Cayman Airways climbing out of $50 million debt

Once saddled with burgeoning “historical debts” of around $50 million, it appears Cayman’s national airline may finally be climbing out of a debt spiral that had threatened its operations in 2009/10.

Cayman Airways board Chairman Philip Rankin said last week that the historical debt – which was $48.4 million when he joined the board in 2009 – has been reduced to around $19 million.

CAL Chief Executive Officer Fabian Whorms confirmed that it will take the airline until the end of this decade to pay off the remainder, if it stays on course.

“CAL is currently on track to be debt-free in four years,” Mr. Whorms said, adding that the airline has not initiated any new borrowing under the present administration.

The dire debt situation was publicly reported in mid-2010 during a meeting of the Legislative Assembly’s Finance Committee.

Then-CAL Chairman Jude Scott explained at the time that the national airline had amassed between $50 million and $51 million in “under-funded losses” over a number of years. Mr. Scott said “chronic under-funding” by government had left the airline to make up the difference in sometimes creative ways.

“In some cases [the airline used] formal borrowings, and in some cases they used informal borrowings,” he said, not explaining what was meant by the latter.

At that time, the board decided to begin paying down the airline’s debt at a rate of $5.1 million per year. Keeping that payment schedule would allow the airline to erase its historical debt by mid-2020, if no other borrowing was undertaken. The money is paid as part of the government’s subsidy to the airline, which now surpasses $20 million per year.

Once the debt is paid off, it is likely that Cayman Airways will still require government assistance to continue operations.

Mr. Whorms explained last week that Cayman Airways will receive about $2.6 million in the next year to subsidize flights between Grand Cayman and the Sister Islands, routes on which the airline has always lost money. Another $13.8 million has been budgeted to support flights to “strategic U.S. and regional gateways” that the board members and government view as key tourism markets.

The total amount government pays to support domestic and strategic international flights has been reduced by about $1.4 million since the 2014/15 budget year, Mr. Whorms said.


  1. What we need to do as a country is to support our National Airlines. Just imagine a family living at home using electricity water phone and all other necessities. If every one does not chip in when end of month come, what do you think will happen.
    So my two cents is to fly Cayman Airways, and always give support.

    • Twyla
      I agree with you 110%.
      We cannot allow ourselves to be dependent on overseas carriers, who can cut us off at any time.

      Just a few years ago there was a case in the European press about a budget airline, Ryanair or Easyjet, I can’t remember which. Who had been flying to this small French town.

      To accommodate their flights from the UK this French town spent millions expanding a local airport. After a few years the airline decided to pull out of that market leaving the town with NO direct flights from the UK.

      It also meant that those people who had bought a vacation home near there relying on this direct flight had to travel for hours more. AND it knocked about 10% off the values of these homes.

      • Norman Linton

        I think you’re referring to Ryanair’s decision to stop services to Strasbourg in 2004 following a successful complaint and court action by Air France. The court action complained that Ryanair were receiving an illegal subsidy from the airport owners. Since then Air France have also quit the airport, mainly because TGV opened a high-speed rail link to Paris.

        Hardly a valid comparison and in any case Ryanair, who have continued to serve the city through nearby Baden-Baden in Germany, plans to re-open the route next year.

        Make all the excuses you want for CAL but the fact is that as long as they can make a profit AA, Delta, JetBlue, et al will continue to fly into ORIA. If they ever stop making a profit on the routes CIG won’t have enough money to keep CAL flying anyway.

  2. Let’s get this straight – CAL hasn’t been paying this debt off from the company profits, the payments have been made by everyone who pays taxes, duties and other government charges. There’s nothing to be proud about here because in simple terms it’s a government bail-out with public money that could have been put to better use.

    The reason CAL got into that state in the first place is probably because they simply didn’t manage their finances properly. I remember one well-known local businessman being allowed to run up a debt of over $220K for air freight charges, which CAL must have known was very likely unrecoverable, before they cut him off in 2007 and demanded settlement.

    I also think we need a bit more information about the ‘informal borrowings’. What did the people running CAL do? Go begging to their friends and relatives? Because that’s what the term normally relates to. Certainly it implies obtaining funds from outside the normal, regulated financial sector and that in turn suggests that CAL were forced to pay over the odds for loans after their regular sources refused to lend them any more money.

    There are way too many unanswered questions about the way CAL has been run and financed over the years.

  3. So what I am reading is: The people of Cayman, visitors and business have made a capital contribution to CAL of $50,000,000.00 in the past year?

    Wow, I wonder what kind of business I could start and get all these people to finance it.

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