CAL Barbados Route Discontinuation Focus of PAC Session

By Stuart Wilson

The Cayman Airways Ltd. (CAL) flight route to Barbados, which was introduced just 9 months ago on 18th October, 2032 and cancelled recently was the subject of the Public Accounts Committee hearing on 6th January.

During the session MPs heard from the CAL President and CEO Fabian Whorms, who noted that despite the route’s cancellation and any negative perception that has accompanied the development, the arrangement between the flagship carrier and the Barbados Government via its marketing subsidiary Barbados Tourism Marketing Inc (BTMI) was “Fantastic”.

Mr. Whorms said the Barbados route fit into CAL’s operation strategy by not compromising the rest of the service and noted that one of the caveats for the introduction of the route was that, “…..operating these flights should not in any way hinder any of our current service or our future plans.”

He added that the Barbados flights were schedule on days of the week when there was nothing else to do with the aircraft or its crews and putting the aircraft and staff to work on such days covered both variable costs and allocated costs.

“There’s nothing else we would have done with the aircraft or our crews,” he remarked, adding that, “Many of our rotes do not cover fully allocated costs.”

Mr. Whorms noted that the Barbados flights did not hinder any current services, nor future plans and explained that the decision to add the flights was basically a risk-free proposition for the airline and the contractual arrangements were structured to guarantee revenue and profit.

The CAL President and CEO said it was not a challenge for them to put the contract together in a way that was optimal/favourable.

“we have entered into much more sophisticated contractual arrangements than this one.

“So it was not a challenge for us to put in place the terms that we wanted,” he said, explaining that the flight essentially operated like a charter and that the revenue comes from both tickets sales, as well as a top-up from BTMI should the numbers of the former fall short, because of the guaranteed profit margin built into the contract.

“We have made a level of profit from this venture which assures us that if we find ourselves in a situation where we need to go to the Cayman Islands government  and say we have a shortfall that we need to bridge, for whatever reason for this fiscal year, we know that that number is now going to be so much smaller because we can apply the profits that was earned from this,” said Mr. Whorms.

At the time of the launch of the route, Tourism Minister, the Honourable Kenneth Bryan, had noted that the introduction of the Barbados route would offer cost-effective flights that significantly enhance the convenience of travel overall to, and within, the Caribbean, adding that financial commitment from Barbados Tourism Marketing Inc. (BTMI) to back the Cayman Airways service was crucial in making a Barbados route a reality.

The Honourable Minster spoke exclusively with the Caymanian Times about the route and its benefits, as well as the reasons for its termination.

“This is as a result of the Opposition playing politics and creating bad press. There were many benefits included in this package. We have now tossed loss of possible medical tourism revenue, regional leisure opportunities and marketing opportunities,” noted the Minister.

He added that the flight, which essentially operated as a charter for Barbados - giving them access to the Western United States - was something that was initiated at the very top of the Barbados Government and the country’s Primer Minister Mia Mottley was instrumental in making the route a reality.

“The cost of the flight was covered by Barbados to whatever extent there was a shortfall in revenue from tickets and the room tax, as well as other benefits to the local economy in Cayman meant that this was an economic accelerator for us,” said Minister Bryan, who explained that the initial agreement was for one year, with a 2 month notice, ‘opt-out clause’. 

He said the arrangement was a ‘sweet deal for Cayman’ and, “……we have to put our planes and personnel to use in the most strategic way,” noting that his Ministry would continue to seek the best opportunities for Cayman, despite the setback.

In addition to providing nonstop service to and from Barbados, the service had been timed to provide convenient connections to the Eastern Caribbean and Europe via the many carriers that fly to the Grantley Adams International Airport in Barbados.

Convenient connections via Grand Cayman to Los Angeles, effectively linking the West Coast of the United States with the Eastern Caribbean was another goal of the service, in addition to synchronizing the flight schedule to align with other Cayman Airways destinations.

The expanded connectivity was expected to usher in fresh opportunities for business travel, tourism, and cultural exchange, further enhancing regional ties.

The early-bird flight marked the third new route of the Cayman Islands’ national Carrier in one year, with Panama and Los Angeles routes also launched in 2023.

When asked whether he agreed that the discontinuation of the Barbados Rout to Grand Cayman was not due to financial concerns and lack of business Opposition Leader and former Chairman of the Board for Cayman Airways, the Honourable Roy McTaggart said, “Without seeing any numbers it is difficult to really form a view.

“The CEO did ofter the share the numbers with the PAC privately. However the PAC is all about transparency and openness.”