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Flying a different route

Monday, December 6, 2010
Nirad Tewarie

Without a doubt, the details of what led to the firing of former Caribbean Airlines CEO need to be clarified. As a state-owned enterprise, all citizens have an interest in ensuring that the company is well-run and does not become a burden, again, to the treasury. More importantly, as an archipelagic state, the country needs efficient transportation systems to be able to effectively interact with the world.

In this regard, it is in everyone’s interest to ensure that the best deals are made in the procurement of services and goods by the national airline (and the State generally). To this point though, it remains unclear what the real issues are in choosing to purchase airplanes from ATR versus Bombadier—or indeed, any other supplier. The public has a right to know and the issue should be explained. Without all the facts, it is difficult to come to a conclusion on whether the Board acted in the national interest or not.

Since a deal for the purchase of planes has not yet been finalised however, there is one element of the proposed ATR deal that has gone largely unnoticed. In addition, there may be an opportunity to link the future of the airline to other strategic national interests.

Integrating business & development

In one of the news reports which focused on the details of the deal which former Caribbean Airlines CEO Ian Brunton had negotiated with ATR was a line, buried in the story, that said that as part of the agreement to purchase the ATR aircraft, the European company would invest US$800M to establish a maintenance and repair facility in Trinidad.

Now, in a country that is currently working on a National Innovation System; which admits that more needs to be spent on Research and Development; that wants to create opportunities in both the services industry and for niche manufacturing, this commitment is nothing which should be trivialised.

Whatever its faults, BWIA and then Caribbean Airlines has always had a very good maintenance team. Such a facility would allow not only the airline but also other industries in the country to build on those skills. If the facility is integrated into other initiatives and development plans, then the potential for the development of spin-off industries such as component manufacturing, engineering and industries that are developed based on the adaption of the technology used in this industry by other industries, is tremendous.

Such a facility, if it were integrated into university systems and other initiatives could well form a plank on which a part of a new economy could be built. Going forward, whoever is negotiating the purchase of new aircraft for Caribbean Airlines should seek to have something such as this type of investment included in a deal with whichever company is selected to supply the planes.

Flying into new foreign policy initiatives

If a new economy is to be created, then decision makers must be made to think outside the box. In this regard, it may be useful to consider whether at this stage or in the near future, the substantial entity that is Caribbean Airlines/Air Jamaica could be used by the Government to explore the development of closer, stronger South-South relations.

The previous government sought to do this simply by establishing loss-making routes. While in rare cases there may be some justification for this, that model should be discontinued.A new approach would require a break from the usual pattern of extraction of the country’s wealth by ‘developed’ countries. In the specific case at hand, while cost and, by extension, profitability should remain paramount, there may be room to explore the purchase of the new aircraft from the Brazilian aircraft manufacturer, Embraer instead of a European or US company.

In the changing global environment, power is shifting away from just the United States and Western Europe. One of the most influential ‘new powers’ is Brazil. Brazil is practically a neighbour of T&T. It is now possible to fly to Guyana and drive to Brazil. Yet this country’s relations with the South American giant remain largely under-developed. Even if a deal cannot be worked out for Caribbean Airlines to purchase the aircraft from Embraer, a genuine attempt, with significant government involvement, to explore how such a deal might be possible will almost certainly be met with warmth from Brazil.

Since coming to office, Prime Minister Persad Bissessar has raised T&T’s international profile. Already a T&T initiated resolution has made it to the UN General Assembly. These are positive steps toward increasing the country’s influence to further national interests. However, to do so on a sustained basis T&T will have to forge stronger relations not only within Caricom, the ACS and the GRULAC (Group of Latin American and Caribbean countries), the Commonwealth, ACP and nearly dead G-77 but also with influential individual member states. To do so, influence will have to be peddled at different levels. This may be an unorthodox way of doing so but it may be useful nonetheless. After all, nothing ventured, nothing gained.


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