BWIA to shut down, be replaced by Caribbean Airlines

BWIA West Indies Airways, the money-losing Trinidad and Tobago carrier that unsuccessfully attempted multiple recoveries over the past decade, will shut down Dec. 31 and be replaced by a new carrier, Caribbean Airlines.

CEO Peter Davies, who will continue to serve as the top executive at the new airline, decided that a shutdown and clean start were necessary when BWIA's four labor unions balked at concessions proposed in the carrier's latest restructuring plan.

"When we could not get the union settlements in terms of what we could actually afford, then I had to go back to the board and say, 'I'm sorry but the original business plan is now null and void'," Davies told the Trinidad and Tobago Express in an interview published Sunday. "My recommendation was that we close BWIA, not an easy decision for me to come to."

Union leaders countered that BWIA's demise was a long time coming and that Davies, who assumed control in March (ATWOnline, March 24), is ignoring years of missteps in blaming labor for its failure.

Although it considered not supporting a flag carrier, the T&T government agreed to transfer a $250 million capital injection intended for BWIA's restructuring into the launch of Caribbean Airlines. Davies said a "sizable portion" of that money will be used to pay off "a huge amount of liabilities" incurred by BWIA "so when Caribbean Airlines opens it will have a clean balance sheet."

He said BWIA's assets, including aircraft and aircraft leases, will be transferred to the new company. But current employees will be jettisoned, paving the way for a new salary structure and fresh labor contracts. Those offered positions with Caribbean will have to accept "current airline market" pay, BWIA said in statement.

In an effort to expand revenue-generating potential beyond airline services, Caribbean also will "extend its engineering capability beyond its jet fleet" to perform "heavy maintenance and repair checks on its turboprop aircraft and for other carriers."

BWIA said more information on the new airline will be forthcoming, but Davies indicated that the new entity will move away from competing with major international carriers on high-density routes, concentrating instead on "niche" services. "That is one reason BWIA had to be changed because it was not in a position to compete with these giants," he told the Express. "Now we have to duck and dive and be more proficient."