Ex-CAL directors get free ride for life
(CNS): Many of Cayman Airways’ former directors are getting free unlimited flights for themselves and their immediate family as a reward for serving voluntarily on the airline’s board. Paul Tibbetts, the airline’s chief financial officer, told the Public Accounts Committee last week that around 100 former directors who served before 2009 are able to fly on the national flag carrier free of charge in confirmed seats whenever they want. Those who served after that year get to travel free during their tenure and for another two or three years afterwards, depending on how long they served.
Tibbetts and the airline’s CEO, Fabian Whorms, appeared before PAC on Thursday to discuss the financial reports for Cayman Airways Ltd (CAL) for the 2014 and 2015 financial years.
For some time there has been criticism of the flight benefits given to former directors, with people suggesting the airline’s losses are compounded by the number of free seats that are given away. Tibbetts told the committee that around 250 tickets are used by board and retired board members during the course of a year. He said that the seats are economy but when there is room they can be upgraded.
CAL staff and dependents can also travel free on standby or purchase confirmed seats at a discount. Depending on how long staff members serve, they are given different packages of flight benefits, while retired staff members can purchase confirmed seats at a 25% discount or travel standby for a small fee.
Tibbetts said all airlines give flight benefits and it is a way of improving the package CAL can offer staff without the airline incurring any direct additional costs, as he explained why it is listed in the annual report as an “immaterial” cost. He stressed that staff only travel free when there are empty seats that the airline could not sell anyway; when a flight is full they cannot travel.
He said the airline was unaware of any staff members making fictitious reservations to ensure that there were empty seats when they wanted to fly, and that if staff were caught doing that, they would lose their flight benefits. But he said there were checks and balances throughout the booking system that would make it very difficult for anyone to get away with doing that.
During the course of the committee meeting the members heard that CAL has finally begun to make an operating profit but it is still reliant on the more than $15 million government subsidy each year to support certain routes and cut fares to attract tourists . In addition, the government has been injecting around $6 million in cash each year to help the airline pay a catalogue of debts, including bank loans taken out to cover the operating cost shortfalls over previous years and to try and reduce its more than $20 million debt to the Cayman Islands Airports Authority.
The PAC will reconvene next Wednesday with CAL chairman of the board, Phillip Rankin. After he failed to attend last week’s hearing PAC Chair Ezzard Miller issued a summons.
Category: Government oversight, Politics
Da wha yuh get bobo
21 million dollar should spend on education which it more inportant…… not to keep bloody airline flying!!
I can understand an ex-employee getting discounted flights for a period of time but my issue is
1. Free flights for employee + all family members. Family of 4 flying off to Miami every so weekend = lost $$$$
2. The older terms were unlimited lifetime flights. No cap in place. Have these terms been phased out or are they still honored?
3. What about the double dipping on the pensions. Staff that “retired” getting their pension and now “contracting” for CAL at inflated rates with benefits. Is that going on? That should be evaluated too.
Then again I doubt this is limited to CAL.
And let’s not forget those same ex-employees and current employees coming back with suitcase upon suitcase and going through “nothing to declare” line at customs…..raised my eyebrows so many times I look like I’ve had Botox!
That’s why the airline make a profit!! Bracka
I’d like that KX if they are giving away tickets start allowing Government Scholarship students fly on standby for free, as it stands the student has to take their funds and buy a ticket from KX if they are flying via them when that money could have been used to help offset their students cost, since the Government has a cap of only CI$20k towards Scholarships.
The really sad part about this all is that the employees get paid marginal salaries and dont get free flights for life when they actually work and contribute to maintaining CAL. This board practise should be stopped immediately. The senior management that defended this to PAC are so easily swayed that they dont even stand up and do whats rights for the country. they are all power hungry ex-Air Jamaica employees now status holders that now depress caymanians and tow the line.
Anything free is going to be abused, so said so done.
Yeah I completely agree, we should should shut KX down, why don’t we have a referendum on that?
Sure, shut them down and then we have almost 300 more people out of work. We cannot even sustain the unemployed now or manage the crime that desperation and unemployment is contributing to. I am sure there is a better way than to shut down the airline.
i boycott cal whenever i can……fed up of being ripped off every time i fly…….
don’t even get me started on their nonsense seat ‘sales’………
That why I don’t support or fly with cayman airways as I don’t approve of government subsidies.
No wonder the airline cannot make any money. Flying full of non paying passengers. Shame and disgrace.
CAL is a political football full of votes but run by a core group of political bobble heads, loyalists and the Cayman Airways Pilots Association. Successive governments do not seek any value for money and continue to provide over 20 million in annual subsidies without holding the management and board to any standards of accountability. It is a complete joke and no one is interested in stopping the waste.
CNS please print the names of all persons on the board who are getting the travel benefits past and present.
Absolutely 7.49am. Simply stop giving them free flights. Send them a letter; send them an email – just put a notice in the paper – “Going forward, you will not be getting any free flights”. Let’s see who has the NERVE to take CAL to court……
If CAL is a political football who better to chair it than the CIFA auditor.
Look at the statistics on flights to Cayman Brac of non revenue passengers. Then compare statistics of flights out of Cayman Brac to gates in the USA. A complete waste of money. Moses Kirkonell and his crew are looking more like Air Jamacia in the butch years everyday. PPM wasting more money just like the last time
Solution— If you are a board member you get a free ticket for every meeting that you attend. So if in your 2 or 3 year appointed term you went to only 10 meetings then you get 10 free tickets. Simple logic or pay them a small stipend.
Why is it that in the Cayman Islands one half of the population have to pay for the other half?Unfortunately, it is the poor that Have to struggle to pay for the rich. Are these people and their families entitled to this benefit for service to their own country? As for the former employees, hell they were paid for the services. Tickets on CAL are ridiculously expensive so this nonsense needs to stop.
“During the course of the committee meeting the members heard that CAL has finally begun to make an operating profit but it is still reliant on the more than $21 million government subsidy each year to support certain routes or cut fares to attract tourists”
WHAT??!!! How the heck can you say you are making an operating profit when you are supported by a $21 MILLION subsidy from CIG?
Just Another Day in Absurdistan
Jamaicanomics
they say they make a profit because the subsidy is not regarding as an expense. we call it doctoring budgets.
With a $21M subsidy from government, this means, in real terms, that the tax paying citizens of the Cayman Islands are paying for the CAL directors’ free flights. Add to this the CAL benefits given to the employees at Health City and what you get is. . .
Please do tell what benefits Health City is getting on CAL so I can use them seeing as I work at Health City and am aware of no such benefit.
Utterly ridiculous and outrageous.
It all looks like corruption masquerading as nepotism. Everyone realizes this is our money that is getting handed around like it falls off trees, right?
More sensless squander we the public have to cough up for. Bet this only the tip of the iceberg, what about the CAL “friends and family club”?
Worse thing is that most of these free seats are in business class too. This class is only for CAL freeloaders!
How is this news? Every single airline in the world give free tickets to their board/staff.
Though not every airline pays for this by taxpayer subsidies!
Really? I was discussing this issue with a former employee of an airline who confirmed she does not get free / discounted flights with that airline. As for the pretend reservations, perhaps they need to investigate further….
Cayman Airways should be closed down.
Okay, so to put some figures in to perspective.
The average cost of a CAL ticket is around $375KYD (economy). And according to this approximately 250 are issued annually for the purpose in question – that is $93,750 per year. And we do not know the number of “upgrades” given away.
The issue is that these board members get “confirmed seating” – meaning they fly free whether or not there are available seats, so the short answer is “yes”, there is lost revenue although no one has investigated the amount.
And when you are sitting on the “deficit” side of business; every lost dollar is a good dollar to find.
While I commend CAL for trying to offer whatever they may, “not incurring any additional DIRECT cost” is an unacceptable excuse.
Giving away unnecessary free flights while in the red and being subsidized by Government is not particularly sensible, or at least the “life time” flights are definitely not sensible.
It is unbelievable that the airline executives are considering only the costs associated with the ticket itself – let us factor in admin time for booking and processing the “free” ticket – then the paper, the time to checkin the free-flying passenger, the security considerations, the onboard amenities being used (drinks, toilet paper, cups, napkins, seat cleaning, stewardess attention etc.)
There is a lot more to giving away a “free ticket” than just the cost of the ticket; and, any good business person would know that the cost of providing a service is more than just the service; it is all the time and additional material that goes in to making that service possible.
For pete’s sake, private businesses charge per sheet of SCANNED paper sometimes not to mention what is printed!
Goodness, and we wonder why they cannot overcome this… poor Cayman, wow.
It still just all seems like common sense, I can only shake my head.
You were on such a roll until you got your economics screwed up.
You can’t add the cost of service to the price of sale to estimate the cost of a free gift!!!!
What you are saying is that giving away an item of grocery that Fosters sell for $2, costing $1 to buy, ship and store and $0.50 by way of overhead allocation is worth / would cost Fosters $3.50!!! Nope!
Given that the airline runs at a loss then it is true that all the costs you mention (and others that you have understandably not tried to list) exceed the price of a ticket but that is the true cost of these gifts… the greater of the cost of provision or the opportunity cost of a replacement buyer.
Like you said, Cayman Airways runs at deficit so it is safe to say my economics are not screwed from a ‘how much they are losing’ perspective and I was not attempting to portray myself as a seasoned economist, I am simply pointing out that there is more to the free ticket than the cost of the seat on the plane 🙂
Aaaaaah, now that I am able to type at my computer versus on my phone whilst doing one hundred other things I can better address this – I fear that you are confusing calculating the cost of a ‘service’ with the cost of a ‘product’.
Foster’s calculating the price of a tin of tuna is much different from a law firm calculating the cost of their attorneys time and value of work and materials that go in to producing the said work/service.
Yes, to calculate the final consumer price of a product you would factor – actual cost + tax + shipping + local duty + whatever else (labor if it will be made etc) + a margin (whether amount or percentage) for profit = consumer price.
However, when setting the price of a service, it is very different and much more complex, hence me going in to details about what else happens in the backdrop of a ticket purchase and avoiding going in to any heavy “economic” jargon, analysis, breakdown, or whatever else that may have been helpful for me to discuss.
I am stating quick thoughts and opinions here hun, and even my 10 paragraph comments are simply thoughts (like everyone else) and I type them in a matter of minutes (75 WPM is my typing speed; so please excuse any errors, bad grammar, missed punctuation, omission, etc – in fact going forward I will put this as a disclaimer because I rarely reread these before hitting submit as I have many more things to do).
Anyway, moving on…
If a ‘free gift’ is to be a service (say a pro bono from an attorney) the attorney will usually do the work for free (aka waive their actual hourly fee) BUT still charge for the paper, supplies, court fees etc.
In Cayman Airways’ case – they are waiving everything except the government tax.
Whereas; if they considered all else that takes place from the sale of one ticket and all other overheads involved; perhaps a “free ticket” would be a bit different; for example, the estimate for the actual “seat” and “transport via plane” would be calculated and waived, BUT then the person is responsible for, let’s say, an “administrative or service charge” of $100 as an example.
If we continue to drive down to calculating the cost of SERVICE versus the cost of PRODUCT – we can also consider the Trade & Business licensing incentive by the DCI for another example – they have waived the cost of the actual license, BUT, they have maintained that the administrative fee of $75KYD must be paid. The administrative fee obviously covers any labor, board time, stationary etc that goes in to the actual processing of the “free license”.
So, obviously, economics is a bit too much of a complicated issue to raise as a common poster on CNS; but, I love that you caught that because it shows that there are people awake out there.
That is correct its more than just a free ticket, remember every lb.loaded on to the plane is more fuel so it is not free, the paying passengers has to pay for the free loaders and their baggage etc, etc, etc such as the time it takes to get these people and their baggage on board and off the plane causes the plane to be delayed lots of time. that is why the U,S. airlines changes extra money for every piece of baggage for it causes more money in fuel.
Absurdistantastic. Piggies at the trough with their piglets and Mrs Piggy.
One ex Board member was a senior civil servant who always managed to get herself appointed to the CAL Board as part of her responsibilities. So she and her husband, also a senior ex civil servant and so both recipients of salaries paid by the general public, have free travel for life. Isn’t there something seriously wrong about that?
Yes, there is a lot wrong with that and it hurts even more when we know who they are and how incompetent they both were in their highly paid government posts.
If these two had spent less time trying to extract more salary and pension benefits out of government for themselves and more time doing what they were paid to do the country would be far better off today.
Amen,1:15, as the Seventh Day Adventists she used to employ without going through the normal recruitment processes would say!
It’s no damn wonder CAL can’t make a profit!! I can bet that seats are filled up with comp tickets and paying passengers can’t get confirmed!! Boy I tell you only in the CI. I can understand the Board Member, but family members too?? This is totally unacceptable and should be corrected asap.
One director allegedly flies to Florida with his son every weekend , now that is abuse.
To make an even playing field, Liquor board members should be allowed to drink for free in bars, Port Authority members import all goods duty free, members of prison boards and their families exempted from incarceration for life, Central tenders members can award contracts to whomever they please, and Planning board members, …..well no comment.
Exactly as it is
Directors free travell, most of them are already millionaires & if not.have contracts with CAL.
This is another example.of the corruption in our Government boards.
Solution in a board member you get discount on tickets not free tickets at all!!
Now for the CAL staff, they also get a discount but if a pilot and or flight crew they can fly for free.
Or let’s just sell CAL to Dartford or Virginia Air!!!!
this is way way too outrageous really. a small Air line like this it just too much . Maybe free/half price while you are employed but after you leave come on now get real no darn wonder CAL is losing money!!!!!!!
Fine if CAL wants to offer perks but within reason – each ex/board member only (or plus on only) and limit to a stipulated number of times per year. Each one of them plus immediate family taking up confirmed seats is lost revenue and it just isn’t commercially sensible. CAL gets kudos for its corporate social responsibility as they offer concessions other airlines don’t and they sponsor so many worthwhile community initiatives but they are a business and have to tighten up to turn a profit. They serve the community when other airlines pull out due to bad weather and trust me when you are away and tired and just want to get home, seeing that Sir Turtle on the tail is an amazing feeling but if we love our airline so much we should want it to be profitable.
So, would they need the subsidy if all these hangers on paid the proper prices? This kind of thing is ancient history elsewhere. I get the discounts whilst working there, but damn, really? Anywhere else your benefits end with your job…
The Cayman Islands leadership only knows how to spend money. They shouldn’t be trying to operate an airline. There are a number of airlines that would be happy to take over Cayman Airways. Why not let them! Stop wasting our money!
Name just one! No one in their right mind would take on this debt or routes.
According to the Compass Fabian Whorms also told the PAC that CIG funding enabled the national airline to set the price point that other carriers had to follow, ensuring low fares into the Cayman Islands from all airlines operating out of gateway cities.
I’ve read some BS from CAL in the past that pretty much beats all. The reality is that CAL (or strictly speaking CIG) are being forced to set their fares at the levels of JetBlue, AA, Delta, et al not the other way round. In fact it’s the major carriers that set the price points not a piddly little outfit with four antiquated jets.
If Moses and Whorms seriously think that CAL’s fare policy has any effect on an $11billion company like AA they should be locked up somewhere for their own safety.
I don’t claim to be an expert on US law but the way I read it any major US airline could get CAL’s North American services shut down tomorrow by simply complaining that they were selling tickets in the USA below cost using a foreign government subsidy. The fact that none of them can even be bothered to do this speaks volumes.
You are wrong. Treaties force companies not to undercut CAL. Otherwise the fares would be much much lower on the decent airlines.
What treaties? It’s a free and unregulated market.
1:00 I think you’re getting confused with codeshare agreements here. CAL works with BA but if you choose to fly LHR-MIA-GCM rather than using the ‘direct’ service via Nassau opting for BA’s codeshare partner AA on the MIA-GCM leg works out around $100-$120 cheaper than using CAL. That’s sounds like undercutting to me.
One should not get on here writing about things they know nothing about. If you think it BS that CAL keeps the prices down ask the folks in Turks and Caicos how much they pay for a ticket to Miami on AA. Weather you have the sense to understand it or not I don’t know but it is a fact that CAL does keep the prices down because if it wasn’t for CAL flying the Miami route you would be pay 3 times what you pay now.
We are paying 3 times as much….just by way of Govt. subsidies.
The best thing we could do is to shut KX down and use the subsidizes for marketing Cayman and educating our people……….. this will much better serve us than subsidizing KX $20+ mil to bring only approximately 5% or less stay over tourist. yes 5% or less stay over tourist……….. Don’t let that silly white head politician from the Brac tell you any different, so to explain it in layman terms the Government finds it fit to subsidize KX to run your silly backside up and down Miami and wherever else they fly.
Ask yourself a simple question, would you prefer a cheap airline seat or an educated child?
Shut it down, tomorrow and we’ll be better off……..
You should check your facts before posting on here. PLS-MIA return on AA in October is $345 economy. CAL GCM-MIA return on the same dates works out $343.81 economy (AA is $344). So what you’re saying about high fares out of PLS is nonsense.
In addition people in TCI aren’t having to subsidise their flights through government handouts.
And it’s spelt ‘whether’ not ‘weather’.
the thing i hate most is the fact that no airline can undercut caymanirways on the fares….
which means we are locked into a lifetime of getting ripped off everytime we fly from cayman…..
as proven by low cost carriers worldwide….low fares = more tourists….
I think the truth is US airlines know CAL are operating at a loss and simply can’t be bothered to undercut them. There also isn’t a heck of a lot of real competition on the various routes in and out of the USA because we are not a high volume destination (and CIG is a pain in the butt to work with anyway!) so there’s no incentive for budget carriers to come here. The major US carriers dominate this route and set the fares at a commercially viable level – get used to it.
CIAA landing fees are the reason airfares are so high. Passengers pay the fees and “facility taxes” in each ticket, but unlike the foreign airlines, CAL doesn’t remit these passenger fees on to CIAA. CAL knows that CIG will eagerly reshuffle its portfolios every couple years to hide the $20mln hole that results. This is additional to the annual subsidies. Worse, this habit of CIG bailing out CAL is so routine that CIAA has already counted this sizable balance sheet receivable as part of their airport reno budget = 30% of the cost. CAL knowing the CIG will always retire these debts have boasted about being “profitable” and ordered new planes!
cal sums up everything wrong with cayman….5 star price for 3 star service….
11:12 – you just got the comment of the day award. Spot on! Tourists have to pay premium hotel rates for motel-standard rooms, they get ripped off everywhere and the national airline wouldn’t be out of place in some third world s***hole.
privatise caymaniarways now! an airline that loses money by charging people $450 for 1 hour flights to miami needs to be shut down asap…….
as part of sale…the purchaser must reatin cayman logo on its planes….
they must gurantee airlift in time of hurricane….
cal is like a bad joke….that everyone keeps paying for…..
Agree..time to privatize . If only there was a billionaire resident who is building hotels and buying others that would benefit from a more professionaly run national carrier
How long was the waiting list for board membership?.
Just shut it down. It would be cheaper to give every employee a decent redundancy pay off than keep this mess going on.