Caribbean Calm

The sky is falling! Literally. Al Italia has taken a loan from the Italian government to stay afloat; American Airlines is in state of crisis, frantically charging for checked luggage, desperately searching for other sources of revenue; the business class carrier Silverjet’s share prices have plummeted; and Air Canada has been forced to raise ticket prices for some routes. All because the price of oil is rising and as of today, it’s a record breaking US$140 a barrel. Some would call it Armageddon!

But not Philip Saunders and Francois Pariseau. They’re quite calm actually and, I must say, very pleasant company. Why? Because Caribbean Airlines has had a fantastic first quarter and is scheduled to break even by the end of the year. They’re very happy with their progress and they should be. Since taking to the skies in January 2007, Caribbean Airlines has developed at a tremendous rate, boasting an 80% market share in point to point business flights and as of July 2008 CAL will run 114 international flights per week, up from 62 with a recently extended fleet of seven Boeing 737 jets. Not bad. Not bad at all.

However, I can’t help but wonder how this newly established carrier, is not only surviving, but also doing extremely well amidst the airline industry’s precarious situation. Saunders admits it himself, quoting a fellow industry head - it is the “most serious challenge ever to face civil aviation”. He goes on to note that according to the International Air Transport Association (IATA) fuel prices accounted for an average of 13% of total airline costs in 2002, this figure had jumped to 38% by 2008. There is no question about it rising fuel prices are affecting everyone, especially the aviation industry. So to get back to the original question, why is Caribbean Airlines doing so well? The answer is simply that they’re buying oil at hedged prices for the foreseeable future, meaning they’re paying a fixed rate. The rising oil prices haven’t hit them as hard as its hit other industry players.

As a result, Saunders can concentrate his energies in other areas. First and foremost on his agenda: creating a full service airline. For him, service is the way forward, ensuring passengers have a pleasant travel experience and that there are no hidden extras. Basically, Caribbean Airlines will not be charging to check luggage anytime soon, we can all expect a hot meal during the flight, that we’ll arrive on time and our luggage will be at the other end of our journey waiting for us. My internal voice is having doubts… delayed flights are now the norm. But then Saunders backs up his statement by claiming that CAL flights now have a punctuality rate of over 90%. A Trinidadian airline on time! Pigs are flying somewhere.

Caribbean Airlines have also expanded their international routes. Certainly the “visiting friends and family” group, or as I fondly call them, the Diaspora, are some of the most important visitors to the Caribbean region. They return regularly and they have disposable income that they readily pump into our small island economies. They keep us afloat; hence, we like them to keep coming. As a result, Caribbean Airlines has developed routes to do just that. They are now the only carrier to fly daily to both Miami and Fort Lauderdale and this summer will offer 10 flights a week to Toronto. They’ve also spread into the South American market, offering flights to Venezuela and Guyana. Their rationale for these routes? Building Trinidad as a transfer hub. Well, why not? That’s what the new Piarco airport was built for wasn’t it…?

I’m surprisingly calm and admittedly a bit disappointed. They seem to have everything under control. I was expecting a little more drama than this. An anguished look about the oil situation at least. So, let’s shake things up a little. This is an Armageddon piece remember? Let’s talk about the environment. Everyone’s frantically trying to “Go Green” to save the Earth and mankind. Emphasis is on conservation because if you believe the news EVERYTHING except carbon dioxide emissions is running out.

Saunders and Pariseau are nodding. They both look quite concerned, as the environment is crucial to them also. In fact, Saunders claims that other industries could probably learn a substantial amount from the aviation industry about conservation. This industry only accounts for 2% of global carbon dioxide emissions. It’s actually in their best interest to conserve fuel. According to IATA “opening new more direct flight routes and re-aligning others to reduce fuel requirements can save the industry US$1billion and reduce fuel emissions”. So what is Caribbean Airlines doing to keep their fuel emissions down? Well, several things actually. First off, their new planes are modern, unlike American Airline’s gas guzzling jets; theirs have “winglets that improve the plane’s aerodynamics by 5%”. Secondly, they’re working with air traffic control to decrease congestion and increase flying times. Additionally, they were recently given permission to incorporate the Extended Range Twin Operational Performance System (ETOPS). CAL can now fly shorter routes that were previously off limits to twin engined aircrafts. Whereby, saving fuel by cutting flying times and according to Pariseau they’ve saved 443 kilos of jet fuel from their Toronto route by using such practice. More interestingly, however, and certainly worth mentioning, Caribbean Airlines gone even further in their “greenness” by supporting the Guyanese Iwokrama forest – one of the last pristine rainforests that Mother Earth has to offer. Saunders states that it is their way of making a statement as a corporate citizen.

All in all, they’re doing their bit. They’re making substantial headway with the newly formed airline, they’re happy with their progress and they’re giving back to the regional community and trying to save the planet at the same time. No wonder they’re so relaxed and friendly. But I suppose for these two; it’s all in a good day’s work.