CAL audit shows deficiencies

The efficiency audit recently conducted by Lufthansa Consulting on Cayman Airways found several high-level deficiencies, Minister of Tourism Charles Clifford said Friday.

The audit, which commenced 16 May and ended on schedule 22 June, was originally intended to review six key components of the airline’s operations – human resources; information technology; marketing and sales; route planning and scheduling; operations; and purchasing and supply chain,

However, Mr. Clifford said the audit was expanded to include three other components: finance; ground handling; and marketing, promotion, product and brand.

Mr. Clifford highlighted one of the most glaring deficiencies found during the audit:

‘A lack of a proper company strategy and business plan, which forecasts beyond one financial year,’ he said. ‘Such a plan is necessary in order to make key decisions on matters such as optimal routes, fleet and market potential.’

Mr. Clifford said Lufthansa Consulting did not make any recommendations with regard to CAL’s fleet size or serviced routes.

‘The auditor found, and I agree with them, that it would be improper to consider issues like fleet size or routes without a strategic business plan in place,’ he said ‘That would be like putting the cart before the horse.’

Lufthansa Consulting did prepare a 1,011-page report that recommended 49 action plans, 168 projects, approximately 840 initiatives and 67 quick-wins.

Mr. Clifford said some of the quick-win recommendations were already being implemented.

‘[Lufthansa Consulting] found it apparent to collect back for excess baggage,’ he said. ‘Cayman Airways can realise significant revenues from that.’

Mr. Clifford notes that collecting all excess baggage fees when payable would require accountability and much more discipline from the airline’s employees.

‘A key feature of the audit is the issue of accountability.

‘We’ll require what some people see as tough,’ he said. ‘I don’t see it as tough, but I see it as necessary, and something that should have been implemented many moons ago.’

The audit also found a flawed system for deriving company goals and communicating those goals to staff; a silo mentality whereby departments seemingly act without due consideration for, or consultation with, counterparts; and major deficiencies in terms of the decision-making process.

‘The audit points to key indicators and data being missed, which significantly impairs analysis, planning, realization and control processes of decision making.’

Not every finding of the audit was critical; areas of strength were also found.

‘These areas include… maintenance and engineering and flight operations,’ Mr. Clifford said. ‘It is notable that these are two areas with responsibility for safety and both have received very strong commendations.’

Mr. Clifford said the Government did not intend to simply shelve the findings of the audit and that it had agreed to implement the recommendations as a matter of priority.

In addition, the Government has committed to a proceeding with the development of a proper three-to-five-year strategic business plan for Cayman Airways.

That plan, which will include market analysis, route planning and fleet considerations, is expected to be completed by mid-September, he said.

‘The full implementation phase is anticipated to take one to two years, but the final determinations of the timeline will be made when the strategic plan has been completed,’ Mr. Clifford said.

‘We will be moving forward with the reinventing of the airline and the creation of a new business culture for the national flag carrier.’