Brac flight losses remain secret

| 30/04/2015 | 56 Comments

(CNS): The tourism minister refused to reveal how much it costs to operate CAL Express when questioned in the Legislative Assembly recently, as he said it was commercially sensitive information. MLA Ezzard Miller asked Deputy Premier Moses Kirkconnell about the 30-seat Embraer EMB 120 Brasilia, which flies between the Brac and Grand Cayman, and how many passengers were needed to break even on each flight as he understood the government-owned and subsidized airline is losing tens of thousands of dollars on every flight.

Cayman News Service

Embraer EMB 120 Brasilia on Cayman Brac (Photo by James Tibbetts)

After the minister declined to answer the  parliamentary questions submitted by the North Side member and follow-up questions by others, Miller told CNS this week that he can now only go on the information he has, which is that it is costing some $200,000 per month to lease the planes but the flights are only on average 30% full, leading to what could be substantial losses.

When he asked the minister for details, Kirkconnell referred to Standing Order 23 (4), which says a member of government can decline to answer a formal parliamentary question if he believes it would be contrary to public interest.

“In this instance the answers to the questions are considered commercially sensitive information and should not be released because it could put Cayman Airways at a competitive disadvantage,” Kirkconnell stated.

When the opposition leader asked him if he would sit with MLAs privately and explain how the whole lease agreement works with that aircraft, including the costs and the operations, the deputy premier agreed to let them see the business case.

Cayman Express improves airlift for Cayman Brac

“The sensitive information here is to remember that Cayman Airways competes on a global basis and when information that is sensitive to the operation of CAL itself is released, it hurts every one of us in this chamber,” he claimed, adding that he hoped showing them the business case would be satisfactory.

But Miller made it clear that he did not want to see the details in secret as he believed it should be available to the public and someone would be accused of leaking it out.

The North Side member said, “I don’t want to be a party to us going behind locked doors and sharing information that is meant to be kept confidential because it is not going to be confidential in the final analysis. My position is that this is public information and if you give it to me I am going to tell my people that I represent.”

The East End MLA Arden McLean urged Kirkconnell to “explain to the House, which has responsibility to the people and has authority over Cayman Airways to provide funds for it … what is commercially sensitive with the information on their operations between Grand Cayman and Cayman Brac and Little Cayman when we do not have any competition in that arena.”

However, the speaker intervened and said the minister had already exercised his discretion over the question and stopped him from answering.

Speaking to CNS Wednesday, Miller said he was very concerned over the secrecy and could not understand, given the millions of dollars of public money which is sunk into the National Flag Carrier, why the minister would not tell the members of the LA and the public what the operating costs that they are subsidizing actually are.

“His justification was for commercial reasons but there is no competition on the route,” the independent member pointed out. “I think the information needs to be public as I understand it is costing some $200,000 to lease the planes each month and they are flying at 30% capacity.”

He said it appeared that the flights were not even breaking even but he could not be certain since the minister would not say what the figures really were. But Miller said that if they were as bad as he believes, it was of significant concern.

“It is an atrocious waste of public money,” he claimed. “If this is accurate then it has got to stop,” he added, as he urged Kirkconnell to come clean and tell the people how much the public purse is losing. Then, he said, decisions could be made on how to make savings to ensure a less costly service between the islands.

CAL Express also owns and operates two 15-seat DHC 6-300 Twin Otters, which fly between all three Cayman Islands.

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Category: Government Finance, Politics

Comments (56)

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  1. Anonymous says:

    Just another sign of the poor governance and zero transparency that abound here. In all of the EU this type of public information is available in the public domain. It makes you wonder just how corrupt this is and just why they don’t employ people who know what they are doing.

  2. Anonymous says:

    Ezzard, dude look at how Mr. Kirkconnell takes care of his people. You should take care of us instead of always picking fights to get press for yourself.

    Maybe we can get Northside included with the Brac in the new electoral boundaries.

  3. Phil says:

    I am looking forward to fly with blue sky and support them more. I don’t support cayman airways as they get free cash which it is wrong. Sell Cayman airways!

    • da-wa-u-get says:

      Much afraid you may have quite a wait ahead of you if you are looking for blue sky to carry you anywhere!

  4. Anonymous says:

    It’s dangerous to have someone like Ezzard in a position of power. He is willing to sacrifice negotiating power that CAL might have as they negotiate leases just to make himself look important in the LA. I don’t know about his own Northsiders, but the rest of us see what a small person he really is.

    • Anonymous says:

      He’s not doing anything for us in Northside! He’s too busy trying to look like his own police investigation team. He just looks like a lost man, bitter against everyone. Could someone take him out tonight.

    • Anonymous says:

      right, must have been a slow day in the LA for Ezzard, no ExPats to pick on I guess

    • Anonymous says:

      That’s what happens when the ignorant and uneducated vote for the uneducated ignorant. Ezzard is clueless on most matters, but he appears to specialize in trying to destroy commercial confidentialities for his own gratification. His narcissistic tendencies will eventually dismantle any chance that Cayman has of attracting external expertise and investment with disastrous consequences for the future.

  5. Bobo says:

    Why are we asking about cayman express? What about the insane practice of subsidizing a company CAL that operates in what is essentially bankruptcy every financial year.
    Kids don’t eat, poor sports programs, inadequate schooling, seniors care……heck a new airport! All to keep 400 or so people employed oh yes and of course the ramp guys or flowers shall we say all politics and wasting tax payers dollars

    • Anonymous says:

      Well Bobo hope you don’t need CAL to get your family off the island before the next hurricane.

  6. Anonymous says:

    Two things have to happen to be profitable in the airline business (or at least break even).
    Keep the planes FULL and keep the planes FLYING.
    The 15 seat Otter flying 4-5 times a day can actually turn a profit, whereas a 30 seater plane flying 1-2 times a day (even with full flights), and sitting on the Tarmac the rest of the time, will NEVER be profitable.
    Government should have never invested in a larger plane unless there is enough demand to keep that plane flying all day long at near capacity. Clearly they don’t have that demand.
    This is all about politics and vote buying, but what else is new? As usual, the Grand Caymanians pick up the tab while the sister islands get a free lunch.
    BTW, all the thumbs down votes are from Bracers and Little Cayman residents.

    • Anonymous says:

      Outsource maintenance , outsource reservations.
      When was the last time you went to an American AIrlines office to purchase a ticket?

    • Anon says:

      There is no such thing as Grand Caymanians and Brackers. We are all Caymanians so we all pay!

    • Little says:

      Little receives no benefit from the 30 seater (it can’t land here!), we’re happy with the Otters.
      In adittion, do not group Little with the Brac…come over and have a taste of the two Sisters and you’ll definitely prefer one over the other.

  7. Anonymous says:

    travel tip #1
    lets say I live in the brac and want to go shopping on grand I get an appointment with my doctor for headaches or backaches or gas and because I have health insurance my flight to grand and my rental car are paid for by the insurance company My appointment is usually for 10am and I return in the evening with full bags
    Life is Good my pain is cured till next week….

  8. Thor says:

    What we the public would like to know, who or which firm are advising government on these cock a meanie schemes?

  9. Anonymous says:

    Why cant we just sell the Brac to Dart. Better yet lets just give it to him.
    This island comes as is.

  10. Anonymous says:

    Come on now, Moses. How can the information be sensitive if there is absolutely no competition on that route?

    • Anonymous says:

      Run in Grand Cayman we will show you what is sensitive, just like how we showed the UDP how we feel about waste, squandering and secret deals

    • Anonymous says:

      Because CAL are over-paying on the wet-lease to TCI gov’t. Someone else could eye these margins and decide to start their own airline, using market competitive lease rates, and flying routes not out of civic obligation, but out of profitability.

  11. Sharkey says:

    I guess that Moses think he’s showing his power in the LA , pretty soon everyone in government will have so much power that they would be able to do whatever and not be held accountable. I think that the people of Cayman Islands need to demonstrate and demand that he make this public .

  12. Anonymous says:

    CAL operates on a global basis? Last time i checked, they operate just a handful of routes.
    Hiding behind an archaic standing order is both cowardly and extremely suspicious. The minister responsible might represent the Brac, but he is there to serve ALL the people. If he is wasting public money we have a right to know. Perhaps one day there will be accountability in government.

    • Anonymous says:

      My read on this is that the minister responsible WAS serving ALL of us. He was willing to take Ezzard’s self-serving verbal abuse rather than release internal financials that would have put our national carrier at a disadvantage. I’ve seen these US carriers pick apart the inner workings of their competitors to gain insights of how to beat them. Remember CAL Express is part of the overall CAL picture.

      We should be applauding the minister for not taking the easy route, but instead doing what was fiscally prudent for the operations in his ministry.

  13. Anonymous says:

    And how much profit is there with the hundreds of flight going int Grand Cayman
    per month 0 profit airlines don’t make profit it is a mains of a comfortable transportation
    if you are looking profit get a sailing ship. many countries don’t have a airline
    fortunately we somehow same to be able to afford it. by the way we are all paying for it GC / CB / LC

  14. Anonymous says:

    Its easy to work the maths out by first assuming all seats are full, then cost that against revenue. Its making a loss so please no need for an enquiry or report that will be changed when government dont like the findings. Just manage the situation but if course we all know that it is votes that count and each vote is the equivalent of a welfare payment.

  15. Anonymous says:

    The Cayman Islands is so lucky to have so many aviation experts. They should all get together and start their own airline.

    • Anonymous says:

      They have – it’s called BlueSky. The business plan for this airline is the model that CAL should have adopted years ago. Instead CAL have clung to the mistaken belief that they can operate as a player in the international market when in reality they should long ago have down-sized and become a regional airline working in cooperation (code-sharing) with the major carriers that service these islands from North America.

      CAL has two problems – the first is that they don’t have any international aviation experts on their payroll. The second is that even if they did nobody involved in running the airline would listen to them.

      • Anonymous says:

        If anyone doesn’t understand ‘code-sharing’ (and I’m sure nobody at CAL does) this is where one carrier provides the aircraft on a route but several airlines sell seats on it on their own websites. Some code-sharing services can have three or more airline codes on the same route.

        The huge advantage of this arrangement would be that CAL could dump the costs of running it’s aging 737s and put its passengers on modern jets. Similarly it could expand the network using other carriers’ routes. In both cases there would be very little additional investment required and the overheads would be nominal. In fact by merging the CAL identity with someone like AA they could even do away with CAL check-in desks and staff.

        CAL’s end of the deal (although I suspect one that BlueSky might grab from right under their noses) would be to extend the partner carriers’ networks by providing connecting flights using 70-90 seat turbo-props to local destinations.

        I think you can best sum up CAL’s inability to get their collective heads around this issue by the mess they made of the proposed tie-in with Virgin Atlantic. That should have resulted in numerous additional passengers arriving at ORIA on CAL after connecting with Virgin flights from the UK but it doesn’t work and it never has. In fact last time I checked (5 minutes ago!) neither Grand Cayman nor the Cayman Islands comes up on the Virgin website destinations choice. Can anyone at CAL explain what went wrong there?

        • Lo-Cal says:

          Code sharing in the aviation industry is common place and the bigger airlines use this to see how many of their customers are flying to a destination before deciding whether to fly the route or not. This has happened to Cayman Airways more than once.

          If you recall Cayman Airways started the route to Houston which was taken over by Continental who priced them out of the route then raised their price when they had the monopoly. The same thing happened with Delta and the Atlanta route.

          Cayman Airways is used for politics by all parties as they know the route will never be profitable. The simple solution is to stop flying the jet and upgrade the express to a bigger plane like the dash-8 Air Jamaica Express used to fly here. This type of plane can carry up to 60 people at a time and the operating cost is not high. This same plane can fly to Honduras and Panama which would free the jet for other high volume destinations.

        • Anonymous says:

          The best thing CAL could do is join the Star Alliance and start code-sharing with United, Copa, Air Cda, Lufthansa, Swiss, Air NZ, Air China, Air India, South African, Singapore, LOT, etc.

  16. Frusterated with the waste of money says:

    In modern financial management terms, the Brac simply enjoys “transfer payments” -money given to them just to spend, spend, spend with no assessment of need and no requirement to actually produce anything in return for the money. Certainly, it does not have to change its ways and try to make itself more like other islands hungry for tourist dollars by becoming less of a dead backwater.. Why should it change when all it has to do is bitch about being second class and then it gets another influx of funding for some useless over the top project. It is a welfare state of about 1500 people which has to be kept going simply because two seats in our electoral system are up for grabs and can only be bought by constantly pouring money one way endlessly into the pockets of the inhabitants there.

  17. Anonymous says:

    How many other low populous countries need or own an international airline? CAL is a huge waste of public money and should be sold off immediately, after all, the population here is the equivalent of a small town or village in the UK, US or Canada. How many small towns do you know have their own airline?
    Stop living beyond your means, stop subsidising for votes and stop pretending that Cayman is some regional power that MUST reflect a mythical influence. It really doesn’t impress anybody that matters and you are in danger of falling flat on your face.

  18. caymanqt says:

    Many days there are no seats available to fly from the Brac/Little to Grand Cayman. The plane is full every time I am on it and I hear from other Brackers that they have to change travel plans because no seats are available. I manage tourist rental property, picking up visitors when they arrive, so I know their travel schedule and the difficulties they have getting over to the Brac. And I see the many other passengers who get off the flights. Wish I knew when these 30% full flights were so I could let tourists coming here how to schedule their flights.

  19. BracFan says:

    They may be speaking of the jet service more than the prop service. I’ve frequently seen the GCM-to-Brac jet less than half full. The prop flights, on the other hand, always seem to be full or mostly full.

  20. Anonymous says:

    Check the flights for tomorrow Friday. There is only one flight available to Grand from Brac. Almost all of the accommodations are booked next weekend.

  21. Anonymous says:

    I don’t understand something cns . When i down vote and there is no thumbs up, I get one vote as a thumbs up and one as a downvote. When I vote thumbs up, I get two thumbs up.

    CNS: I suspect that when you vote it just happens that someone else is voting at the same time. The thumbs are a plugin. We have no control over them.

  22. Anonymous says:

    Fire the CAL management and board for this latest cock up.

    The bracker mafia must be held accountable. The response from the minister is LOL disgusting but says a lot about his views on transparency and good governance.

  23. Anonymous says:

    It is time for the two Brac dons to retire and waste their own monies not the public’s. If it was McKeeva doing it there would be a full investigation so the same needs to apply here as well

  24. Localish says:

    Moses JuJu and PPM are no different from the last set of con artists UDP who wasted funds and negotiated sweet heart deals for them and they friends. Disgusting behavior on display yet again by this lot who will gladly use public funds to finance their dreams and self interests. The AG needs to investigate everything done in the Brac and determine if the concept of value for money exists at all. PPM are morally bankrupt!

    It looks like same dog puppy to me.

  25. I fly between Grand Cayman and Cayman Brac on a regular basis and the plane is fully loaded every single time I fly it so how can it be a loss. I have never understood why some of the “powers that be” in Grand Cayman are so incensed by what the government does to help raise the bar for our beautiful little island. While we do not wish to be another “Grand Cayman” (oops! Atlantic City, Las Vegas, Myrtle Beach) we do offer something that is more genuine and beautiful for people who want to come experience the “real” island life that the Brac and Little Cayman offer. Get a grip guys! We don’t want to be like your trashy, commercialized island. We just want a chance to survive until the brass ring that is coming to our hands arrives; and it is coming with genuine class – something you might not understand. (And further more we are not a charity case over here! We are tying to keep something of historical value intact for the future of the Cayman Islands – something your forefathers treasured until you ruined it.) The attitude reminds me of a table set with wonderful food and the hogs got a go at it first!

    • John You says:

      Nothing wrong with flights to the Brac, if it’s economical to run more flights to there yes, however who did the case study to lease the planes, an
      why is kept from the Public, it’s all political,comon sense will tell you it can’t be affordable, they need to keep the country owned planes doing the route, as so much money has been pumped in the brac already. That Grand Cayman people pay the price, as u know cayman brac cant sustain it’s self. They need to have their own budget and see if they bring in any revenue, then u will see what im talking about.don’t bleed Grand cayman residents.where they work hard for their money while others kick back and get hand outs.
      Ezzard needs to ask how much More are the 2 members going to deprive the residents of GCM of getting what is needed to keep the country afloat. Never heard of poor people in the brac. Wonder why?

    • Anonymous says:

      There’s a huge difference between a full aeroplane and an operating profit. Just because all the seats are taken doesn’t mean the flights are making money and that’s the whole problem with CAL – in order to sell seats on their flights they have to charge fares that don’t cover their actual costs and then expect us to pick up the difference.

  26. Anonymous says:

    its confidential because it loses an obscene amount of money……..but al least it guarantees moses to be re-elected!…………..zzzzzzzzzzzzzzzzzzzzzzzzzzzz

  27. Anonymous says:

    It is improper to ask how much is wasted propping up the voter base in the Lessers.

  28. Anonymous says:

    I suppose the Member who usually had the rear seats in the Otters has been upgraded to first class on the new aircraft. Just doesn’t want it discussed. Which Minister was involved in the negotiations to buy the new aircraft?

    • Anonymous says:

      The two persons who fly this route more than anyone other than the pilots are the very two who are gagging this matter. Have they no shame all. The twin Otters have been good enough for our tourists all these years but we spend millions each year, it seems on personal whims. Just disgusting!!

  29. Anonymous says:

    We all know that CAL burns our money, but wet leasing an old EMB120 for $2.4mln a year when (the initially desired) brand new Saab 340B costs $6-10mln, would be truly bananas, even by CIG/CAL and Turks & Caicos standards.

    Competing short term wet leases run at around $3000/flight hour. Used late model EMB-120’s (like the one CAL is wet-leasing) or Saab 340B’s can be acquired outright in the neighborhood of $1.5mln. http://www.airfax.aero/rca.htm#x120

    TCI Gov’t doesn’t appear to have any formal record of this agreement with InterCarribeean on their gov’t site. If someone can find it, they should post it. At minimum, the duration of the wet lease contract should be public record, as should a progress report on the replacement (seeing as we’re 7 months in).

  30. Anonymous says:

    more wonderland stuff…bottom line…the brac is a welfare state and everything concerned with it is not viable economically….

    • Anonymous says:

      YEah but you always have to be a Bracker to hold certain positions in Grand Cayman. How does the Deputy Premier justify such a claim?

  31. Anonymous says:

    How can it possibly be commercially sensitive when no one else flies the route?! These people are a disgrace and need to understand that they are employed by the public, as public servants and should be answerable to the public about what they do with OUR MONEY.

    • Anonymous says:

      They are responsible to protect our interests such that CAL can make the best commercial deals possible. I appreciate that they are not bending to political pressure by those that don’t understand the importance of confidentiality. CAL express routes are part of the overall routes and provide part of the puzzle for others to cleverly deduce internal CAL operational metrics.

      You should admire Mr. Kirkconnell for taking the heat, we do!

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