Cayman Airways granted another $8.5mn gov’t lifeline

The Cayman Islands parliament has approved another KYD7 million Caymanian dollar (USD8.5 million) in rescue aid to Cayman Airways (KX, Grand Cayman Island) to make up for revenue shortfall due to the COVID-19 pandemic and cover its expenditures until year-end 2021.

According to a government statement, the allocation forms part of KYD96.4 million (USD117.5 million) in additional funds for the 2021 budget approved by members of parliament on July 21, 2021. The highest individual amount approved was KYD27.5 million (USD33.5 million), earmarked to extend tourism stipend payments until December 31, 2021, to deal with the ongoing fallout from the pandemic. Of this, KYD10 million (USD12.1 million) was also allocated to the Cayman Islands Airports Authority.

As previously reported, Cayman Airways, the flag carrier of the British Overseas Territory, already received KYD16.3 million (USD19.8 million) in COVID-19 support from the government last year, covering the period from January to December 2020.

According to the government’s Strategic Policy Statement for 2022-2024, its planned capital investment for Cayman Airways over that period is another KYD9 million (USD10.9 million). As of May 31, 2021, the government had guaranteed loans of KYD19.8 million (USD24.1 million) in favour of Cayman Airways, which would mature on February 28, 2029.

Meanwhile, Cayman Airways Chief Executive Officer Fabian Whorms told the parliament’s Finance Committee on July 19 that the airline’s funding requirements had already factored in the future sale of its two B737-300s, as well as compensation received from the manufacturer for the grounding of its new B737-8s, reported Cayman Compass. Without specifying an amount, he said: “I would venture to say that we have done well, as far as we know, comparatively speaking against other airlines, in terms of what we received for compensation”.

He said the airline had until October 2021 to dispose of the B737-300s because that was when significant maintenance would be due on the two aircraft. The plan was to invite bids on the two airframes and five engines in a public tender. The sale proceeds, together with the KYD7 million in additional government funds, would be necessary to get the airline to the end of the year, Whorms said.

Cayman Airways’ fleet modernisation programme, begun in 2016, was supposed to have seen its B737-300s replaced with the B737-8s by 2020. This was delayed after Boeing grounded the MAX for 18 months over safety concerns following two fatal accidents and by the COVID-19 pandemic, which has limited passenger air services. By April 2021, Cayman Airways had received three B737-8s from lessor Air Lease Corporation. Its current fleet comprises the two B737-300s (stored), the three B737-8s, two DHC-6-300s and two S340Bs operated by its ALKXE subsidiary, according to the ch-aviation fleets advanced module.

In June, the Cayman Islands government introduced a phased re-opening of the destination, with the re-opening of borders scheduled for September 9, 2021, along with a limited reintroduction of tourism. This will be subject to an 80% domestic vaccination rate and airport slot management to limit the number of arrivals. Quarantine requirements for all vaccinated travellers are to be removed from October 14, 2021.