Cayman Airways Faces $41 Million Loss Over Five Years, Plans Fleet Revamp

Cayman Airways, the national airline of the Cayman Islands, has incurred losses totaling KYD34 million (approximately USD41 million) from 2018 to 2022, according to a report by the Office of the Auditor General. This financial strain has pushed the airline into a negative net worth of KYD25 million (USD30 million), underscoring significant challenges in its operations and financial management.

The audit revealed that out of the 16 to 18 routes operated by the airline during the mentioned period, only 10% turned a profit. The carrier’s inability to adjust its cargo rates, unchanged since October 2017, has also contributed to its financial difficulties, particularly in competition with more cost-effective ocean freight services.

Despite the setbacks, including the grounding of its Boeing 737-8 fleet and the cessation of commercial flights due to the Covid-19 pandemic from March 2020 to November 2021, Cayman Airways has received about USD11 million in compensation from Boeing. The airline plays a crucial role in providing an inter-island air bridge, contributing over KYD200 million (USD243 million) annually to the local economy.

However, the auditor general’s report calls for a strategic review and better financial planning by the airline, highlighting the need for more realistic budgeting in cooperation with the government, especially for strategic domestic routes.

Looking ahead, Cayman Airways is exploring options to expand and modernize its fleet, including replacing its aging Saab 340B(Plus) aircraft. CEO Fabian Whorms indicated the airline had acquired a refurbished DHC-6-300 to support Cayman Airways Express services to Little Cayman and is considering future aircraft replacements to enhance operational efficiency. While no specific aircraft model has been selected for the Saab replacement, the goal is to streamline the fleet to potentially just two types, improving the carrier’s efficiency.

With a current fleet comprising four 737-8s, two Saab 340B(Plus) aircraft, and two DHC-6-300s, Cayman Airways stands at a critical juncture. The airline’s strategic decisions in the coming months will be pivotal in navigating its financial challenges and fulfilling its vital role in the Cayman Islands’ connectivity and economic well-being.