The new board of Cayman Airways is to reduce the airline’s expenditure by doing a full cost identification and evaluation and it will make the results known to the public, according to Director and CEO Michael Adam.
In fact, the board is going off on retreat to Fort Lauderdale this week to determine the way forward for Cayman Airways and to reassess the model of the airline.
‘The major carriers are all losing money so Cayman is not unique. We have to simplify business and chase revenue opportunities that exist and increase our revenue,’ said Mr. Adam. ‘We need to attain clarity of purpose and identify areas where CAL can improve sustainability,’ he said.
‘It will be a challenge but this is something all carriers are doing now and it is possible that we can achieve sustainability in identifying its true role.’ He added that they need to look very closely at some services the airline does at the request of and support of other agencies. Mr. Adam pointed out that some costs cannot be reflected as a loss because the services they provide are of premium importance.
In this, its 37th anniversary, Mr. Adam believes that the airline’s biggest challenge to date has been dealing with the aftermath of Hurricane Ivan when it was the only carrier with a physical presence in Cayman and organised a mass evacuation with huge success, lifting thousands of people off the battered Grand Cayman.
The airline’s biggest achievement, he believes, was the doubling of its route structure in a period of 18 months during 2003 and 2004 when it introduced a new route to Boston in November 2004 and before that Chicago, Havana, Montego Bay and the Cayman Express flights from Grand Cayman to Little Cayman and Cayman Brac.
Cayman Airways was formed in 1968 and was 49 per cent owned by LACSA of Costa Rica until 1977 when the Cayman Islands government took over control of it. Initially the airline linked the three Cayman Islands until 1972 when it launched its first route, Miami.
Today the company operates a total fleet of seven aircraft, including three 737-200 aircraft, two 737-300 and two Twin Otter turbo props. The US gateways served include Miami, Fort Lauderdale, Tampa, Houston and Chicago with regional connections to Cayman Brac and Little Cayman, Havana, Cuba, Montego Bay and Kingston, Jamaica. Summer seasonal service to Orlando is offered. Seasonal service to Boston, Massachusetts is also offered. The company has a staff of roughly 320 people
Fuel costs rising
One of the airline’s biggest challenges currently is the high cost of fuel affecting the global economy.
‘There doesn’t seem to be a ceiling on this,’ explained Mr. Adam. ‘Crude oil is projected to reach US$80 a barrel before it begins to level off,’ he said.
Cayman Airways’ fuel bill has tripled in the past two years, exceeding its salary expenses.
An economic impact study that was carried out on Cayman Airways a couple of years ago had findings showing that CAL generated 12.9 per cent or the equivalent of $236 million to annual GDP. However, to put these figures against the annual Government subsidy of $7 million shows an amazing return on investment.
Currently it is high season for Cayman Airways, because of the local market of travel and the response to the airline’s anniversary sale, has, as usual, been fantastic, said Mr. Adam.
Ninety per cent of the airline’s revenue base is given by the Miami and Jamaica routes while the others support tourism growth.
‘We’re a legacy low fare airline and we are price leaders into Cayman,’ said Mr. Adam. ‘We purposely make the fares low to make the destination attractive to visitors and this has proved to be successful,’ he said. The airline operates certain routes requested by the Department of Tourism.
‘It’s a tool to support the local economy and it assures continuity of air travel as we’ve seen competition come and go,’ he said.
But the airline also plays an infrastructural role in Cayman. ‘The Cayman Express builds an air bridge to the other islands and other flights are an economic lever from US cities,’ he said.
The fact that Cayman Airways can offer airlift in case of a hurricane can not have a price put on it, said Mr. Adam, who agreed that many local people now understand the benefits of having a national airline following Hurricane Ivan. ‘It most definitely exposed the benefit of having a national airline,’ he said.
Another achievement for this year was that Mr. Adam was granted Queen’s Birthday Honours 2005 for services to aviation and the community during and after Hurricane Ivan. He was named a Member of the British Empire (MBE), announced by Governor Bruce Dinwiddy at the Queen’s Birthday Honours Parade recently.
CAL board of directors
Minister for Tourism, Environment, Investment and Commerce Charles Clifford; Mr. Robert ‘Bobby’ Bodden (Chairman of the Board); Mrs. Patricia Estwick; Mr. Johnny Brown; Mr. Moses Kirkconnell; Mr. Ian Wight; Mr. Dax Basdeo; Mrs. Angelyn Hernandez; Ms. Pilar Bush; Mr. George Hunter; Mr. Timothy Hubbell; Mrs. Sonia McLaughlin; Mr. Nathaniel Tibbetts; Mr. Michael Adam; Mrs. Gloria McField-Nixon (Secretary) and Ms. Yvette McLaughlin (Assistant Secretary).