Cayman Airways bosses have confirmed the airline will purchase three of the jets it currently leases – a move they say will save the country millions over the next few years.
The airline also confirmed plans to rent a new larger plane, with between 30 and 34 seats – more than double the capacity of the Twin Otter planes currently used for the Cayman Brac route. The switch will halve the number of scheduled flights to the Brac, creating cost savings of around $750,000 per year.
Fabian Whorms, chief executive officer of Cayman Airways, told legislators during a Finance Committee hearing on Thursday that the three Boeing 737-300 jets, used largely on international routes, would cost a total of $7.9 million. The planes, which are between 18 and 21 years old, are currently leased at a total cost of $5.9 million a year.
Paul Tibbetts, chief financial officer of the airline, told legislators that, although the airplanes are old in terms of years, they are actually only at “half life”.
“Aircraft time isn’t based on how many years since manufacture. It is based on how many hours and cycles you use it. They are designed for 50,000 and they are at about 25,000, so from our standpoint they will be at midlife.”
Neither Mr. Tibbetts nor Mr. Whorms gave an estimate of how long they expect the planes to last. An early draft business case for the purchase, seen by the Cayman Compass, suggests the airline will need to move to a newer type of aircraft within the next three to five years.
After the current budget year, the purchase of the planes is expected to save the airline $5.9 million a year that it would ordinarily have had to use on rental payments.
Around $2.5 million of that will be held in reserve to fund any maintenance issues that arise.
Mr. Whorms said some of the savings would be reinvested to help make the airline more efficient, including holding more spare parts to deal with maintenance issues more quickly.
The airline officials also confirmed that a business case had been completed for a Saab 34 aircraft to operate on the Brac route – first reported by the Compass in April.
Mr. Whorms said the move to the much larger aircraft would likely mean flights to the Brac would be reduced from six a day to three a day.
“What we have considered is a 50 percent reduction in the Twin Otters flying and similar reduction in jet flying as well. It will depend on loads and demands.”
The Twin Otters, which are owned by the airline, will still operate on the Little Cayman route and between the Sister Islands and will serve as backup to the new plane.
Mr. Tibbetts said the changes to the route would save the airline $60,000-a-month, which could potentially come off the subsidy.