High fuel prices are causing the national flag carrier Cayman Airways to look a little harder at the possibility of introducing new routes to Central America.
‘It continues to be a very difficult time in the airline industry. We have to consider very carefully before taking on any new routes,’ said VP Sales and Marketing for Cayman Airways, Richard Blake.
Although still in the process of looking into the possibility of new routes to four potential destinations – Honduras, Belize, Costa Rica and Panama – the airline now needs to assess what the optimum time would be to enter into such a commitment, said Vice President Sales and Marketing Rick Blake.
Mr. Blake said this process is still ongoing and there was never any sense of urgency with bringing new flights on board.
Of the four possible destinations Costa Rica and Panama are the two that require specific Government approval.
‘These two are the most time consuming in terms of seeing which or if any of the four destinations we may take on,’ he said.
With the continued price of fuel, Mr. Blake asserted, what needs to be ascertained is if it is the right thing to do right now.
‘No new routes are guarantees and any new route is an investment,’ he said.
With regard to soaring fuel prices, Mr. Blake described them as unpredictable.
Oil prices have been highly volatile in recent years, but the sharp rise late in 2004 really hit the airline industry. Prices rocketed past $55 a barrel in October, a huge increase from the roughly $30 a barrel during the same month a year earlier.
US light crude was at about US$53.65 a barrel late last week, after falling to a low of US$53, more than US$5 from the all-time peak at US$58.28 struck earlier this month. Some media reports indicate that oil prices have eased from record peaks because of signs that higher energy costs and rising US interest rates are starting to dampen a surge in economic growth which last year fuelled the fastest rise in consumption for a generation.
Meanwhile, Delta Air Lines reported a huge first-quarter loss for this year – more than $1 billion – when it was hampered by high fuel costs. This was triple last year’s equivalent of $387 million.
Northwest Airlines, the fourth biggest domestic carrier, said its first-quarter loss nearly doubled, to $458 million, from $230 million, for the same period last year.