this promises to deal a nearcrippling blow through an already ailing sub-sector within theairline industry.
Some two years ago when the major airlinesflying into the Caribbean made a similar cut to their commissionBWIA held fast with its rates and travel agents declared it thesaviour of their operations.
"It's cutting our commission by 331/3 effective February 15 after promising [travel] agents thatthey were not going to have any changes," the Barbados pressreported Janette Greaves, Managing Director of Gems Travel andTours, saying.
"We have swayed a lot of people totravel on BWIA but now they are on the same playing field. Weknew it [reduction] would eventually come but not at this time,"said an official of another Barbados local travel agency, St JamesTravel.
"The nine per cent was an incentiveto push BeeWee. A lot of us are pro-Caribbean," the representativeadded.
Another operator said profit margins werealready thin and the blow from the BWIA announcement will be felteven harder because it is coupled with poor business coming outof the UK and North America.
"I don't know how much more I can sliceand cut. It's a tremendous blow when you are at your worst,"said Ann Butcher of Butcher Travel Tours.
But, in announcing his company's rationingMr Aleong said: "Why should we be paying nine per cent incommission when American Airlines is paying six per cent?"
As the airline seeks to adjust itself forcontinued rough times there may however be added turbulence, comingthis time on the industrial front.
Curtis John, President of the Aviation Communicationand Allied Workers' Union reportedly said last week that BWIAdid not need to reduce staff.
A hopeful Aleong said if the unions recommendpay cuts the airline would look at this option.