Employees bear brunt of Caribbean Airlines’ cost cuts

Caribbean Airlines (BW, Port of Spain) is to save USD1.6 million a month by furloughing 33% of its employees and slashing salaries for eight months as it tightens operations in the wake of COVID-linked reduced travel demand. The state-owned flag carrier of Trinidad and Tobago said in a statement the temporary measures formed part of its business recovery plan in terms of which it must preserve cash and achieve cost reductions that reflect its changed revenue position. “These temporary measures represent the best way that we can achieve this. The alternative, if we do not achieve our target cost reduction, would be to consider other measures that may lead to permanent separations,” the airline warned. For three months from October 15, 2020, the carrier will temporarily lay off more than 500 of its 1,600 employees across its entire network. For eight months from the same date, it will also reduce the salaries for those paid more than USD7,500 per month, with more reductions for those on higher salaries. Pension benefits and medical plans would not be affected. Employees would be recalled to work in their original posts as needed and based on job function and seniority, the airline said. The Trinidad Express reported that salaries would be cut by 15% to 20%. It said the most immediate impact would be felt by the company’s 250 pilots and 375 flight attendants. It added that Caribbean Airlines had proposed to place contract pilots older than 60 on unpaid leave from October to December 2020, but that this was opposed by the Trinidad and Tobago Airline Pilots Association (TTALPA). Meanwhile, the airline said it would further cut costs wherever possible, including reducing contractors, temporary workers and unwarranted allowances. It said the temporary layoffs would not impact on its current operations, including cargo; a domestic air bridge between Port of Spain and Tobago; nor on Kingston Norman Manley and Bridgetown-based commercial services; and special government approved flights to/from Trinidad and Tobago.