Losses covered on CAL’s Barbados route

(CNS): Cayman Airways’ deal with Barbados to launch the route to the eastern Caribbean island guarantees the airline’s costs, plus a small mark-up according to documents released under a Freedom of Information request. The route ran at just 24% occupancy in October and although November is expected to be better when the numbers are in, CAL will not lose out even if they are not.

While the National flag carrier and the tourism ministry here had previously declined to publish the agreement an internal review following a refused FOI application by CNS has led to the release of the redacted deal with Barbados
Tourism Marketing Inc. and its request for the route.

The airline officials explained on release that the revenue guarantee agreement was redacted in two places because of the issues surrounding the commercial value that could prejudice CAL or Barbados Tourism Marketing. However, its disclosure shows that the guarantee appears to be in Cayman Airways favour.

While it has been difficult for people locally to understand why CAL launched the route the release of the documents shows that it had nothing to lose under the revenue guarantee while at the same time taking the opportunity to test out an inter-Caribbean route without sustaining any loses.

The deal for the route lasts, in the first instance, for just one year having started in October. Cayman Airways is guaranteed that the entire cost of running the route is completely covered with an additional small percentage mark-up even if the planes are empty. If the route succeeds however, the airline gets to keep the profit.

In her letter to CAL’s board chairman officially asking for the route, following discussions between officials on both sides, Shelly Williams the Chair of the Barbados Tourism Marketing Inc said the flight reflected both the Cayman Islands’ and Barbados’, “commitment to building out regional multi-destination travel.”

While CAL continues to face criticisms over its finances and the large subsidies that it receives from the public purse, the decision to enter into this deal will not have an adverse effect on the airline and could still help boost the Los Angeles route as the flights are timed to allow travellers from California to go to Barbados via Cayman and vice-versa.

Tourism officials here also said, when launching the route, that it could bring European travellers flying into Barbados to Cayman creating potential duel-destination vacationers.