Caribbean Airlines Limited

5th REPORT OF THE

An Inquiry into the Administration and

Operations of Caribbean Airlines Limited.

September 2017

5th Report, JSC State Enterprises - CAL

An electronic copy of this report can be found on the Parliament website: www.ttparliament.org

The Joint Select Committee on State Enterprises

Contact the Committees Unit Telephone: 624-7275 Extensions 2828/2309/2283, Fax: 625-4672 Email: [email protected]

5th Report, JSC State Enterprises - CAL

Joint Select Committee on State Enterprises

An Inquiry into the Administration and Operations of Caribbean Airlines Limited

Fifth Report 2016/2017 Session, Eleventh Parliament

Report, together with Minutes

Ordered to be printed

Date Laid Date Laid

H.o.R: Senate:

Published on ______201__

5th Report, JSC State Enterprises - CAL

The Joint Select Committee on State Enterprises Establishment 1. The Joint Select Committee on State Enterprises was appointed pursuant to the directive encapsulated at section 66A of the Constitution of the Republic of Trinidad and Tobago. The House of Representatives and the Senate on Friday November 13, 2015 and Tuesday November 17, 2015, respectively agreed to a motion, which among other things, established this Committee to inquire into and report to Parliament on State Enterprises falling under its purview with regard to:  their administration;  the manner of exercise of their powers;  their methods of functioning; and  any criteria adopted by them in the exercise of their powers and functions.

Current Membership 2. The following Members were appointed to serve on the Committee:

Mr. David Small Dr. Lester Henry Mrs. Cherrie-Ann Crichlow-Cockburn Mr. Wade Mark Mr. Adrian Leonce Mr. Fazal Karim Brig. Gen. (Ret.) Ancil Antoine Mrs. Allyson Baksh

Chairmanship 3. At its first meeting held on Wednesday December 02, 2015, the Committee elected Mr. David Small as Chairman, pursuant to Standing Orders 99(5) of the Senate and 109(5) of the House of Representatives.

Powers 4. The committee is one of the Departmental Select Committees, the powers of which are set out principally in Standing Orders 91 and 101 of the Senate and 101 and 111 of the House of Representatives. These are available on the Internet via www.ttparliament.org.

Secretarial Support 5. Secretarial support was provided by Mr. Brian Caesar, Clerk of the Senate, who served as Secretary to the Committee, Ms. Sheranne Samuel, Assistant Secretary and Mrs. Krystle Gittens, Graduate Research Assistant.

Contacts 6. All correspondence should be addressed to the Secretary to the Joint Select Committee on State Enterprises, Level 3, Tower D, Port of Spain International Waterfront Centre, 1A Wrightson Road, Port of Spain. The telephone number for general enquiries is 624-7275; the Committee’s email address is [email protected]. 5

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Table of Contents

THE JOINT SELECT COMMITTEE ON STATE ENTERPRISES ...... 5 TABLE OF CONTENTS ...... 6 GENERAL FINDINGS ...... 7 SUMMARY OF RECOMMENDATIONS ...... 8 REPORT SUMMARY ...... 11 CHAPTER 1 ...... 12

1 INTRODUCTION ...... 12 CHAPTER 2 ...... 19

2 KEY ISSUES, FINDINGS AND RECOMMENDATIONS ...... 19 APPENDICES ...... 1

APPENDIX I ...... 2 MINUTES OF PROCEEDINGS ...... 2 APPENDIX II ...... 14 VERBATIM NOTES...... 14 APPENDIX III ...... 184 ANALYSIS OF CAL FINANCIALS ...... 184 APPENDIX IV ...... 186 CORRESPONDENCE BETWEEN JSC ON NATIONAL SECURITY AND INLAND REVENUE DIVISION ...... 186 ...... 189 APPENDIX V...... 190 ATTENDANCE REGISTER ...... 190

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General Findings

1. The Committee noted that CAL has consistently failed to adhere to reporting timelines. This affects the ability of its line Ministry, to adequately monitor and evaluate operations. 2. The Committee noted that despite the issues experienced with customer service, CAL still benefits from a level of brand loyalty that may be leveraged. 3. The Committee noted that the contents of the Lufthansa report are valuable, and believes that the recommendations therein will steer CAL toward profitability. 4. The Committee noted that the major issues with the CAL fleet circulate around safety/reliability of aircraft, and upkeep of aircraft. 5. The Committee noted that CAL is struggling to manage instances of fraud. 6. The Committee noted that CAL is owed a significant amount by Venezuela. 7. The Committee noted the burden that servicing the domestic air bridge has placed on CAL’s profitability. 8. The Committee noted that CAL’s human resource focus is skewed towards pilots and management. 9. The Committee noted that several positions in the organisational structure are filled by individuals who do not possess the required qualifications. 10. The Committee noted that CAL has permitted excessive use of the flight “jump seat” by staff, for personal travel. 11. The Committee noted that CAL has failed to pay to the Board of Inland Revenue (BIR) “benefit in kind” taxes due in connection to the “jump seat” flights by staff. 12. The Committee noted that CAL needs to conduct a manpower needs analysis, in parallel with a route and flights rationalisation exercise. 13. The Committee noted that CAL has made efforts to recruit foreign pilots, despite the over- supply of local pilots.

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Summary of Recommendations

The following is a summary of the recommendations proposed by the Committee for the efficient operations of the Caribbean Airlines Limited (CAL):

Management/Staff Matters

1. CAL should fill the Chief Financial Officer (CFO) and Chief Executive Officer (CEO) positions. 2. CAL should follow through with plans to conduct a manpower audit to review and re- adjust the management structures. 3. CAL should ensure that any employee continuing to be employed by the company on contract after retiring at age 60 should be paid at the base level of the position. This should be implemented with immediate effect. 4. CAL should ensure that with immediate effect, any employee continuing to be employed by the company on contract after retiring at the age of 60 should have no seniority of any kind over employees below the official retirement age. 5. CAL should undertake all necessary actions over the next six (6) months to complete the process of the retirement of all position holders who are over the age of 60.

Operational Matters

6. CAL should urgently conduct a route analysis with a view to a reduction and or elimination of services to some North American destinations where over the past five years there has been an unabated trend of declining passenger numbers and massive financial losses. This should be completed within the next three (3) months. 7. Regarding flight operations, CAL should, as far as practicable, implement the recommendations contained in the Lufthansa Consulting report, inclusive of the replacement of the unreliable and extremely troublesome ATR aircraft. This process should begin with three months of the date of this report. 8. CAL should commit to the refurbishment and modernization of its fleet. 9. CAL should commit to finding the root cause of the issues with the ATR aircraft. 10. CAL should continue to adopt the key recommendations provided in the Lufthansa reports, which will assist the company towards achieving profitability by 2018.

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Administrative Matters

11. CAL should commit to improving its timeliness with regards to submission of reports and financials. 12. The implementation of additional features of the PSS will further aid CAL in improving customer service. 13. CAL should continue to work with relevant bodies to mitigate the risk of fraud by implementing all necessary security measures. 14. CAL should pursue measures to recover money owed by Venezuela. 15. CAL should maintain persistence with respect to following up with the Ministry for approval of its strategy for resolving the issues with fare structuring for the Tobago air bridge service. 16. CAL should immediately put in place a freeze on any increases in wages and salaries until such time that the operations of the airline is sustainably profitable. 17. CAL should immediately cease the practice of annual incentive or merit payments given the current unprofitable status of the company. Consideration of re-introducing such payments in the future should be based on the sustained profitability of the company and should also be subject to approval by Corporation Sole. 18. The “pilot focus” of the airline must change to being “stakeholder focussed”. The extent to which the ingrained internal practices of the airline regarding seemingly “preferential” treatment for pilots must end immediately. Such practices as providing salary and other payment increases to pilots with no commensurate adjustment for other staff is demoralising, counter-productive and must end immediately. 19. CAL should immediately communicate with the Board of Inland Revenue regarding their likely action on CAL’s failure, since its inception, to adhere to the regulations surrounding benefit-in-kind taxes due to the State as it relates to the use of the cockpit “jump seat” by staff for personal trips. 20. CAL should take all necessary steps regarding the recovery of any taxes due to the BIR from staff members who have utilised the cockpit “jump seat” privilege in an excessive manner. This should be done immediately. 21. The Board of CAL should take immediate action regarding the holding of positions by persons who, in many cases, are woefully unqualified, on the basis of CAL’s stated

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requirements for the posts. This breach of good business practice must be rectified within 6 months.

Pilot Matters

22. CAL should introduce a mentorship programme between senior pilots and junior pilots, to ensure sufficient knowledge transfer takes place by the time senior pilots attain retirement age. This step will resolve the need to rehire retired pilots. 23. CAL should apply a new process to manage use of the “jump seat” for personal use by CAL staff, with such staff members being liable to pay all relevant taxes associated with the flight sector(s) involved. This should be implemented with immediate effect. 24. The first 20, “jump seat” uses for personal reasons must be deducted from that employees’ annual allotment of 20 free travel passes. Thereafter, for pilots only, there will be a limit of up to 20 additional personal “jump seat” trips allowed per year. This should be implemented with immediate effect. 25. CAL should immediately cease all efforts regarding its international recruitment of foreign pilots. Given the many local pilots seeking jobs, a report on how this came to be should be provided to this committee as well as its line Ministry.

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Report Summary

This report examines the Administration and Operations of Caribbean Airlines Limited (CAL). Focus is given to the long standing, and present issues and challenges faced by the Company. Recommendations are proposed by the Joint Select Committee on State Enterprises which are intended to steer CAL to a more efficient and effective management of its operations.

CAL’s prolonged struggle to achieve profitability, along with its burden on the State, drew the attention of the Committee. For those reasons, this report outlines CAL’s current position and the measures needed in order to achieve the recommendations outlined in the Lufthansa Report, completed for CAL,

The intended role of CAL as a State Enterprise makes it important to understand the interaction between CAL, its line ministry, the Ministry of Finance (MOF), as well as with the Trinidad and Tobago Civil Aviation Authority (TTCAA). Consequently, this report examines whether there is sufficient interaction and support being provided to CAL by both bodies.

Based on the foregoing, there are many issues facing CAL, as a result the Committee has submitted recommendations to treat with these issues as outlined hereunder.

5th Report, JSC State Enterprises - CAL

CHAPTER 1

1 Introduction

1.1 Caribbean Airlines Limited (CAL) 1.1.1 Caribbean Airlines Limited (CAL) was incorporated on September 27, 2006 as a wholly owned State Enterprise1 and began flight operations on January 01, 2007. CAL replaced the now defunct British West Indies Airways Limited (BWIA) and has assumed control of the assets of BWIA. The cost of the transition from BWIA to CAL was estimated at US$359.9 million and involved terminating the employment contracts of all BWIA staff; settling all bona fide liabilities, restructuring the existing infrastructure and commencing the operations of the new airline.2

1.1.2 CAL is the national airline of Trinidad and Tobago with its main hub located at the Piarco International Airport, Trinidad. On October 1, 2007, CAL acquired all of the issued share capital of Tobago Express Limited and assumed responsibilities for the operation of the domestic route, previously undertaken by Tobago Express Limited.

1.1.3 In 2011, due to the acquisition of specific routes of Air Jamaica, the ownership of CAL is now 84 percent GORTT and 16 percent Government of Jamaica.

Corporate Governance 1.1.4 The Airline is managed by a Board of Directors headed by a Chairman and an Executive Management Team headed by a Chief Executive Officer.

1.1.5 CAL falls under the purview of the Ministry of Finance. This Ministry is responsible for overseeing and guiding the operations of the airline.

1 State Enterprises Investment Programme 2016, http://finance.gov.tt/wp-content/uploads/2015/10/SEIP-2016.pdf 2 The Parliamentary Debates Official Report In The Fifth Session Of The Eighth Parliament Of The Republic Of Trinidad And Tobago Which Opened On October 17, 2002 http://www.ttparliament.org/hansards/hh20061201.pdf 12

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Destinations 1.1.6 CAL operates more than 600 weekly flights to 19 destinations in the Caribbean, North and South America.

1.1.7 The Airline’s Annual Administrative Report (2008) (most recent on the Parliamentary Record) indicated that the Airline’s ‘On Time Performance’ (OTP) and rate of mishandled bags exceeds industry standards. Pre-flight Services 1.1.8 The Airline provides customers with the options of telecom, “walk-in”/front desk and online services for ticket purchases. With respect to walk-in services, in 2017, CAL opened a sales and ticket office at Upper Level, The Parkade, Corner of Queen and Richmond Streets, Port-of-Spain, featuring state-of-the-art technology such as internet kiosks for ticket booking and online check-in. Online check-in allow passengers to check in for flights and print boarding passes from the comfort of their homes, offices or anywhere with an internet connection. On-board Services 1.1.9 In addition to the standard ‘in flight’ services, the airline offers customers the option of submitting their special dietary requirements (namely diabetic and vegetarian) prior to the flight so that special catering arrangements can be made3. Post-flight services 1.1.10 Additionally, customers enrolled in the Airlines “Frequent flyer Miles” programmes benefit from various rewards including; flight upgrades, preferential check-in and fee waivers. Financial Management 1.1.11 CAL’s 2013 Annual report and financials provided some insights into some of the airline’s major costs and financial obligations that are associated with its operations. Those identified were:

1. Aircraft heavy maintenance and repairs

3 http://www.caribbean-airlines.com/index.php/products-a-services/overview 13

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There are certain routine maintenance procedures that aircraft must undergo periodically, one of these is the C-Check. A C-Check on aged aircraft is conducted every 18 months and the procedure may last up to 5 weeks. In 2008 it was reported that cost savings of US$400,000.00 were realised when “heavy maintenance” checks were returned to Trinidad after a seven (7) year hiatus4. Maintenance costs for 2013 stood at $386,465,000.00.

2. Fleet On Wednesday, January 13, 2016, CAL discontinued flights to London due to “costs associated with maintaining the Boeing 767 aircraft operation”5 The Airline’s fleet of 17 is now comprised of 12, Boeing 737-800 and 5, ATR72- 600 aircraft6.

3. Fuel CAL’s operating fuel expenses fluctuate with World prices.

4. Employee salaries and benefits CAL employs more than 1600 people.7 Total staff costs amounted to $463,718,000.00 in 2013. This includes bonuses, NIS contributions, annual leave, medical care, and loans.

5. CAL’s revenue is derived from:  Passenger ticket sales;  Aircraft charters and leases;  Cargo and mail;  Property income;  Club Caribbean Membership Fees;

 Among other sources

4 Caribbean Airlines looking to break even for 2008, Trinidad and Tobago Newsday Newspaper: http://www.newsday.co.tt/news/0,82668.html Accessed 20 March 2017 5 Last CAL flight from London, Trinidad and Tobago Guardian Newspaper, http://www.guardian.co.tt/business/2016-01-12/last-cal-flight-london Accessed 20 March 2017 6 Caribbean Airlines: Our Story https://caribbean-airlines.com/#/caribbean-experience/our-fleet Accessed 20 March 2017 7 Caribbean Airlines: Our Story http://www.caribbean-airlines.com/#/caribbean-experience/our-story Accessed 20 March 2017 14

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1.2 Rationale for inquiry 1.2.1 Based on the foregoing and considering: 1. the operation of the Airline is a significant financial cost to the State;

2. the Airline has been experiencing significant challenges in relation to its ATR Fleet; and

3. the Airline has experienced frequent changes at the Executive level, particularly in relation to the position of CEO.

1.2.2 An inquiry into the Company’s administration and operations was deemed urgent to safeguard and preserve its long-term viability.

1.3 Objectives of the Inquiry 1.3.1 At a meeting held on April 15, 2016, the Committee agreed that the following would be the objectives of the inquiry:

1. To examine the management structure in place at the Airline and to assess how effective it is in terms of ensuring transparency, accountability and value for money;

2. To gain insight into the Strategic Direction of the Airline and its plans to treat with its challenges;

3. To identify the factors which may be contributing to the inefficiency in operation and financial losses of the Airline;

4. To obtain information on the status of the Airline’s operations; and

5. To assess the effectiveness of the Airline’s policies and strategies for Customer Services.

1.3.2 On November 04, 2016, the Committee agreed that at its next meeting, it would commence an inquiry into the operations of Caribbean Airlines Limited (with specific focus on Customer Services)

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1.4 Conduct of the Inquiry 1.4.1 On January 09, 2017 a public hearing was held with representatives of Caribbean Airlines Limited (CAL), at which time the Committee questioned the officials on the various matters in connection with the inquiry objectives.

1.4.2 Officials from Caribbean Airlines Limited (CAL): Mr. Shameeer Mohammed Chairman Mr. Michael Quamina Vice-Chairman Capt. Jagmohan Singh Chief Executive Officer (Ag.) Ms. Marina Chase Chief Financial Officer (Ag.) Mr. Colville Carrington VP Maintenance and Engineering Ms. Hyacinth Guy VP Human Resources Mr. Sean Quong Sing VP Commercial (Ag.)/EM Revenue Network & Distribution Ms. Nalini D. Lalla General Counsel and Corporate Secretary Mr. Adrian Agarrat Senior Manager Financial & Revenue Accounting Ms. Dionne Ligoure Head Corporate Communications

1.4.3 Officials from the Ministry of Finance: Ms. Lisa Phillips Permanent Secretary (Ag.) Mr. Lester Herbert Director, Central Audit

1.4.4 Prior to the public hearing, notice was given as to the general objectives of the inquiry and in response, written submissions were received from the CAL on January 27, 2017. These responses provided a frame of reference for the questions posed during the hearing.

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1.4.5 During the public hearing the Committee proffered supplementary questions for written responses to be obtained subsequent to the hearing. These responses were received from the CAL on March 6, 2017.

1.4.6 On March 13, 2017 a second public hearing was held with representatives of Caribbean Airlines Limited (CAL), the Civil Aviation Authority (TTCAA), and the Ministry of Finance at which time the Committee continued questioning the officials on the various matters in connection with the inquiry objectives.

1.4.7 Officials from Caribbean Airlines Limited (CAL): Mr. Michael Quamina Vice Chairman Capt. Jagmohan Singh Ag. Chief Executive Officer Ms. Marina Chase Ag. Chief Financial Officer Mr. Colville Carrington VP Maintenance & Engineering Ms. Hyacinth Guy VP Human Resources Mr. Sean Quong Sing Ag. VP Commercial and EM Revenue Network & Distribution Ms. Kristy Kanick Legal Counsel & Assistant Corporate Secretary Mr. Adrian Agarrat Senior Manager Financial & Revenue Accounting Ms. Dionne Ligoure Head Corporate Communications

1.4.8 Officials from the Ministry of Finance: Ms. Lisa Phillips Permanent Secretary (Ag.) Mr. Lester Herbert Director, Central Audit

1.4.9 Officials from the Trinidad and Tobago Civil Aviation Authority (TTCAA):

Capt. Thomas E Lawrence Chairman, TTCAA Mr. Francis Regis Director General (Ag), TTCAA

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1.4.10 Following the public hearing the Committee proffered supplementary questions for written responses. These responses were received from the CAL on March 27, 2017, April 03, 2017, April 21, 2017 and May 01, 2017.

1.4.11 On May 08, 2017 a third public hearing was held with representatives of Caribbean Airlines Limited (CAL) at which time the Committee continued questioning the officials on the various matters in connection with the inquiry objectives.

1.4.12 Officials from Caribbean Airlines Limited (CAL) Mr. Shameer Mohammed Chairman Capt. Jagmohan Singh Ag. Chief Executive Officer/VP Operations Ag. Chief Financial Officer/Senior Manager Ms Marina Chase Treasury

Mr. Colville Carrington VP Maintenance & Engineering

Ms. Hyacinth Guy VP Human Resources Ms. Nalini D. Lalla General Counsel & Corporate Secretary Ms. Dionne Ligoure Head Corporate Communications Senior Manager Financial & Revenue Mr. Adrian Agarrat Accounting 1.4.13 Officials from the Ministry of Finance: Ms. Lisa Phillips Permanent Secretary (Ag.) Ms. Mala Mohammed Senior Business Analyst (Ag.)

1.4.14 The Minutes of the Meetings during which the public hearings were held are attached as Appendix I and the Verbatim Notes as Appendix II.

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CHAPTER 2 2 Key Issues, Findings and Recommendations

2.1 The Key Issues/Challenges and Findings 2.1.2 The Committee noted the following as the key issues and challenges facing Caribbean Airlines Limited (CAL):

Transparency, Accountability and Value for Money 2.1.3 According to submissions dated July 7, 2016, CAL uses monthly variance analyses of each department against respective approved budgets to ensure financial transparency, accountability and value for money.

2.1.4 CAL’s finances are overseen and audited both internally and externally. All significant findings and recommendations stemming from audits are reviewed and addressed.

2.1.5 Additionally, there is a procurement policy called the Purchase to Pay Policy (P2P) and Delegation of Authority Guidelines (DOAG) that are strictly adhered to.

2.1.6 However, the Committee noted that there were significant delays with respect to CAL’s submission of Annual Reports and Audited Financial Statements.

2.1.7 By the end of the inquiry, the Committee still had not received all outstanding reports and financials.

Customer Services 2.1.8 According to submissions dated July 7, 2016, CAL’s Customer Service Plan was developed utilising DOT (US Department of Transportation) guidelines.

2.1.9 CAL’s Key Performance Indicators (KPIs) with respect to customer service were stated as “few or no customer claims in the following areas – Baggage; Airport Handling; Reservations; Catering; In-Flight Service; Overbooking/Denied Boarding; Schedule Change/Delay/Cancellations.”

2.1.10 In December, 2015, CAL upgraded its Passenger Service System (PSS). The utilisation of the new PSS has aided in identifying customers and has boosted the efficiency of the airline.

2.1.11 However, the lack of new and efficient equipment on the flights such as upgraded chairs has decreased the Customer rating of CAL.

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2.1.12 Consideration has been given to improving the interior of the aircraft and modernising the current equipment.

2.1.13 With respect to challenges faced during the upgrade of CAL’s frequent flyer programme, assurance was given that issues have been resolved.

Profitability 2.1.14 Based on analysis of CAL’s 2013 financial statements (most recent available to the Committee), the airline is in an extremely vulnerable position.

Ratio Analyses of CAL - Financial Statements Dec 31, 2013 Ratio Calculation Result Source Consolidated Current Assets /Current Liquidity Ratio 51% Statement of Financial Liabilities Position. Consolidated Statement of Financial (Net Income + Position and Solvency Ratio Depreciation)/Total -10% Consolidated Liabilities Statement of Comprehensive lncome. * Source: CAL Financial Statements December 31, 2013

2.1.15 According to submissions dated July 7, 2016, the factors contributing most to CAL’s financial losses are:

a. Frequent changes to the airline’s Governance leadership since it commenced operations in 2007. For example, there have been 3 Board of Directors, 4 Chairmen, 4 CEOs, 3 Acting CEOs, 4 CFOs, 2 Acting CFOs to date; b. Cash flow inefficiencies resulting from: i. financing the acquisition of a fleet of 5 ATR aircraft (initially intended to be a fleet of 9) using the Company’s cash reserves, and from short term cash investment; and ii. held cash in Venezuela, contributing to borrowing cost to cash flow operations c. Economies of scale that have impacted aircraft utilisation and unit cost efficiency on certain routes. 20

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d. Increasingly competitive environment with the entrance of low price competition in key demand markets (Jet Blue and West Jet) e. Air Services Agreements of CARICOM countries that do not recognise the International Civil Aviation Organisation (ICAO) Community of Interest Principle as well as the failure to date of CARICOM to implement a liberal Multilateral Air Services Agreement that allows flexibility to manage own networks.

2.1.16 CAL’s efforts to ensure profitability include:

a. Cost cutting initiatives b. Ancillary Revenue c. Passenger Service System (PSS) Implementation d. Fuel optimisation project e. Fleet reduction f. Increased utilisation of fleet g. Rebranding exercise h. Aligning the corporate culture to the brand i. Developing a deeper knowledge and understanding of CAL’s core and growth markets j. Developing a friendlier and more expansive website k. Developing an improved interactive loyalty programme l. Updating the network optimisation study following the reduction of the size of fleet m. Expand peak season to include June and September

2.1.17 Additionally, the wet lease agreement made for the 767 freight aircraft, has proven to be very profitable for CAL.

2.1.18 CAL’s 2016 figures have demonstrated improvement in its financial position, and point to progressive improvement in the upcoming years.

2.1.19 According to oral submissions during the public hearing on January 9, 2017, maintenance of the current financial trend would allow CAL to breakeven by 2018.

2.1.20 Additional issues that affect CAL’s profitability include:

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a. Agreement on arrears owed to the Trinidad and Tobago Airport Authority for the rental of space; b. Recovery of Venezuelan debt; and c. Instances of credit card fraud.

Fleet Management 2.1.21 The Committee is concerned by the number of in-flight incidents with the ATR fleet, which have even resulted in instances of flights being grounded..

2.1.22 Additionally, the incidents have inevitability forced the use of jets to compensate for scheduled flights, which can incur a triple cost as opposed to the use of the ATR fleet.

2.1.23 Unfortunately, in 2014/15, CAL’s previous board had relinquished its rights to sue the manufacturer of the planes, which has drastically reduced CAL’s ability to correct the issue of recurring flight incidents.

2.1.24 To add to the Committees concern regarding the number of incidents with the ATR fleet, there is the failure of the Trinidad and Tobago Civil Aviation Authority (TTCAA) to inform the public of issues being experienced with CAL’s fleet. This lack of transparency strikes the Committee as irresponsible, particularly as there may be safety concerns.

2.1.25 In relation the general upkeep of the fleet, the worn condition of the CAL older aircraft has had a negative effect on customer experience.

2.1.26 In response to this observation, CAL noted that “there is a lot more that we have to do…our fleet review that we are undertaking will certainly address those concerns in terms of the customer experience on board.”

2.1.27 Additionally, the Committee was informed that CAL will be moving its fleet towards two aircraft types, based on recommendations from concluded studies.

Strategic Direction 2.1.28 According to submissions dated July 7, 2016, in preparing its Strategic Plan, CAL sought the professional advice and input of ICF Aviation's Airline Partnership Consulting in 2014 in respect of its network, and Lufthansa Consulting Limited (LHC) in 2015 in respect of the overall direction.

2.1.29 The key features of CAL’s strategic plan were identified as:

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a. Developing a strong, competitive Brand for CAL b. The necessary corporate culture c. Meaningful Cost Management d. A profitable Air Bridge Operation e. The updated Network Plan f. Revenue Enhancement g. CAL Hub Strategy h. Shareholder Support both Financial and Non-Financial

2.1.30 The following recommendations were made for the 2015 strategic plan:

a. Stop all B763 operations and negotiate early termination of the leasing agreements b. Continue with a consolidation strategy based on a dual-base system in POS and KIN c. Increase the number of Q400 aircraft d. To complement above, shrink the B738 operations

2.1.31 The recommendations of the 2016 Strategic Plan include:

a. Complete a network optimisation study over next 3 years b. Concurrently complete a fleet review both turboprop and jet, which will determine fleet type and size, over the next 5 years. c. Conduct a new brand and culture transformation that will speak to the customer experience for the future. d. Simultaneous focus on cost management and revenue enhancement at all levels of the organisation

2.1.32 CAL’s main challenges were identified as:

a. Competition from the American Low Cost Carriers (LCC) b. Liquidity constraints. c. Inability to repatriate CAL’s revenue earned in Caracas, Venezuela d. Tobago air-bridge fare (below commercial market value) which is GORTT controlled. Further, as CAL is an essential service in respect of the operation of the 23

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air-bridge, CAL is unable to mitigate its losses by adjusting its operating schedule and still effectively service the air-bridge.

2.1.33 According to oral submissions during the public hearing on January 9, 2017, CAL views itself as a hybrid model carrier i.e. a mixture of legacy and low-cost.

Tobago Air Bridge 2.1.34 The Committee learned that 52% of CAL’s flights are operated on the domestic air bridge; and approximately TT $41 million has been budgeted for CAL as the subsidy on the air bridge for 2017.

2.1.35 The subsidy does not cover the entire shortfall between the fare charged for flights along the air bridge, and the cost of running the air bridge. Therefore, the route is unprofitable.

2.1.36 According to CAL’s submission, when questioned about the appropriate fare for the air bridge, “In relation to operating costs, we estimate that figure, depending on the price of fuel, in or around the $600 to $700 range, round trip.”

2.1.37 To add to CAL’s challenges, approximately 25% of air bridge passengers are “no-shows with no consequences or no charges passed on to them”.

2.1.38 This reality affects not only CAL’s profitability, but also the ability to reliably service the air bridge.

2.1.39 As at March 13, 2017, the Committee was informed that an air bridge proposal was sent to the Ministry of Finance for the implementation of additional charges on the air bridge, which will boost profitability, as well as contribute towards resolving poor customer practices.

Human Resources 2.1.40 At its public hearing on January 9, 2017, the Committee questioned CAL’s ability to support its “top heavy” management structure.

2.1.41 In response, CAL informed the Committee of its intention to undertake an entire review of its manpower requirements at all levels.

2.1.42 To add to this, the Chief Financial Officer and the Chief Executive Officer posts are still not permanently filled.

2.1.43 The Committee was informed that interviews have been conducted and the Board is currently experiencing difficulty in casting persons to occupy these posts.

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2.1.44 Additional concerns of the Committee are:

a. The disparity between salary levels of CAL’s frontline staff, and industry standards (see Appendix III); b. The proportionately high salaries paid at the management level, compared to industry standards (see Appendix III); c. The instances where retired pilots are required to return to service due to what appears to be insufficient succession planning; d. The instances when “jump seat” flight usage is apparently abused by certain members staff; and e. The instances where office holders appear to be unqualified for the posts they hold.

2.1.45 CAL informed the Committee that an employee engagement survey conducted in February, 2016 revealed that only 34% of employees in the organisation “felt that CAL was moving in the right direction and had a high probability of achieving its goals”.

2.1.46 In the face of these issues, CAL has informed the Committee that steps are being taken to bring about organisational change, so that the employee perception is improved.

2.2 Findings and Recommendations Transparency, Accountability and Value for Money 2.2.1 The Committee noted that CAL has consistently failed to adhere to reporting timelines. This affects the ability of its line Ministry, as well as the Parliament Secretariat, to adequately monitor and evaluate operations.

2.2.2 At the time of this report, the Committee was still awaiting outstanding submissions of Audited Financials and Administrative Reports.

Recommendation 2.2.3 CAL should commit to improving it’s timelines with regards to submission of reports and financials.

Customer Services 2.2.4 The Committee noted that despite issues with Customer Service, CAL still benefits from a level of brand loyalty.

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2.2.5 It is the belief that attention to customer service would contribute towards the realisation of profitability objectives.

Recommendation 2.2.6 The implementation of additional features of the PSS will further aid CAL in improving customer service.

2.2.7 CAL should also upgrade and modernise its fleet.

Profitability 2.2.8 Having reviewed the contents of the Lufthansa report, the Committee believes that the recommendations therein will steer CAL toward profitability.

2.2.9 Additionally, based on the evidence from CAL submissions, the Committee believes that certain practices, such as excessive use of the flight “jump seat” that have been permitted in the past should be ceased.

2.2.10 The Committee also noted that CAL has failed to pay to the Board of Inland Revenue (BIR) “benefit in kind” taxes due in connection to the “jump seat” flights by staff. See Appendix IV

Recommendation 2.2.11 CAL should urgently conduct a route analysis with a view to a reduction and or elimination of services to some North American destinations where over the past five years there has been an unabated trend of declining passenger numbers and massive financial losses. This should be completed within the next three (3) months.

2.2.12 CAL should manage use of the “jump seat” for personal use by CAL staff, such staff members must pay all relevant taxes associated with the flight sector(s) involved. This should be implemented with immediate effect.

2.2.13 The first 20, “jump seat” uses for personal reasons must be deducted from that employees’ annual allotment of 20 free travel passes. Thereafter, for pilots only, there will be a limit of up to 20 additional personal “jump seat” trips allowed per year. This should be implemented with immediate effect.

2.2.14 CAL should immediately communicate with the Board of Inland Revenue regarding their likely action on CAL’s failure, since its inception, to adhere to the regulations

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surrounding benefit-in-kind taxes due to the State as it relates to the use of the cockpit “jump seat” by staff for personal trips.

2.2.15 CAL should take all necessary steps regarding the recovery of any taxes due to the BIR from staff members who have utilised the cockpit “jump seat” privilege in an excessive manner. This should be done immediately.

2.2.16 CAL should continue to work with relevant bodies to mitigate the risk of fraud by implementing all necessary security measures.

2.2.17 CAL should pursue measures to recover money owed by Venezuela.

Fleet Management 2.2.18 The Committee noted that the major issues with the fleet circulate around safety/reliability of aircraft, and upkeep of the aircraft interior.

Recommendation 2.2.19 CAL should, as far as practicable, implement the recommendations contained in the Lufthansa Consulting report, particularly in relation to the ATR Fleet.

2.2.20 CAL should commit to the refurbishment and modernisation of its fleet.

Strategic Direction 2.2.21 The Committee is of the opinion that the Lufthansa report provides sufficient direction to steer CAL towards profitability.

Recommendation 2.2.22 CAL should, as far as practicable, implement the recommendations contained in the Lufthansa Consulting report. This process should begin with three months of the date of this report.

Tobago Air Bridge 2.2.23 The Committee noted the burden that servicing the air bridge has placed on CAL’s profitability.

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Recommendation 2.2.24 CAL should maintain persistence with respect to following up with the Ministry for approval of its strategy for resolving the issues with the Tobago air bridge service.

Human Resources 2.2.25 The Committee believes that CAL has to address its human resource issues from several fronts.

Recommendation 2.2.26 CAL should fill the Chief Financial Officer (CFO) and Chief Executive Officer (CEO) positions with urgency.

2.2.27 CAL should follow through with plans to conduct a manpower audit to review and re- adjust the management structures.

2.2.28 CAL should introduce a mentorship programme between senior pilots and junior pilots, to ensure sufficient knowledge transfer takes place by the time senior pilots attain retirement age. This step will resolve the need to rehire retired pilots.

2.2.29 CAL should follow through with plans to conduct a manpower audit to review and re- adjust the management structures.

2.2.30 CAL should ensure that with immediate effect, any employee continuing to be employed by the company on contract after retiring at age 60 should be paid at the base level of the position. This should be implemented with immediate effect.

2.2.31 CAL should ensure that with immediate effect, any employee continuing to be employed by the company on contract after retiring at the age of 60 should have no seniority of any kind over employees below the official retirement age.

2.2.32 CAL should undertake all necessary actions over the next six (6) months to complete the process of the retirement of all position holders who are over the age of 60.

2.2.33 CAL should immediately put in place a freeze on any increases in wages and salaries until such time that the operations of the airline is sustainably profitable.

2.2.34 CAL should immediately cease the practice of annual incentive or merit payments given the current unprofitable status of the company. Consideration of re-introducing such payments in the future should be based on the sustained profitability of the company and should also be subject to approval by Corporation Sole.

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2.2.35 The “pilot focus” of the airline must change to being “stakeholder focussed”. The extent to which the ingrained internal practices of the airline regarding seemingly “preferential” treatment for pilots must end immediately. Such practices as providing salary and other payment increases to pilots with no commensurate adjustment for other staff is demoralising, counter-productive and must end immediately.

2.2.36 The Board of CAL should take immediate action regarding the holding of positions by persons who, in many cases, are woefully unqualified for the posts. This breach of good business practice must be rectified within 6 months.

2.2.37 CAL should immediately cease all efforts regarding its international recruitment of foreign pilots. Given the many local pilots seeking jobs, a report on how this came to be should be provided to this committee as well as its line Ministry.

2.3 Conclusion 2.3.1 Caribbean Airlines Limited (CAL) has the potential to become a valuable contributor to the State and the citizens of Trinidad and Tobago, through its provision of services.

2.3.2 However, the Company has encountered many obstacles, particularly in relation to customer satisfaction, fleet management and profitability.

2.3.3 The Company has received a comprehensive report with recommendations for strategically moving to a position of profitability, within a projected timeframe.

2.3.4 In light of the above, the Committee is optimistic that with diligent implementation of the recommendations proffered, the Company can overcome the present challenges and emerge as a viable organisation.

2.3.5 Your Committee therefore awaits the response of the Minister of Works and Transport to the recommendations listed on pages 1 and 2, in accordance with Standing Orders 100(6) and 110(6) of the Senate and the House of Representatives respectively which states inter alia that – “The Minister responsible for the Ministry or Body under review shall, not later than sixty (60) days after a report from a Standing Committee relating to the Ministry or Body, has been laid upon the Table, present a paper to the House responding to any recommendations or comments contained in the report which are addressed to it….”. 2.3.6 Your Committee therefore respectfully submits this Report for the consideration of the Houses

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Sgd. Sgd. Mr. David Small Dr. Lester Henry Chairman Vice-Chairman

Sgd. Sgd. Mrs. Cherrie-Ann Crichlow Cockburn, MP Mr. Wade Mark Member Member

Sgd. Sgd. Mr. Fazal Karim, MP Brig. Gen. (Ret.) Ancil Antoine, MP Member Member

Sgd. Sgd. Mr. Adrian Leonce, MP Mrs. Allyson Baksh Member Member

APPENDICES

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Appendix I

Minutes of Proceedings

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MINUTES OF THE TWELFTH MEETING OF THE JOINT SELECT COMMITTEE ON STATE ENTERPRISES, HELD IN THE ARNOLD THOMASOS EAST MEETING ROOM AND THE J.HAMILTON MAURICE ROOM, MEZZANINE ROOM, LEVEL 2, TOWER D, THE PORT OF SPAIN INTERNATIONAL WATERFRONT CENTRE, 1A WRIGHTSON ROAD, PORT OF SPAIN ON JANUARY 09, 2017

Present were:

Mr. David Small Chairman Dr. Lester Henry Vice-Chairman Ms. Allyson Baksh Member Brig. Gen. (Ret.) Ancil Antoine, MP Member Mr. Adrian Leonce, MP Member Mr. Wade Mark Member Mr. Fazal Karim, MP Member

Mrs. Angelique Massiah Secretary Ms. Sheranne Samuel Assistant Secretary Ms. Terriann Baker Parliamentary Intern

Absent were: Mrs. Cherrie-Ann Crichlow-Cockburn, MP Member (Excused)

Also Present were:

Officials from Caribbean Airlines Limited (CAL)

Mr. Shameeer Mohammed Chairman Mr. Michael Quamina Vice-Chairman Capt. Jagmohan Singh Chief Executive Officer (Ag.) Ms. Marina Chase Chief Financial Officer (Ag.) Mr. Colville Carrington VP Maintenance and Engineering Ms. Hyacinth Guy VP Human Resources Mr. Sean Quong Sing VP Commercial (Ag.)/EM Revenue Network and Distribution Ms. Nalini D. Lalla General Counsel and Corporate Secretary Mr. Adrian Agarrat Senior Manager Financial and Revenue Accounting Ms. Dionne Ligoure Head Corporate Communications

Officials from the Ministry of Finance

Ms. Linda Phillips Permanent Secretary (Ag.) Mr. Lester Herbert Director, Central Audit

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PUBLIC HEARING WITH OFFICIALS OF CARIBBEAN AIRLINES LIMITED

6.1 The meeting resumed at 10:14 a.m. in public, in the J. Hamilton Maurice Room.

6.2 The Chairman welcomed officials of CAL and introductions were exchanged.

Opening Remarks

6.3 The Chairman of CAL made opening remarks.

6.4 Detailed hereunder are the issues/concerns raised and the responses proffered during the hearing with the officials of CAL:

(i) Customer Services . CAL’s customer service support is divided into three (3) areas: technical, regulatory and human interface. . The utilisation of the new Passenger Service System (PSS) has aided in identifying customers and boosted the efficiency of the airline. . CAL’s customer rating was affected by the lack of new and efficient equipment on the flights such as upgraded seats. . Consideration has been given to improving the interior of CAL’s aircrafts and modernising equipment.

(ii) Operations . 52% of CAL flights occurred on the domestic air bridge. . Officials of CAL described the airline as a hybrid model: legacy carrier moving toward a low-cost carrier model. . Approximately 30% of CAL’s aircrafts are owned and 70% leased. . It was indicated that the Trinidad-Tobago-JFK service was supported by the Tobago House of Assembly. There was a 65% load factor. . With regard to CAL’s Jamaica operations, only the Kingston/Toronto route was profitable. . Officials stated that there were no plans to drop any of CAL’s routes and that there was the possibility of expanding regionally once the issues with the ATRs were resolved. . CAL was 100% compliant with Web Content Accessibility Guidelines (WCAG) requirements as laid out the US Department of Transportation.

(iii) Debt . CAL remained hopeful that Venezuela would repay its debt to the company. . CAL was accused by the Airports Authority of defaulting on rental payments for occupying the Piarco space. There was contention regarding the correct fees to be paid and whether arrears were due. Both parties have met and were seeking a compromise.

(iv) Fleet Management 4

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. The need for modernised fleets to provide comfortable and reliable flights to customers was emphasised. The company was in the process of conducting a fleet review. . CAL was the launch customer for ATR model in the Caribbean. The ATRs have proven to be unreliable. . ATR 9YTTA which was used for the Tobago route had 5 incidents of hydraulic emergencies and irregular flight activity. . Three (3) out of five (5) ATRs assigned to the Tobago route were operational. . The previous Board waived its right to sue the ATR manufacturer. CAL has sought a legal opinion on the matter. Discussions were held with the ATR manufacturer and an official has been assigned to CAL to threat with issues which may arise. Additionally, the ATR manufacturer supplied a wet lease aircraft at its own cost, for two (2) months, to supplement the shortfall in services due to the grounding of the 9YTTA ATR. . Dysfunctional ATR planes have forced the use of jets to compensate for its scheduled flights. . The use of heavy duty planes (jets) for the short Tobago commute requires an increased altitude in order to sufficiently cool the engines and this has led to the dysfunction and unreliability of these aircrafts. . The use of Jets can incur triple the cost as opposed to the use of the ATR fleet.

(v) Management Structure . The Chief Financial Officer (CFO) and the Chief Executive Officer (CEO) posts have not been filled. . Interviews were conducted but the Board was experiencing difficulty in finding a suitable candidate for the position of CEO. It was indicated that it was likely that the position of CFO would be filled soon based on the interviews held. The need for a Chief Operating Officer was also stated. . CAL indicated an intention to review its manpower requirements at all levels.

(vi) Profitability . CAL officials indicated that efforts to ensure profitability have been undertaken. . CAL’s 2016 figures demonstrated improvement in its financial position and showed signs of progressive improvement in upcoming years. . It was posited that CAL could breakeven by 2018.

(vii) Safety . The 2011 runway overrun in Guyana was attributed to human error. . Re-training exercises were undertaken to prevent further incidents.

(viii) Tobago Air Bridge . The Tobago Air Bridge was described as a non-profitable route. . For fiscal year 2017, $41 million TTD was budgeted as the subsidy for the air bridge. For each $300 round trip, CAL receives a subsidy of $100 TTD. . The Company has given consideration to alternative/ancillary services in order to offset the increasing deficit caused by the fixed air bridge fare.

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. An air bridge proposal was sent to the Ministry of Finance. Further information was required from CAL in order to devise a possible solution. . The Ministry of Finance gave an undertaking to respond to CAL’s proposal by February 2017.

Requested Information:

8.1 Further to the discussions during the hearing, CAL gave an undertaking to provide the Committee with the following:

Transparency, Accountability and Value for Money 1. Please provide the management accounts of the company for the period 2015/2016. 2. What were the reasons for increasing the number from 15 to 20 staff tickets as stated in your submission?

3. How many of these staff tickets have been utilised over the past five years?

4. Please provide a copy of Management Tender Process/Evaluation documents used for procuring the ATR aircrafts.

5. Who recommended the purchase of the ATR fleet? Please provide documentation of this recommendation?

6. Please provide a copy of the report done by Lufthansa Consulting for CAL.

7. Please provide a route analysis for all routes operated by CAL for the past five years, by year, showing: . Total Number of Passengers flown per year . Load factor . Number of flights . Total Revenue / Total costs / Profit or Loss

8. What are CAL’s individualised routes? Please state the profitability of these routes?

9. What is the payload on the 737 flight service from Trinidad to Tobago, with final destination JFK? a. Can the airline provide statistics on the profitability of this route? b. What support has the THA provided for this route? 10. What is the break-even cost per seat, per round trip for the domestic service using the ATR and also using the 737 aircraft?

Strategic Direction 11. What Strategic Plan does the management team of the airline seek to implement to ensure the future viability of the airline? Please provide detailed recommendations to ensure that the airline becomes sustainable. 6

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The status of ATR operations 12. What are the issues being experienced with the present ATR fleet?

ADJOURNMENT

9.1 There being no other business, the Chairman thanked officials of CAL, the media and members of the public and adjourned the meeting.

9.2 The adjournment was taken at 12:38 p.m.

I certify that these Minutes are true and correct.

Chairman

Secretary

February 01, 2017

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MINUTES OF THE FOURTEENTH MEETING OF THE JOINT SELECT COMMITTEE ON STATE ENTERPRISES, HELD IN THE A.N.R. ROBINSON WEST MEETING ROOM, LEVEL 9 AND THE J.HAMILTON MAURICE ROOM, MEZZANINE FLOOR, TOWER D, THE PORT OF SPAIN INTERNATIONAL WATERFRONT CENTRE, 1A WRIGHTSON ROAD, PORT OF SPAIN ON MARCH 13, 2017

Present were:

Mr. David Small Chairman Dr. Lester Henry Vice-Chairman Mr. Wade Mark Member Mr. Fazal Karim, MP Member Mr. Adrian Leonce, MP Member Brig. Gen. (Ret.) Ancil Antoine, MP Member Ms. Allyson Baksh Member

Mr. Brian Caesar Secretary Ms. Sheranne Samuel Assistant Secretary Mrs. Krystle Gittens Parliamentary Intern Ms. Vahini Jainarine Legal Officer I

Absent were: Mrs. Cherrie-Ann Crichlow-Cockburn, MP Member (Excused)

Also Present were:

Officials of the Caribbean Airlines Limited (CAL)

Mr. Michael Quamina Vice Chairman Capt. Jagmohan Singh Chief Executive Officer (Ag.) Ms. Marina Chase Chief Financial Officer (Ag.) Mr. Colville Carrington VP Maintenance & Engineering Ms. Hyacinth Guy VP Human Resources Mr. Sean Quong Sing VP Commercial (Ag.) and EM Revenue Network & Distribution Ms. Kristy Kanick Legal Counsel & Assistant Corporate Secretary Mr. Adrian Agarrat Senior Manager Financial & Revenue Accounting Ms. Dionne Ligoure Head Corporate Communications

Officials from the Trinidad and Tobago Civil Aviation Authority (TTCAA)

Capt. Thomas E Lawrence Chairman Mr. Francis Regis Director General (Ag.) 8

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Officials from the Ministry of Finance Ms. Lisa Phillips Permanent Secretary (Ag.) Ms. Mala Mohammed Senior Business Analyst (Ag.)

PUBLIC HEARING WITH OFFICIALS OF CAL AND THE TTCAA

6.1 The Chairman called the public meeting to order at 10:26 a.m. in the J. Hamilton Maurice Room.

6.2 The Chairman welcomed officials of CAL, TTCAA and the Ministry of Finance and introductions were exchanged.

6.3 The Chairman outlined the objectives and purpose of the meeting and stated that an in camera meeting was held with the officials prior to the convening of the public hearing.

6.4 Detailed hereunder are the issues/concerns raised and the responses proffered during the hearing with the officials of CAL, TTCAA and Ministry of Finance:

1. Transparency, Accountability and Value for money 6. The recommendations of the report from Lufthansa Consulting for CAL. 7. CAL’s Strategic Plan for 2017-2019. 8. CAL’s “Management Tender Processes Evaluation” documentation. 9. CAL’s decision to wet lease a cargo plane. 10. CAL’s savings by moving from Nicholas Towers to Government Campus Plaza. 11. Benefits to CAL of using fuel dashboard. 12. Cargo issues and credit card fraud experienced by CAL, and measures put in place to eliminate occurrences. 13. CAL’s issues with its Frequent Flyer programme. 14. CAL’s decision to provide Cabin Crew with home transport service from their residences to the airport.

2. Strategic Direction  Current challenges affecting CAL’s profitability.  CAL’s rebranding strategy and exercise.  How CAL seeks to position itself as a service provider moving forward e.g. hybrid, low-cost, etc.  CAL’s consideration of partnering with Uber.

3. Tobago Air Bridge 15. Outstanding monies owed by the Tobago House of Assembly (THA) to CAL. 16. CAL’s plans for the Tobago air-bridge and how it intended to resolve the issue of unavailable seats.

4. Human Resources 17. The disparity between salary levels of CAL’s frontline staff, and industry standards.

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18. CAL’s measures to protect frontline staff who may be confronted by disgruntled customers. 19. CAL’s process to streamline security. 20. Succession planning for pilots who are close to retirement. 21. Application process for potential pilots.

Key Issues Discussed with TTCAA

5. Oversight by TTCAA 22. The TTCAA Safety Oversight System manual. 23. TTCAA satisfaction with the outcome of troubleshooting and maintenance action by the ATR Manufacturers. 24. TTCAA’s procedure when an incident occurs. 25. TTCAA’s decision not to publish incidents on website.

Requested Information:

7.1 Further to the discussion and the undertakings made during the hearing, the Committee agreed to request additional information from CAL and TTCAA.

Suspension

8.1 At 12.40 p.m., there being no other business, the Chairman thanked officials of CAL, TTCAA, the Ministry of Finance, the media and members of the public and suspended the meeting to resume in camera.

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MINUTES OF THE SEVENTEENTH MEETING OF THE JOINT SELECT COMMITTEE ON STATE ENTERPRISES, HELD IN THE ARNOLD THOMASOS EAST MEETING ROOM, LEVEL 6, AND THE J. HAMILTON MAURICE ROOM, MEZZANINE FLOOR, TOWER D, THE PORT OF SPAIN INTERNATIONAL WATERFRONT CENTRE, 1A WRIGHTSON ROAD, PORT OF SPAIN ON MAY 08, 2017

Present were:

Mr. David Small Chairman Dr. Lester Henry Vice-Chairman Mrs. Cherrie-Ann Crichlow-Cockburn, MP Member Brig. Gen. (Ret.) Ancil Antoine, MP Member Mr. Wade Mark Member

Mr. Brian Caesar Secretary Ms. Sheranne Samuel Assistant Secretary Mrs. Krystle Gittens Parliamentary Intern

Absent were: Mr. Fazal Karim, MP Member (Excused) Mrs. Allyson Baksh Member (Excused) Mr. Adrian Leonce, MP Member

Also present were:

Officials from Caribbean Airlines Limited

Mr. Shameer Mohammed Chairman Capt. Jagmohan Singh Chief Executive Officer (Ag.) /VP Operations Ms. Marina Chase Chief Financial Officer (Ag.) /Senior Manager Treasury Mr. Colville Carrington VP Maintenance & Engineering Ms. Hyacinth Guy VP Human Resources Ms. Nalini D. Lalla General Counsel & Corporate Secretary Ms. Dionne Ligoure Head Corporate Communications Mr. Adrian Agarrat Senior Manager Financial & Revenue Accounting

Officials from Ministry of Finance

Ms. Lisa Phillips Permanent Secretary (Ag.) 11

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Ms. Mala Mohammed Senior Business Analyst (Ag.)

PUBLIC HEARING WITH OFFICIALS OF THE CARIBBEAN AIRLINES LIMITED

7.1 The meeting resumed at 10:23 a.m. in public, in the J. Hamilton Maurice Room.

7.2 The Chairman welcomed officials of the Caribbean Airlines Limited and the Ministry of Finance and introductions were exchanged.

7.3 The Chairman outlined the objectives of the inquiry and acknowledged receipt of the CAL’s submission.

7.4 The Chairman made a statement regarding compliance with requests of the Committee.

Opening Remarks

7.5 Detailed hereunder are the issues/concerns raised and the responses proffered during the hearing with the officials of Caribbean Airlines Limited and the Ministry of Finance:

1. Concerns over CAL’s hesitance to provide the Committee with all requested information. a. Management’s claim of ignorance that the Lufthansa report provided to the Committee was incomplete. b. The “value for money” with regard to the Lufthansa report. c. CAL’s plans to implement the recommendations of the Lufthansa report. d. Recognition that if CAL’s management had implemented the recommendations of the Lufthansa report in a timely manner, the current situation would be completely different. 2. The issues with communication between CAL and the Ministry of Finance. 3. The tendering process used for purchase of the ATRs 4. CAL’s status with respect to preparation of its strategic plan 2016-2019. 5. The current consultants hired by CAL, and their purpose. 6. CAL’s framework for succession planning. a. The reason for the number of staff members who are over sixty (60) years of age. b. Retirement policy for foreign employees of CAL. c. The compensation received by staff members who officially retire at sixty (60) years, yet return to work on contract.

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d. Clarification on the collective agreement with Trinidad and Tobago Airline Pilots Association (TTALPA) e. The jurisdiction of TTALPA with respect to negotiating terms of the collective agreement. 7. Whether there has been redundancy following the return of the Boeing 767. a. Whether a manpower audit has been conducted at CAL. 8. The status with respect to the submission of outstanding audited financials. 9. Provision of Management Accounts to the Committee. 10. Assessment of the experience with the ATR fleet, given that the aircraft were new. a. Whether there has been any consideration to sell the ATR fleet. b. Whether there would be any contractual issues if CAL decided to dispose of the ATR fleet. 11. The issue of incumbents in critical roles within the organisation not meeting the criteria for the positions. 12. Whether CAL has a performance related incentive scheme. 13. The policy for use of the “flight deck jump seat” by staff members. 14. Schedule for assumption of the CEO and CFO. 15. Identification of who drafts Terms and Conditions for Senior Management Positions. a. Clarity on the “Responsibility Allowance” 16. CAL’s targeted year to break even. 17. The issue of staff morale. a. Steps taken to deal with staff dissatisfaction with management, and low staff morale b. The possibility of improving the salaries of other staff by reducing the proportion of CAL’s salary expenses that go to pilots. 18. The issue of customer service.

7.6 The Chairman thanked officials for attending and they were excused. The Chairman also thanked the viewing and listening audience.

SUSPENSION

8.1 At 12:36 p.m., the Chairman suspended the public meeting to resume in camera for a post- hearing discussion with Members only.

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Appendix II

Verbatim Notes

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VERBATIM NOTES OF THE TWELFTH MEETING OF THE JOINT SELECT COMMITTEE ON STATE ENTERPRISES, HELD IN THE ARNOLD THOMASAS ROOM (EAST), LEVEL 6, (IN CAMERA), AND J. HAMILTON MAURICE ROOM (MEZZANINE FLOOR) (IN PUBLIC), OFFICE OF THE PARLIAMENT, TOWER D, THE PORT OF SPAIN INTERNATIONAL WATERFRONT CENTRE, #1A WRIGHTSON ROAD, PORT OF SPAIN, ON MONDAY, JANUARY 09, 2017 AT 9.17 A.M. PRESENT Mr. David Small Chairman Dr. Lester Henry Vice-Chairman Mr. Fazal Karim Member Miss Allyson Baksh Member Brig. Gen. Ancil Antoine Member Mr. Adrian Leonce Member Mr. Wade Mark Member

Mrs. Angelique Massiah Secretary Miss Sheranne Samuel Assistant Secretary Miss Terriann Baker Parliamentary Intern ABSENT Mrs. Cherrie-Ann Crichlow-Cockburn Member [Excused]

10.15 a.m.: Meeting resumed in the J. Hamilton Maurice Meeting Room. Mr. Chairman: Good morning everyone and I would like to welcome everyone to this meeting of the Joint Select Committee on State Enterprises. I would like to firstly apologise for the late start. We had a bit of a delay and a couple technical issues, so I appreciate your patience in bearing with us. This enquiry this morning is for the purpose of examining the operations of 15

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Caribbean Airlines Limited with a specific focus on customer service and to explore what might be some of the possible solutions to the challenges being faced by the company. Just to be clear, the role of this Committee is to firstly examine the issues which arose based on your Company’s written responses to the Committee’s questions, and secondly, to aid and support the company improving its operations resulting in a more efficient and effective organization. For your information, this meeting is being broadcast live on Parliament Channel 11, Parliament radio 105.5 and the Parliament’s YouTube channel ParlView. Viewers and listeners can participate by sending comments relating to today’s engagement via email to [email protected] or on our Facebook page at facebook.com/ttparliament or on Twitter @ttparliament. I would like to take the opportunity now to welcome the officials of the Caribbean Airlines Limited and I would like for you all to introduce yourselves and also in the introduction I will like to get from you, how long have you all been with the airline, so that we can gage your tenure. So, I would like to begin with—I see the chairman is here. I would like the chairman to begin the process and I would like each member to identify themselves and indicate how long they have been with the company. Thank you very much. Mr. Chair. OFFICIALS FROM CARIBBEAN AIRLINES LIMITED Mr. Shameer Mohammed Chairman Mr. Michael Quamina Vice Chairman Capt. Jagmohan Singh Ag. Chief Executive Officer Ms. Marina Chase Ag. Chief Financial Officer Mr. Colville Carrington VP Maintenance & Engineering Ms. Hyacinth Guy VP Human Resources Mr. Sean Quong Sing VP Commercial (Ag) EM Revenue

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Network & Distribution

Ms. Nalini D. Lalla General Counsel & Corporate Secretary

Mr. Adrian Agarrat Senior manager Financial & Revenue Accounting Ms. Dionne Ligoure Head Corporate Communications OFFICIALS FROM MINISTRY OF FINANCE Ms. Lisa Phillips Permanent Secretary Mr. Lester Herbert Audit Department Mr. Mohammed: Chair, good morning and Committee members. First of all, I would like to thank the Committee for inviting Caribbean Airlines to participate in this hearing. I would also like to thank the Committee for acceding to our request for a deferral from December to January. We sincerely appreciate that being granted to us. I would also like, as part of my opening comments, to wish all members of the Committee and by extension all persons in this room a successful 2017. May it be a productive, safe one and the Lord’s wisdom be provided to us to take our country through the period that we are in. I am Shameer Ronnie Mohammed, Chairman of Caribbean Airlines. We are a relatively new board having been appointed at the end of October, 2016. I am joined this morning by my Vice-Chair, Mr. Michael Quamina; our acting Chief Financial Officer, Ms. Marina Chase; our Senior Revenue Manager, Adrian Agarrat; our acting CEO, Capt. Jagmohan Singh; our VP Human Resources, Ms. Hyacinth Guy; our VP Commercial, Sean Quong Sing; Corporate Communications, Ms. Dionne Ligoure; Head of Legal, Nalini D. Lalla and our VP, Mr. Colville Carrington. I should inform the Committee that we do have with us this morning representatives for the Ministry of Finance, Permanent Secretary Ms. Phillips and Mr. Lester Herbert of the Audit Department, Ministry of Finance. Mr. Chairman: Thank you very much. Could each member of the Caribbean 17

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Airlines team just indicate, across the line—the chairman has indicated your title, could you just tell us how long you have been with the company? Mr. Agarrat: I have been with Caribbean Airlines since 2007. Ms. Chase: I have been with Caribbean Airlines since 2007. Mr. Quamina: I was appointed along with the chairman at the end of October 2016. Mr. Singh: Good morning. I joined Caribbean Airlines 2007 as a check airman and I was appointed acting CEO at the end of November 2016. Ms. Guy: Good morning. I joined Caribbean Airlines June 2014. Mr. Quong Sing: Good morning Committee. I joined Caribbean Airlines 2007, substantive position is Executive Manager for Network and Distribution and I am currently acting Vice-President Commercial since April 2016. Mr. Carrington: Good morning Committee. Vice-President, Maintenance and Engineering. I joined Caribbean Airlines 15th December, 2006. Ms. Lalla: Good morning Committee. I joined Caribbean Airlines January 2011. Ms. Ligoure: Good morning. I joined Caribbean Airlines in May 2015. Mr. Chairman: Thank you very much. I would now— Yes. Thank you very much. I would like to officially acknowledge the presence of the Permanent Secretary, Ministry of Finance. I appreciate you all taking the time out of your busy schedule to be here and to support the work that the Committee is doing. I would like now to introduce myself and after I will ask members of the Committee to introduce themselves. I am David Small, I the Chairman of this Committee. And beginning on extreme right, I would like the other members of the Committee to introduce themselves. [Introductions made by the members of the Committee] Mr. Chairman: Thank you very much. And it is important to also acknowledge that the Committee is ably supported by a series of members from the Parliament who are all here, very, very good professionals supporting the work of this

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Committee and the work of the Parliament. I want to acknowledge that we could not get the work done here without the wonderful support that we receive from the members of staff of the Office of the Parliament. At this point in time as we begin our enquiry, I would like to request all persons in the room to make sure that their cellular phones are either switched off or placed in silent mode so we avoid any untoward disturbances during the hearing. And I would like to indicate that the Committee has received the submissions from Caribbean Airlines who in response to our questions, and I think that they have generated quite a bit of discussions and you will hear, certainly from the members of the Committee, where we have some issues that we will raise. At this point in time I would like to ask—even though I gather you kind of did it, but I would like the Chairman of Caribbean Airlines to make a few, brief opening remarks on his view of the company before we begin this formal enquiry. Mr. Mohammed: Chair, Caribbean Airlines recognizes that it is a state enterprise of one that is of significant importance to not just our national development with regional development. The airline has been in existence for 10 years. In the earlier period of January, we would have celebrated our tenth anniversary. The airline in its present position and I will just refer to a bit of statistics, if I can? For the year January to November 2016—and I am trying to provide as current statistics as I can—we would have operated almost 14,000 flights. Our passengers would relate to approximately 868,000 passengers during that period. In terms of operations, 52 per cent of our flights are operated on the domestic air bridge representing—52 per cent, sorry, of our flights is on the air bridge. Mr. Chairman: Thank you very much, Mr. Chairman. I would now like to begin the enquiry and I would like to remind both Committee members and the officials present that you would, please, any responses or their questions through the Chair and that you would kindly activate your microphone whenever you are making a

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contribution and, please, switch it off when you are done. So, I would like to begin the enquiry by firstly tasking the CEO and perhaps the chairman also to help put a frame around what we are doing. Caribbean Airlines as we know is an airline. They are running an air travel service, but the world of travel has changed and the description of airlines varies. So I would like to get from company, how do you—how would you describe yourself to someone? We have low-cost carriers, ultra-low cost carriers, we have network carriers—we have all sorts of descriptions for airlines. I want to get from Caribbean Airlines from either the CEO and/or the chairman, what is your view? How would you describe your airline in terms of a category that it fits into that helps us to understand the frame within which the airline operates? 10.25 a.m. Capt. Singh: Chairman, thank you. Caribbean Airlines started off with basically the model of a legacy carrier. We have seen competition come into our area, and the competition has been basically the low-cost carriers. We have moved towards that model. Currently, we would have what would be described as a hybrid model. That is a combination of the legacy and movement towards the low-cost carrier. We are addressing our cost structure, moving that cost structure towards the low-cost carriers’ structure. To that end, we have had the assistance of ICF, in first of all building a strategic plan; we then moved towards the assistance of Lufthansa in developing that strategic plan; and in 2016 we have looked at a total strategic plan. Therefore, we have addressed the reduction of cost, the enhancement of revenue, driving towards a break-even point. The 2015 Lufthansa plan recommended that we reduce our fleet. We have stopped the operation of the 767 fleet, we have reduced the number of aircraft on the 737 fleet, and we are doing a fleet review both on the turbo prop as well as the jet fleet. Those fleet reviews, given that the decisions made would affect the airlines

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business in the medium and long term, those reviews are taking the attention of a full team with regard to fleet reviews, and we continue those reviews currently. Mr. Chairman: Thank you very much, and I am receiving your information that you view yourself as a hybrid, and that is actually the fastest growing segment of the airline business now where because there have been so much segmentation, that is just my understanding, that airlines that were in one particular group before but cannot necessarily segregate to another group have had to form themselves around a particular formula of activities. My concern remains with the passenger experience, and this is why we are here, this enquiry is focused on your delivery of customer service. So that when you look at other airlines who describe themselves as hybrids, and there is a whole long shopping list of them, but regionally one of your clear competitors is an airline called jetBlue, and perhaps I have had too much experience with understanding the passenger experience on an airline that describes itself. How would you describe the passenger offering that you have as a passenger, someone just come into Caribbean Airlines’ office or purchased a ticket online, how would you describe that experience that someone purchasing a ticket, is that something that you are totally happy with at this point in time? Capt. Singh: Chairman, through you, if I may ask Mr. Quong Sing to answer the question. Mr. Chairman: Certainly. Mr. Quong Sing: Good morning once again to the Chair and Committee. There is always room for improvement and we have recognized that we have to continually improve and view our customer as the foremost important of why we exist as an airline. We tend to break it out into a number of areas in terms of the customer service supports: technical, regulatory and the human interface. So, we have made huge strides in the technical aspects which support our team and in turn support the customer. So, we have moved from a seater-pay system to a PSS called Amadeus.

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It is one of the premier systems in the world used by 120 airlines in the world, and three of the mega global partnerships one were alliances and so on. This has offered us a number of positive things in terms of being able to build in business rules and the regulatory rules which help mitigate any challenges we have in terms of any customers not being accepted by, for whatever paperwork may be needed, visas, et cetera, and allows the agency to be able to focus more on human interface. The regulatory stuff, we have bound ourselves by the most stringent ones, and the most stringent tends to be DOT type regulatory frameworks that protect the customer from any sort of deviation from what we offer or what we intend to offer. Those frameworks go across the entire network. And then the human interface: we have built in a number of things that are happening through the organization in our culture change and behavioural changes we recognize there are needs for those things. We have also recognized the need for recruitment, and we focus a lot on people’s attitudes and behaviours, and we have also built in, with that, schedules. Mr. Chairman: Mr. Quong Sing, permit me to interject. I just want to get from you, the passenger experience. How would you, as the person or perhaps one of the group of persons in the leadership of the organization, describe your passenger experience? Is it comparable to other airlines that are grouped as hybrid, or is it something that you are aspiring towards that you need to do some work towards? I am trying to get from you, how you see yourself. Is it that you can say Caribbean Airlines passenger experience is comparable to other airlines that are offering services in the so-called hybrid group? Or, is it something that you recognize that we are not there yet and we recognize that there is a gap and we are working to plug those gaps to bring us to where we need to be? That is what I am trying to get at. Mr. Mohammed: Chair, if I may answer that question in the context of Caribbean Airlines operations. First of all we need to recognize that in terms of numbers, 52 per cent of our flights and 36 per cent of our passengers travel on the domestic air

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bridge. So, we will probably want to treat the domestic air bridge a bit separate from our international network. What we can say is that Caribbean Airlines, we do conduct customer satisfaction surveys, and if I may say that those surveys have reflected that we do have an exceptionally good customer satisfaction rating. Mr. Chairman: Okay, I accept that. I am asking, let me try to put it in—how would you, if someone says, you are head of Caribbean Airlines and our passenger experience is comparable, or not, to others offering similar services in the region. To your competition, is it comparable or is it something that needs some work to improve? Mr. Mohammed: I would say that it exceeds what is available in the region. Mr. Chairman: It exceeds what is available in the region? Mr. Mohammed: Yes. Mr. Chairman: Thank you very much, that helps me with a response. I now give the floor to Mr. Karim. MP Karim, you have the floor. Mr. Karim: Thank you very much, Mr. Chairman. Let me add to the Chairman’s welcome to all of you, and particularly to the chairman of the airline, and the vice- chairman, senior executives, to wish you a very happy new year and a very successful future with CAL. I think when I looked at the clock behind me we may have started within your OTP of 15 minutes, so, we are kind of on schedule since you are here. I just wanted to get straight into some of the important matters, and I am looking at the org charts that you would have sent on. Now, an airline, for example, as Caribbean Airlines is a very important national asset to Trinidad and Tobago, and has contributed in its predecessor days of BWIA, for a number of years, to the welfare of our citizens and also to the country. But, over the last year I noticed that you have not had a substantive CEO, nor have you had a VP of Commercial Operations, and Mr. Quong Sing, I think, is acting in that position, but we are running a commercial operation. Can you indicate why

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these positions have not been filled to date? Could you give us a sense as to what was the process? You do not have to give us the names. And, by when do you expect these positions will be filled? For example, the CFO had acted, Mr. Tang, as the CEO before now, and clearly I will ask a subsequent question, but for an operation like this it is my view that you must have substantive persons in positions of critical decision-making like these. Mr. Mohammed: Member, when the board received its letters of appointment towards the end of October, I think my second duty at Caribbean Airlines would have been to sign an appointment letter for Capt. Singh, and that would have been perhaps two days of receiving my letter of appointment. What I can say is that the previous board engaged the services of HRC Associates to fill two key positions; one being the office of the CEO, the other being the office of the Chief Financial Officer. As a board we elected to continue that process because we recognize that the organization needs permanent appointments at their leadership positions. So much so that I can report to this Committee that last Thursday we actually interviewed candidates for the CFO and the CEO positions. We do believe that what is before us in the case of the CFO that there is a strong likelihood that one of the candidates interviewed last Thursday will be appointed. However, at the CEO level, the shortlist that was presented to us, only one candidate has elected to move to the interview process which we did conduct last Thursday. And therefore we believe as a board that we should not interview only one candidate, but perhaps go back out to market and identify individuals that are suitable for the office of the CEO. Mr. Karim: Thank you very much. Might you be able to advise the Committee, and by extension since we are live, the national community, by what time you expect—the latest time if we were to ask—that these appointments will be made? And secondly, there are a number of other vacancies we see that have not been filled

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on the establishment, could you identify those vacancies? Or oblige, I may have it here, I would just want to confirm. And by what time you expect those vacancies also to be filled? Mr. Mohammed: The top priority for the board will be the office of the CFO/CEO and by extension, which is not on the org chart, but we recognize that the airline requires the office of a Chief Operating Officer. In relation to the CFO position, we believe at the end of February we will be able to confirm a person; in relation to the CEO, we are unable to commit, except to say that we recognize and we are treating with it with extreme urgency in having that office filled. One of the things that the board is mindful of is operating in haste and making unsuitable appointments, especially at the leadership level. So, we will be looking for the best talent that is available at the CEO and COO levels. Mr. Karim: Just a follow-up. Mr. Chairman, you know, I recognize in all things haste might not be the most expeditious decision, but you had 15 months since we had a new administration in place. I mean, you may not have had a new board, and we can see that, but certainly a matter like this should have been, in my view, attended to quicker than now. As a follow-up, the office of the CEO—and let me congratulate Capt. Singh, because he would go into the records as being there, I have a clipping of the newspaper when you celebrated the 10th anniversary, congratulations to that. But, I noticed that you have 75 persons who report to the CEO, now some of that may be very necessary, it may be security, it may be other things. Could you elaborate as to what constitute these 75 persons? And, is it normal? And if so, do you get the efficiency and the productivity with one individual, the CEO, having to account directly—in addition to the entire 1500-plus—of the 75? Capt. Singh: Member, thank you. On direct reports to me on the org chart, there are 12 persons, as shown at the org chart.

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Mr. Karim: I will just refer you to Item (ii) on the management structure, which is page 1 of the responses that I have from you. So, I was just really referring to that. If there is a change you can so indicate. Capt. Singh: Chairman, through you, I will ask Ms. Guy to respond on the CEO’s office. Ms. Guy: Thank you very much. The number next to the offices there reflect the number of people in the particular department. The CEO’s office is a department so it has 75 people in the office, but we have 12 direct reports to the Chief Executive Officer. Similarly you would see maintenance and engineering 340, it is the headcount in the particular area. Mr. Chairman: Sen. Baksh. Miss Baksh: Chairman, through you, welcome to the Caribbean Airlines team, a pleasant good morning. This is just a follow-up question, well, a follow-up from member Karim’s question. Does the profitability of the company allow for such a top heavy management structure? Mr. Mohammed: One of the tasks that this board intends to undertake will be an entire review of our manpower requirements, not just at the junior, but at the senior executive level. At this point in time, as Chairman, I am unable to say specifically that we have the capacity to support that structure. Miss Baksh: My other question points towards the strategic direction of the company. In your submission reference was made to liquidity constraints and the Tobago air bridge fare; one, what assets are being considered for liquidation? And two, has the proposed increase in the air bridge fare been sent to the Minister of Finance? Mr. Mohammed: Member, first of all, in the context of the air bridge, that service is deemed an essential service, and we do move approximately, between January to November 2016, we moved in excess of 868,000 persons on the domestic air bridge.

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It is a significant number of people that we moved. In relation to the fare on the air bridge, we are controlled—that fare is controlled by policy direction, and therefore the determination of that fare is determined by what level of support that the Government would like to provide to the citizens on the air bridge. We do believe, and the records will reflect, that it is an operation, and that is the air bridge segment. It is a non-profitable route for the airline, but we are committed to providing the support and the mandate that we have been charged with in providing that service. Mr. Chairman: Sen. Baksh, would you permit the Chair? I have a follow-on to the chairman on this. I have also looked at the issues that you have had and I am asking, is the only way out for Caribbean Airlines, regarding providing adequate service on the air bridge, a fare increase? Are there no other strategies available to an airline to say add-on charges? I know you have switched over to the Amadeus system that allows now for added on services. I think the airline has to be creative rather than looking to the State, and my question is that, because we operate in an environment where the State is constrained in the funds that it has; and I think it is incumbent upon the airline in this situation to really look and say, could we propose something that does not necessarily burden the State any further? And, if it is not palatable politically well, that is a whole different issue, but, at least I would think that someone in the airline could say, listen, let us institute a baggage charge. We charge the first bag free and the second bag you pay TT $25. Something! There needs to be some way that the airline looks to ways and proposes to the Minister of Finance that which is palatable. I think that citizens, based on the feedback that we have gotten, are not necessarily enamoured by the style of entities that their only recourse seems to be getting more money from the State, and certainly citizens are not in a condition to bear an increase. But if there are ancillary services and ancillary charges at the airline, has that been a consideration of the airline, and have proposals along those lines been made to the Ministry of Finance?

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Mr. Mohammed: Chair, Caribbean Airlines, first of all our fare structure on the air bridge is governed by certain rules and that includes the ancillary charges that we can pass on to passengers. For example, we all, I am assuming, have travelled and have at some point in time had to pay a day change fee. Caribbean Airlines, first of all has been operating this route for the last 10 years, since 1994, at TT $300. The subsidy on that fare has remained the same notwithstanding operating cost, and the airline industry is based in US dollars. So it recognized that maybe 1994 currency of $4.75 to approximately seven at this point in time, how much of an impact the airline have had. I want to say to members that at the airline level, again, we are confined in terms of what approvals can be given for us, including something as basic as a day change. Mind you, we also have in terms of service that we are referring to, over 25 per cent of our passengers are no-shows with no consequences or no charges passed on, additional bad charges. We have looked at a series of initiatives that we believe can be passed on as a direct cost to customers without interfering with that flat fare that we operate in. But again, that is left to the authorities who govern those charges that we can apply to make the determination. We can only recommend it. Mr. Chairman: So, let me be clear, you have considered ancillary charges, day change fee, no-show penalties as applies across the entire airline industry in the world. You have considered them, but you have not made the proposal to the Ministry? Or you have made the proposal and have gotten a blow back? Or, you are not allowed to make those proposals? I just want to be clear. Mr. Mohammed: We can make recommendations to the various authorities in terms of what we would like to do. Those—unfortunately, the powers that be do not lie in the office of Caribbean Airlines. Mr. Chairman: That is fine. All I am asking is, as a management you are running a business, you are running a route that is travelling almost a million passengers a

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year, you are losing money hand over fist. If the Government and the powers that be, as you described it, are not willing to grant a fare increase, I think it is incumbent upon the company to propose additional ways in which we think we can raise revenue to make the operation more sustainable rather than doing a fare increase, and I think it is incumbent upon the company to at least make the proposal. So that I would have preferred if you could sit here and say, listen, we have made proposals for these changes and they have not met favour with the powers that be, whoever those powers may be. So, I accept your response and I just wanted to be clear. Mr. Mohammed: For clarity if I can, Chair, those recommendations were in fact submitted and we are awaiting responses. Mr. Chairman: Excellent. Thank you very much. I think Sen. Baksh had a follow- up question. Sen. Baksh you had a follow-up question? Miss Baksh: My question was really, how has Phase I of the new Passenger Service System—that is the PSS—benefited the company thus far? Mr. Quong Sing: There are both, one, customer service benefits in terms of how we are able to identify the customer such that package it for them; and, two, benefits in terms of efficiency and cost benefits. We have recognized somewhere in the vicinity of about 20 per cent savings in the software comparable to what we have been using previously. Mr. Chairman: I now ask, Sen. Henry has a question? Sen. Henry, you have the floor. Dr. Henry: Morning everyone and happy new year to all of you. Before I ask my question, I have a number of questions but I will just take a couple in this round. I just want to preface it by saying, I spent a lot of time dealing with Caribbean Airlines as an Opposition Senator between 2010 and 2015, so I have to be a bit cautious in terms of some of the questions I have in mind. But, to follow up on the Tobago air bridge situation, what I have never really gotten is an explanation as to why is the

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route really unprofitable and what are the real constraints on making the Tobago operation viable? We hear a lot of old talk, but we have never heard a proper explanation as to why is it so difficult. Is it just a matter of raising the fare to something that would become bankable, or are there other issues? Secondly, the type of aircraft that is being used now, we have been hearing a lot of complaints about the ATRs being down and you have to send a jet half way through the day to take up the slack, and I would also like to get, and also get it into the public domain as to what are the implications, when things like that are done, for the financial viability of the company and the route? Because we never get a proper explanation on these things—if one of the operations or the financial people might want to tackle this. Mr. Mohammed: Chair, if I can respond to member’s last question first. In relation to the ATRs, first and foremost we need to inform the public that Caribbean Airlines safety record is first and foremost. As an airline we recognize that there is no room for error. Any error in the aviation industry is catastrophic. The airline has a very sound reputation in terms of its safety record, and we would like to place that first and foremost in the public domain. The question of the reliability of the aircraft, one needs to recognize—and I say this in the context I am not an aviation engineer nor is CAL an aircraft manufacturer, but we will speak of our experience operating that type of aircraft. In or around 2011 thereabouts a decision was taken to move Caribbean Airlines away from the Dash 8, that it traditionally would have operated, to a new ATR fleet. The then chairman would have ordered or bought nine of those aircraft, four were subsequently cancelled, so the fleet comprise of five ATRs. What is unique about that specific utilization of that aircraft, Caribbean Airlines was a launch customer in the Caribbean for ATRs, so those planes had no history, or that specific model, if I might say, had no history operating in the region. Caribbean Airlines

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acquired those aircraft. But we also need to understand the difficulty in operating the air bridge. The aircraft undergo extreme heavy cycles; that is take offs and landings, but it is also a very short flight. You are limited in terms of the altitude you can get to for cooling, you also have the high impact of the ambient environment that we are operating in, RE corrosion, and what we have done, and that is this new board, when we came in one of the first things that we elected to do, because of the unreliability of the ATR fleet which predominantly services the domestic air bridge and some of the our regional flights, we felt it fit that the president of ATR America should be summoned to Trinidad because we felt that for too long those issues have been allowed to occur. The president of the ATR did come to Trinidad, and we do have very specific undertakings from ATR to find us—and we are not certain at this point in time whether it is a manufacturer’s issue or a maintenance issue, but we need to drill down in terms of what is causing these planes to be so unreliable. And we have received a commitment from ATR that a suitable person will be identified and dispatched to Caribbean Airlines to assist us in determining the issues behind the non-performance of those aircraft. 10.55 a.m. Dr. Henry: So, Mr. Chairman, are you saying that ATRs have been a disaster? Mr. Mohammed: I would not want to refer to an aircraft manufacturer and their product— Dr. Henry: In the performance, not— Mr. Mohammed: We are unable to determine that at this point in time because we are not certain whether a different aircraft type after a period of use might not suffer the same issues and challenges. So we would not want to get to those conclusions too early. Dr. Henry: Okay, but I also wanted to get some clarification for the public about

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the cost consequences when you have to use the jets to cover for these ATRs. Do you have any information on that, anyone? Capt. Singh: Chairman, through you to the member. We have developed a schedule for the air bridge and in developing the schedule which we used in 2016 and will use in 2017 for the air bridge, we have identified the peak demand periods on the air bridge. It is not possible to provide the level of lift that is required and when we examine the demand we see that, for example, the high demand on a per week basis will exist at the end of the work week, usually starting midday Friday and work its way into Saturday and then everyone wants to return on a Sunday. So the demand is directional, mostly directional when the peek demands occur and so in order to meet those demands it is required of us to supplement our lift capability with jet aircraft. We have therefore built our schedule for 2016 and 2017 going forward with jet aircraft operating on the route. Dr. Henry: I would like, taking a hint from my Chair, I mean, I would like to suggest if you could provide some of this in writing. But I am still not getting an answer in terms of the cost implications. It is all good that you mention that you built in the jet into the schedule, so you already cater for the peak periods on the Sundays as you outlined. But I am not getting an idea of what escalation in cost, because if as the Chairman said, the ATRs running into problems because of a short flight and their altitude and so on, what are some of the problems that should be amplified when you use a jet. Mr. Mohammed: If I can, member, for clarity, we would like to suggest that it operates around—the cost is around three times on a jet versus an ATR. Dr. Henry: Thank you very much. Mr. Chairman: If you would permit me I have a—I would like to interject here as we are talking about the ATRs. I have a question from a member of the public, because I understand the Twitter page and the Facebook page are quite lit up. So I

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have a couple of questions from a member of the public along the lines and one of the questions asked, we spoke of the issues about the ATRs, how many of the ATR fleet are currently operating? It is the understanding here providing that a couple of them are down. How many of the ATR fleet are currently operating? Capt. Singh: Three of the five ATR aircraft are operating. Mr. Chairman: How many of them are operating specifically on the air bridge service of that three? Capt. Singh: I would say that they all operate on the air bridge. Mr. Chairman: They all operate on the air bridge. Okay, another question also is that one of those particular ATRs, the registration number 9YTTA—within the past 14 months there has been five incidents of hydraulic leak, engine fire indication, from October 2015 to December. There has been five essentially inflight emergency causing the flights to have to do things that they normally do not have to do. Five incidents on one aircraft in 13 months tends to flag that there is something deeper, so that this aircraft, the registration is 9YTTA and this is public information, this is available, you can find this on all of the good places where the wonderful team at the Parliament found it. I would like to ask a specific question on that particular aircraft, because you have an aircraft that had four fire engine indications within 12 months. Something suggests that there is something endemically wrong. Is this aircraft on service or is this one of the aircraft that is currently down? Mr. Mohammed: Chair, that aircraft, as a board, I believe it would have been on my first day and the first call I received from the acting CEO would have indicated that there was a warning. We need to inform the public that, first, there has been no fire on board, there is no evidence of any fire in our engines, those are simply warning indicators. We took a decision that TT Alpha will be grounded. We felt that the frequency of that occurring poses a risk and therefore we have grounded that

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aircraft and it is in that context that the ATR was summoned to Trinidad to provide us with a definite plan in identifying what is wrong with that aircraft. Mr. Chairman: Is there any ability for the company to be able to say to ATR, listen, we have an aircraft and in the aviation world five indications, even if they are just an indicator going off, five indications in 12 months is highly unusual. Is there any way that there could be some mitigation from ATR rather than we just sitting, waiting on them? We purchased the aircraft from them, five years for operating is relatively young in aircraft years and an aircraft giving this type of indication. Is there any recourse that Caribbean Airlines has to ATR regarding this specific aircraft? Mr. Mohammed: Chair, I am delighted that you have asked that question. What we have found as a board of peculiar interest is that that investment was over US $200 million. Persons at Caribbean Airlines found it fit to waive its right to sue the manufacturer. As a board when we were made aware that this warning started, I think in 2014 or 2015, thereabouts, and continued for that long, as Chairman I felt that that was totally unacceptable. And therefore some level of urgency needed to take place. We have obtained a legal opinion from our attorneys in London and we are looking at all possible options that are available to the airline in pursuing whatever course of action that is deemed necessary. Mr. Chairman: Well, I thank you for your response because it is deeply concerning to me as a fairly frequent traveller. When you go on the website that log these, I actually have a subscription and I get emails and responses when there are issues. So that five indications, even if nothing actually occurred on the aircraft, it tends to signal that there is something fundamentally wrong and I would ask the company to make sure it pursues whatever legal options that are available, because there seems or it suggests that there may be something wrong with this aircraft. Okay, I was just dealing with a question from a member of the public and

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weaved my particular issue into that as it was related. I now would like to give the floor to MP Leonce. MP Leonce, you have the floor. Mr. Leonce: Chair, thank you. Before I ask my question, just on the last note you raised, you said that persons of the past waived their right to sue the manufacturer. Is the legal advice geared towards the manufacturer alone or also that the persons or personnel that would have been engaged in that negotiation? Mr. Quamina: Chairman, through you if I can respond to the member. The contract that exists between ourselves and ATR provides for a three year warranty period which in my mind on a brief reading suggested it is somewhat short, but it has a three-year warranty period. In exchange, forgetting the three-year warranty period, the contract waived certain rights thereafter. We are at present exploring the legality of that waiver in an effort to see, as the Chairman pointed out, what avenues are available to us, insofar as, recourse is concerned in relation to the concerns that we have in relation to that particular airline. And just to also comfort the Chairman, the fact about it is that this precisely was the subject matter of the meeting that we had with ATR to point out the fact that the regularity of these warning lights coming on is unacceptable. As I say, ATR had their top engineers in Trinidad for a substantial period of time looking at the aircraft and as the chairman said there is somebody here on a permanent basis and they also brought their top engineers and then there is now going to be somebody who the chairman has required them to install in the country, somebody of a very high level who will look after the aircraft to ensure that there is no recurrences of these events. Mr. Leonce: Chair, through you. When do we anticipate a resolution of this issue? Mr. Quamina: ATR has already responded to our, and I would put it in inverted commas, “demands”. We met, I think, probably on a Tuesday and they were required to respond to our requirements by the Friday which they have done. The person is expected to be in the country within the next month I think or something

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to that effect. And you would also, ATR also supplied an aircraft, a wet lease aircraft as a consequence of our requirements at their cost, so to supplement the shortfall in services as a result to the grounding of the 9YTTA aircraft. Mr. Leonce: Thank you. That is the Spanish airline? Mr. Mohammed: It is Swift Air. Mr. Leonce: Okay. The question that I initially wanted to ask was based on your 2016 strat plan. Now you all outlined a series of recommendations based on the strat plan and some of these would have been, as you Chair would have mentioned earlier, the fleet review and a study. I am seeing that you all also spoke about implementation of certain items like, fuel efficiency dash board. My question is in terms of the strat plan, being it 2016 strat plan, are there any objectives within the end of 2016 or within biannual objectives and what are the achievements based on the strat plan or what achievements we plan to achieve in the short to medium term? Mr. Mohammed: If I can take you to page 10 of our submission. In relation to our 2015 strat plan, continuing from there, we would have returned the 767, which was one of the key objectives. We also reduced the 737 fleet. We continue to consolidate our Kingston operations. The outstanding item from the 2015 which fed into the 2016 basically remains the fleet review exercise. In 2016 we have completed the network optimization. We have commenced the new brand and culture transformation. We continue to focus on cost management and revenue enhancement and again from 2016 the only item remaining in the 2016 strat plan is the fleet review. Mr. Leonce: Chair, through you, can a copy of these documents be made available? Mr. Mohammed: Yes. Mr. Leonce: Okay, thank you. Mr. Chairman: Thank you. Before I move on I think Sen. Mark is next on my list. I just wish to say that the questions from the Facebook page and the Twitter feed are

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coming in. So I will entertain Sen. Mark and then I will try to deal with, because members of the public are clearly interested in what is going on and we keep getting them, questions are flowing. So I have a whole page of questions from the public, but I will now ask Sen. Mark to take the floor. Sen. Mark. Mr. Mark: Thank you, Mr. Chairman, and good morning to everyone. I know that the Chairman mentioned and I tend to agree with him on the safety record of Caribbean Airlines. But in the last few years, two years, we have had some very unfortunate incidents—accidents, on the ground, particularly at Georgetown International Airport, I think that is Cheddi Jagan International Airport, which has caused some concern in the minds of the public about the safety record of Caribbean Airlines. I am wondering whether you can share with this Committee what is the status report on, I think, two accidents which occurred at that international airport in the last, I would say two years, if I am not mistaken. What has happened and who is responsible? What has been responsible for these developments? What measures have been taken to ensure that these “accidents” do not repeat themselves in the future? That is a concern I would say the public has as it relates to Caribbean Airlines. The other one I would like to raise, you can take a note, is your cost structure strategy where you are seeking to get into that low range costing as you have mentioned. Is there a time frame that you have set yourselves to make Caribbean Airlines break even and then begin to show signs of profitability? What is the timeline for that to happen with Caribbean Airlines? Mr. Chairman, if I may ask another question before I get my responses. What percentage of CAL’s aircraft or fleet is owned and controlled by the people of Trinidad and Tobago? What percentage is leased by CAL and what is the accompanying cost of such an arrangement? And is there any plan or plans by CAL to upgrade and enhance its fleet which I must admit many of them appeared to be

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dated and I believe in the 21st Century CAL need to modernize its air fleet, particularly, on the international routes. I would like to know whether there are plans afoot by Caribbean Airlines to modernize their fleet and give the passengers not only value but give them comfort in many respects that might be in deficit at this time. These are my initial questions. There are many more that I have lined up for Caribbean Airlines’ management and the chairman, but these are my initial concerns. The public is also worried and that is why I am speaking on these issues to get clarification for the public to feel a sense of comfort as we go forward. Mr. Chairman. Mr. Mohammed: Member, if I may respond in no specific order. In relation to aircraft, the company operates 17 aircraft. The five ATRs is owned by the airline. The 12 737, they are lease aircraft. As a percentage, approximately 30 per cent is owned, 70 per cent lease. In relation to the fleet review, we have recognized that it is not just the cost of travel, but travelling needs to be a customer experience from the point of getting online to buy your ticket to when you check in, to when you board the aircraft, to the experience on board the aircraft. And our fleet review exercise captures all of that. You have a demanding public that has been exposed to functioning headsets, individual monitors for entertainment system, more comfortable seats, larger overhead bins and therefore our fleet review exercise which is taking place as we speak captures all of those concerns that you have raised. While we do have aircraft that are not new, we need to say that they are very safe and reliable and that is why we continue to fly them. Our fleet review will capture not just the customer experience on board but what aircraft is best suited for the destinations we need to fly, the routes we operate on, the reliability and the cost, and that exercise I want to assure you continues as we speak. In relation to the profitability of CAL, I feel firm to say that we are making

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that turn. And I would like to thank the team at CAL for that resounding effort. They have recognized and mind you, as a taxpayer I am very concerned about what we spend moneys on and therefore we do believe in 2018 we should be able to break even. Our numbers indicate that 2016 was better than 2015. Our numbers suggest that 2017 will be better than 2016 and therefore we remain hopeful that by 2018 CAL perhaps will no longer be a burden on the taxpayers. In relation to our safety record in Guyana, the incident involving the Fly Jamaica, I am not sure if that is what you were referring to; an incident perhaps about two months ago and then one in 2011. Mr. Mark: Yes, yes. Mr. Mohammed: The most recent incident we make no determination on that matter and therefore we will offer no comments except to say that that is being investigated at the moment. In relation to the 2011 incident, I will ask Captain Singh to provide the specifics on that. Capt. Singh: Chairman, through you, member. The incident of 2011, runway overrun was investigated by the authority responsible for Guyana, Guyana Civil Aviation. They enlisted the assistance of the National Transport Safety Board of the USA. Caribbean Airlines participated fully in that investigation. We were therefore informed very early in the investigation on what may have occurred that caused the accident or incident rather. Having obtained the knowledge we immediately started remedial training as well as training for all crews. That included pilots and flight attendants. The actual finding of the Guyana Civil Aviation Authority was that it was caused by human error. You would find that the majority of accidents or incidents in the aviation business can be put down to human error. Therefore, it is important that we learn from incidents and accidents and we learn as soon as possible, so that we may take

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the correct actions in training our crews. Therefore, we carried out full training and when the report was eventually laid we found that we had conducted most, if not all of the training that was required for our crews. Mr. Mark: Mr. Chairman, I know you have your people, but may I ask a question on the air bridge, Mr. Chairman, through you. What is the actual cost, the economic cost of a ticket, a return ticket to Tobago? And what is the actual subsidized cost for the citizens of Trinidad and Tobago, the taxpayers at this time? Could you share with us what is the actual cost in terms of value? What is supposed to be the real cost of travelling to Tobago and back and what do we pay as customers? On a yearly basis, Mr. Chairman, through you, what would be the subsidy coming from taxpayers in T & T to maintain and to sustain this air bridge between Trinidad and Tobago. I think that it is an area that people would like clarification on as well. Mr. Mohammed: Member, first of all let us first of all state the existing cost. It is $300 round trip which the airline receives a subsidy of TT $100 per adult passenger. We do not get a rebate or a subsidy for any child who may be occupying a seat on the air bridge. In terms of the air bridge subsidy, the Minister of Finance in presenting his budget makes an assumption of the estimated number of passengers that we project to move on the air bridge over an annual period. For 2017, the sum of—it is approximately TT $41 million has been budgeted for CAL as the subsidy on the air bridge. 11.25 a.m. In relation to operating costs, we estimate that figure, depending on the price of fuel, in or around the $600 to $700 range, round trip. Mr. Chairman: Thank you very much. I am going down my list. I have MP Karim next. MP Karim, you have the floor. Mr. Karim: Thank you very much, Mr. Chairman. Chairman of the airline, much

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has been said this morning about the ATRs and their purchase. I want to ask whether there is any truth that the decision to buy—the recommendation to buy the ATRs were made before 2010. I have some other questions I want to follow up on, but I want to get specifically whether there was a recommendation to purchase these ATRs before May 2010. The other question I want to ask is: you spoke about 9Y-TTA and you have 9Y-TT Delta, which has been out, you indicated, but you did not say for how long. Is it for the same reason that both aircraft are now out of service maybe at various occasions? Is it that same problem that they are facing? Another question I want— I know you have been stressing quite a lot, and we also look forward to that when we purchase a ticket, that we purchase an experience on the airline. And I know that you are looking at the “wow” experience of customers. But you operate a fleet of 12 Boeing 737-800 and I am dealing with that now. Can you tell us on a flight, wherever—and particularly to the northern destinations—out of the 154—I believe those are the seats you have—what percentage of those seats are serviced, so if for example, with blankets, with headphones? Because I read in the newspaper about another experience which I will raise later on. But I want to ask you that question specifically, because if we have to compete with other carriers and we are not satisfying the customer needs for a simple item, and which I am advised—and therefore I am asking you to confirm what percentage of the 154 seats are serviced with blankets, headphones? It might sound trivial, but my substantive question goes back: Was the decision to purchase the ATRs made before the—or the recommendation was made before May 2010? Mr. Mohammed: Member, in relation to customer experience, if I can address that first, all of our passengers are provided with headphones. However, we must recognize the fleet of aircraft that we are operating, that all headphones may not be operating, and therefore, I am unable to tell you we have 500 seats and two are not

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operating. I regret to inform you that I cannot answer that, specifically. Pillows and blankets—I travel on many airlines. If you look at the many budget carriers, for example, American Airlines, which is now, I think, considered a budget airline; jetBlue; Spirit, et cetera, you have to pay for those pillows and blankets. And the question of what percentage is available—again, we cannot answer that in the context because you may have 154 passengers on board. Do you assume that 154 would like to have a blanket or a pillow? We do carry supplies on board and we try to meet the demand of the customer while on board as far as reasonably possible. Unfortunately, I do not think any member of the team can give you a very specific answer, that we carry 5 per cent pillows per flight. The availability of these items is all subjected to what is on board and the passenger load that is on the aircraft. In relation to TT Delta, that aircraft did suffer a series of warnings. However, based on the reviews by the ATR team that was dispatched to Trinidad, that aircraft was scheduled over the—a test flight was done on Saturday. It was successful. The engineers identified that there may have been an air inflow issue and therefore we remain hopeful that that aircraft, having undergone a successful test flight on Saturday, will be back in service shortly. And in relation to your 2010 enquiry in terms of whether a decision was made before May of 2010, I have asked members who are with us today and they are not in a position to confirm whether or not such decision was made to buy the ATRs prior to May 2010. Mr. Karim: Okay. I was asking about the recommendation to buy the ATRs before May 2010. I want a specific answer. Was there a recommendation made by whoever it would have been? Because, you see, I am raising this in the context where you have persons acting in significant positions and we have to be honest to identify whether the person who is in charge—the Chief Executive Officer, acting, is also the accounting officer. Or is there somebody else? This is a very serious thing. It

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is about life and limb and so on, and it is important. So while persons may be of the persuasion that what has happened is the previous administration may have bought—and one of my colleagues used an adjective to describe—I am asking whether on the records of Caribbean Airlines, if we were to do an audit, whatever it is, will we be able to find that a recommendation existed for the purchase of the ATRs which is ATR 72-800? Mr. Mohammed: Member, what I can say is that we rather not speculate in giving an answer. If it is a question that you would like us to respond back to the committee, we will be more than happy, but we are prepared to speak in terms of what is available for us and that is, those aircraft were purchased in 2011. Mr. Karim: I would like to have it in writing, with the Chairman’s permission. But with respect to the air bridge, is it correct to say—and I do not know the frequency— that you operate a jet service—one of the 737s—out of Tobago, nonstop to JFK? And if that is so, if there is a JFK route—I am just asking. If it is not so, well, then I will withdraw the question or I would not further it. But if there is a route that is serviced by a 737, how did that impact upon servicing the air bridge in the light of two of your ATRs being down? Mr. Mohammed: Member, when this board was appointed in late November, one of the things that we informed the management of Caribbean Airlines, there was an anticipation of moving in excess of 10,000 passengers, or maybe closer to 15,000 passengers over that December period, and we took a decision in the context of, first of all, air safety, to ground aircraft, but we were not prepared to disrupt our passengers who would have planned months ahead on their vacation. We took that response—that undertaking—in the context that irrespective—for use of a better word—of the cost to the airline, we have an obligation to move our passengers that have purchased tickets. We did, over the Christmas period, wet lease a jet aircraft from Miami Air. That aircraft operated the Port of Spain/Fort Lauderdale segment.

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We utilized our jets on the air bridge. We consolidated flights. But most importantly, we were able to move not just our confirmed passengers but every single standby passenger, on a daily basis, to their destination. In regard to the jet aircraft, there is a jet service that starts in Trinidad. It stops in Tobago and then there is an onward to JFK once per week and the same on a return segment. Mr. Karim: Could you indicate what is the payload on that? How well is it doing? Mr. Mohammed: Before we get to the payload, I would like to say to the members that that segment, the airline receives support from the THA in operating that flight. Mr. Karim: Could you also indicate what that support is? Mr. Quong Sing: Member, through the Chair, I do not have the numbers in terms of how much it is for each year’s support, but I do have the load factor, that we analyze about a 65 per cent load factor on it between Tobago and New York. Mr. Karim: Do you think that is satisfactory in terms of the investment costs and the subsidized costs? We would like to have, Chairman, through you, the cost in writing. Mr. Chairman: I think we will formalize the request in writing. The Chairman would like to interject just to quickly follow up on something you raised. Mr. Chairman, the first question I ask is about the passenger experience, and how would you describe your passenger experience? And before that I had asked, how would you describe your airline? Because if you are running a hybrid airline—and you are grouped as a hybrid airline—issues that have been raised by the Members, as free pillows and free blankets, do not arise. So that this is where sensitizing your customers to what you are going to do and managing their expectations is important. So that if you, as you have indicated, your airline’s view is that you are trending towards being a hybrid airline; other hybrid airlines do not offer those services for free; they offer them at a cost, and if customers understand that this what—and I am

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helping you with why I asked that question first so that I can cascade—everything flows from what you see the company as. So that is very important for us. So that the question that the Member asked as to whether or not you provide these services, you should have been able to respond to say, “We are a hybrid airline”, and the service model for that airline indicates that this is what we provide and these are à la carte services. I mean, I have a big graph about, you know, what hybrid airlines offer and the whole group of airlines, so I understand the business very, very well. And I myself have personally sat on aircraft for over three million miles and I have travelled—so I understand the varying offerings. But let me stop there. I have a question and it is about the costing. I understand your view about making sure that all the passengers who have paid for tickets end up getting to their destinations, and that is laudable, but there has to be a cost element in there. I understand that when you had to lease the aircraft from Miami Air, because it is a US-registered aircraft you cannot use it on the domestic. You had to pull off one of your international 737s off of its service to run the domestic route, but the lease aircraft is also totally coach class. So that persons who purchased business class tickets that were expecting to fly on a Caribbean Airlines service to Orlando had to be refunded their money because the plane was a totally coach service. Now this is information I found on your website, so this is no company secret. It is a release that I saw, that you had to refund. So I am saying, in hearing you, that you are trying to make sure that your customers are satisfied; if I, three months ago, purchased a ticket to fly business class and then a few days before I am told I have to fly coach and you are refunding me the difference, that diminishes my customer experience. Granted, you would have granted a refund. And these are the types of things that concern me, and I want to understand this whole chain of events; that the ATRs went down; you leased an aircraft, but you

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leased an aircraft that did not allow you to provide the full service. Was it that that was the only aircraft that you could have found in the short space of time to provide the service? I need to understand the chain of events that happened there. Mr. Mohammed: Chair, so what occurred was something that was not envisioned nor were there any contingency plans where your peak period, not just for domestic, but international travel—December is a very heavy month for travel. Therefore, when we took such a decision we looked at all available options on short notice; not just CAL but many other carriers wet-lease aircraft to assist during their peak periods. The team at CAL, I can assure you, looked at all available options that we could have in terms of a suitable replacement type for the ATR. Unfortunately, there are few operators within the region and very few that could have been made available to us on short notice. The aircraft that we wet-leased over the Christmas period operated on the Fort Lauderdale route, not Orlando route. And I can say that the Fort Lauderdale route, in analyzing what route we will fly that aircraft on, we have the least number of business class passengers on that route. Beyond that, passengers were offered the option of flying to Miami as an alternative. Passengers were given the option for a refund or the option also of having a day change if they so choose. Mind you, it is not an experience we want our customers to have, but we try to make that as minimal on the customer experience and giving the customer as many options available to them. Mr. Chairman: I just have one quick follow-up. Given that the genesis of this problem is the ATR going down and you had to wet-lease an aircraft to plug a hole in your international service because you had to take one of your international service jets out of service to service the domestic route, is there any consideration for ATR and assisting Caribbean Airlines with compensation on this issue? Mr. Mohammed: We would have addressed that and that is why my vice-chair

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would have said that one of the demands that we made of ATR is compensation. The Swissair aircraft that is on lease for the next two months is being fully funded by ATR as a consequence of their aircraft not being able to fly. Mr. Chairman: Okay, thank you. I now give the floor to MP Antoine. Brig. Gen. Antoine: A pleasant good morning. I want to go back to the air bridge and in your response—and I am quoting from you when you said that the route has become unprofitable. And in your response you have said you have made proposals to the Ministry of Finance. There is a third party in this—THA—but I have not heard any mention of the THA. If the route is unprofitable, are we only dealing with passengers? What about airfreight to Tobago? My question is: Is CAL functioning or working both with the THA and with the Ministry of Finance, and of course, with the Ministry of Tourism, to make this air bridge profitable? And are we only dealing with airfares in terms of passengers? But what of this bridge between Trinidad and Tobago?—because Tobago is heavily dependent on the Trinidad tourists coming to Tobago for all sorts of reasons. So in your discussions, in your proposals, are you taking into consideration the Tobago House of Assembly and is there a tripartite talk between the THA, the Ministry of Finance and CAL to make this air bridge profitable? Mr. Mohammed: Member, first of all, I would like to say this in the context of, one, it is an essential service; two, and very few essential services in this country are operated for profit purposes. We recognize, so much so, that within the short space of period that I have been appointed, I have visited the THA on two occasions, so much so, last week I have met with the Chief Secretary and previously in early December. The Caribbean Airlines team was also dispatched to Tobago to meet with the THA. That being said, we are committed to engaging all of the stakeholders. That includes the Chamber, the THA, the Hoteliers Association and any others, for they too have a greater appreciation of what the cost is, but also we

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recognize that there is a wider role in terms of, not just air movement, but the national development of Tobago and the country at large. Mr. Chairman: Sen. Baksh. Miss Baksh: Can the existing profitability of the airline sustain 15 passes to each member of staff for free travel? And furthermore, what factors influence the decision to increase the number of free passes from 15 to 20 in 2016? Mr. Mohammed: Member, first of all, I would like to say there is nothing that is free, and we need to look at that in the context of companies and their operations. We have asked the management team—because I do recall somewhere in the questions here that that answer was not provided, and as a board we are also interested in the context of how many of those tickets that would have been available to staff members, how much was utilized. And we are ascertaining that information at this point in time. We are also trying to assess the rationale behind the movement, of what would have been a lower sum to a higher sum of tickets being made available to staff and for staff travel. Mr. Chairman: Thank you very much. I now have to ask Sen. Henry to take the floor. Dr. Henry: Thank you, Chairman. I would like to turn to two issues that I have quite a great amount of interest in and get some responses from the team. One is the London route that was discontinued recently, and the issue of the 767s. Are we—or is the company currently wet-leasing a cargo 767? Is that true or not true? If you can confirm that. And are partial leases being paid still to the company that we got the 767s from? That is dealing with the London part of the operation that has subsequently been discontinued. My second set of questions has to do with the Jamaica operations. Can you give us an update? I sat in this Parliament several years ago and we got updates on what was the breakdown in terms of the operational difficulties with the Jamaica

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operations. Have we seen a turnaround in terms of profitability and some of the major issues of staffing and so on, that was happening with the Jamaica operations? I was informed, during a particular period in time, that we spent a lot of money training pilots who subsequently left without giving proper service in return for the amount of money that we spent on training them. Is this problem still existing at the airline? So two parts: the 767 questions and then the Jamaica questions, including the profitability and also the staffing issues in terms of the pilots and the training that we gave to Jamaican pilots in particular, or foreign pilots—not to pick on Jamaicans—and many of them subsequently did not stay with the airline but moved on to greener pastures. What is the status of that? Mr. Mohammed: In relation to the 767, there are two aircraft types: passenger and cargo. Caribbean Airlines does operate on a wet-lease arrangement, a 767 with a freighter company, and I am happy to report that that segment of our business is very profitable under that business model arrangement of the wet lease of a freighter 767. Dr. Henry: Can I stop you for one second, please? If it is profitable as a wet lease, did we not train pilots to fly those same 767s, so why would you wet-lease? Mr. Mohammed: No, that is a freighter aircraft, not a passenger aircraft. It is dedicated for freight and, therefore, we do not provide crews on that aircraft. I suspect you are referring to the passenger 767 that operated the London route. Dr. Henry: Right. Those were wet-leased. Mr. Mohammed: Yes. Member: No, those were dry-leased. Mr. Mohammed: Dry-leased, yes. So in relation to the 767 freighter, yes, Caribbean Airlines does wet-lease one of those for our freight services. Capt. Singh: Chairman, through you. Member, with regard to the Jamaica operation and training of pilots, at the absorption of the Air Jamaica routes there were routes

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flown by Caribbean Airlines and we had to do conversion training for the Air Jamaica pilots who were at the time qualified as air bus pilots. So therefore in order that the Jamaican pilots would operate our 737s, we analyzed, first of all, the number of crews that would be required to operate those services. Based on that, we trained crews. However what we discovered, that there was a high attrition rate initially with the absorption of the route. So we did train Jamaican pilots operating out of Jamaica on the 737 who chose, for different reasons, to move on to other carriers. And we have seen that attrition rate reduced significantly over the last two years. So we now have, what I would term, stabilized numbers for Jamaica in terms of the number of pilots operating out of Jamaica. Dr. Henry: So are you saying that there was nothing binding the pilots after we trained them on the 737s? There was no contract requiring them to stay with Caribbean Airlines after receiving the expensive—I assume training is expensive, so I could use the word “expensive” training—to convert from the air bus to the 737s? There was no stipulation that they had to work for us after getting this training? Capt. Singh: The pilots received contracts from Caribbean Airlines and included in those contracts was a requirement for repayment of training over a 24-month period. So those pilots who left Caribbean Airlines, having received training, would have been asked to make repayment towards their training. Dr. Henry: Just the overall profitability and the status of the Jamaica operations currently, could you shed any light on that? Mr. Mohammed: Member, the latest figures that we are in a position to report would be as of November 2016, and if I am correct, our Jamaica operations, except with the Kingston/Toronto route, shows negative. Mr. Chairman: Thank you very much. Before I go to MP Karim, I would like to first pose two questions to the Permanent Secretary, Ministry of Finance, who is here today, and if you would permit me. This question is a response to a point that was

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raised earlier advised by the Chairman regarding the company making a proposal to the Ministry of Finance to allow it to charge ancillary fees as one way of trying to break even on the Tobago route. I would like to get a response as to whether or not the Ministry has looked at that and is in a position to give a comment. And I would also ask if the Ministry has ever given consideration to looking at the Tobago service as is described as an essential service and to providing total coverage for that service, and rather than have the airline be struggling to find ways to keep it afloat, have it be totally covered by the State. I know we are in a currently constrained revenue situation but has there ever been consideration to that? Madam Permanent Secretary, you have the floor. 11.55 a.m. Mrs. Johnson: Yes, Chair. We did receive the request for the additional charges on the air bridge and we are requiring additional information from CAL in order to come up with a position on the matter. Mr. Chairman: Would you be able to say when you will be able to complete your consideration? How long has it been that you received this information, and could you give us a guide as to when you think you may be in a position to respond? Mrs. Johnson: We received the information in October of 2016, and once we get the information from CAL we should be able to give a decision by February so. Mr. Chairman: Thank you very much, Madam Permanent Secretary. The other issue could you please. Mrs. Johnson: Yes, the other issue. The Ministry has never considered having to reimburse CAL for the total cost of the air bridge subsidy. No consideration has been given to that. Mr. Chairman: Thank you very much. Thank you very much, Madam Acting Permanent Secretary, I am advised. If I have ruffled any feathers please forgive me, I did not mean to. I now go down my list. I have MP Karim requesting the floor.

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Mr. Karim: Thank you very much, Mr. Chairman. You did indicate that there were some of the adopted routes of Air Jamaica that were not doing so well and I suspect that apart from Guyana which is really the Guyana/New York, JFK, which is one of our cash cows as it were, do you have any plans to drop any of the routes and to engage in new routes? That is the first question. The second thing is given the circumstances of the day today, and you did mention that the airline should be looked at as an essential service and we know what is happening in the country—I do not have the current state of Petrotrin at this stage as we speak—but what contingencies have you put in place? Maybe it might not be your answer, but I am just asking as an airline you must have had deliberations. In the event that an occurrence like this happens today, what plans, what contingencies do you have in place to make sure you have your A1 fuel to have the airline running? And the third item I wanted to raise is with respect to the 767. Can you say whether the 767, which was engaged to Caribbean Airlines and leased to Caribbean Airlines, that aircraft is being used by Air Canada to service the Barbados and Port of Spain route; and if that is so, do we have any contingent liabilities attached still on our books with that 767? I understand that ILFC—I know about the leasing company, but I want you to deal specifically with the matters I have raised. Mr. Mohammed: In relation, member, to the Jamaica routes, as I said earlier the— first of all, I believe that Caribbean Airline should not be a charge to the Ministry of Finance. The fact is that we should envision ourselves as being a commercially viable enterprise. That is the mantra that I preach at Caribbean Airlines. The management team on a monthly basis prepares a P&L by route and we compare that to budgets, and it is only if you make such a determination will you know whether you should continue to be in a market or not. At this point in time we believe that the markets that we operate in, that we should continue to serve those. In terms of expansion, we do believe that if we can get the ATR issues

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resolved that there is a window of opportunity that we can grow this airline much more regionally without the addition of aircrafts. Mr. Karim: Can I just ask since you are on that topic? Is it possible you can tell us, if not now if you can supply us at another time or in writing, your individualized routes and what your P&L is on it? Mr. Mohammed: We will be happy to provide that information. But yes, Caribbean Airlines, we have recognized that there is opportunity for us to grow with better utilization of our aircraft. We believe that with better utilization we could in fact fly greater frequency, more destinations. We are looking at new opportunities within the region as we speak. So much so, that on one of those destinations we have already made the application and we are awaiting the approval from the regulators. Of course, the impending issue, we have been in this room so I am not sure whether or not Petrotrin and the union have been able to resolve. So we are unable to say, except that CAL, we have made contingency plans to ensure that we continue to operate our schedules. We do have arrangements in place with NP, and we do have arrangements in place with the various airports that we fly into, in terms of taking fuel from those destinations. The 767 in relation to whether or not Air Canada is operating that, we know Air Canada Rouge picked up the lease on that aircraft. I am unable—I am being informed that not entirely, but we do have commitments on that lease until February 2017. Mr. Karim: So in other words, we also have a liability for an aircraft being operated by Air Canada Rouge that comes to Trinidad, and our 767 could have been utilized— I am just looking at the business model—out of Trinidad unto YYZ, or out of Cheddi Jagan unto Toronto? Mr. Mohammed: I do not know the specifics of the lease in relation to ILFC, but

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what I can say is that generally the aircraft types is also dependent on your frequency to the destination, and I will want to suggest that based on, not just once, but in some instances twice or three times daily that perhaps the 767 might not have been the best type of aircraft to operate. Mr. Karim: Well, that might be debatable, eh, in terms of the—I know you are looking at Airbus versus Boeing and that, we could argue that at another time. But I just wanted to ask you in terms of the—because the Minister of Finance did indicate that 2017 might be a break-even point for the airline and you indicated in 2018. In view of that and we are talking about petroleum, how are you going to be paid your $42 million from Venezuela, in US or bolivars? How are you going to get this money? Has there been any discussion on this matter with the recent visit to Venezuela? Mr. Mohammed: Yes, member, and we are a bit of foreign diplomacy here. I have to say that Trinidad and Tobago have engaged not yet with this administration, but with the prevision administration in terms of the repatriation of those funds to Caribbean Airlines. The airline remains hopeful that the commitment given by the Government of Venezuela will materialize. Of course, we have to recognize that those assurances have been given in the past, but we do believe that through diplomatic channels that those funds should be repatriated in due cost. Mr. Karim: Mr. Chairman, just a side question. As I indicated before, Mr. Chairman of CAL, that you had been stressing quite a lot on the customer experience, and on page 28 of your responses to customer service policies and strategies, (iii), you mentioned your OTP within 15 minutes of industry standard. We have the figures for 2015, might you be able to tell us what that OTP figure is for 2016? I raise that in the context, did you have any situations of concern recently—maybe because of the season or whatever it is—with respect to the turnout of flight attendants from Jamaica; and if so, could you elaborate on that?

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Mr. Mohammed: In relation to the Jamaica crew, I have been told that we had a higher than normal sick call-ins. However, all of our flights we were able to man with our own crew. In relation to on-time performance, the statistics on—I will use the air bridge as one portion and then overall. In the context of operating over 14,000 flights on the air bridge annually and moving over 900,000 passengers, it is important to note that for 2016 on the air bridge, January to November 2016, we had a 78 per cent on-time performance on the air bridge. Domestic and internationally combined up to—sorry. So for 2016 on the domestic air bridge we had a 78 per cent on-time performance, and if you just allow me kindly to access some data I could respond to you. Mr. Chairman: I think we need to manage the process. I think you can supply the information to the Committee. We will formalize a request because we are running up on time. I have one quick follow-up before I allow Sen. Mark to take the floor and it goes back to the first question I asked. When MP Karim asked you about routes, whether you are planning to drop any routes, you indicated that you are planning to sustain all your existing routes. Here is my question. I looked at your submission and in more than one place you indicated that the New York route is actually one of your biggest routes where you are losing money. If you go on your website you are running probably some days, four flights a day. If you are running four flights a day and it is contributing to be other than the air bridge which we understand—but this is one of your marquee international routes and you are losing a lot of money—what do you have in mind to turn that around? I go back to passenger experienced. I have had a parallel passenger experience of leaving on your competition and coming back on CAL, and I would respectfully suggest—my experience is that the passenger experience, the gap is huge. From sitting on a seat—I am talking flying coach in one aircraft because they are all coach and flying business in Caribbean. I am sitting in what is called business and the seat

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is broken and it is all torn up. So I could understand why you are having challenges on that route because the product needs some work and I am saying that. So my question is: your JFK route is losing money on the submission you have, you plan to keep it, what are you going to do to allow you to turn it around? Mr. Mohammed: Chair, to just follow-up on the previous member, I can confirm combined domestic and international for January to November 2016 on-time performance of 77 per cent. I am happy to inform, member, that we have turned around New York. Latest figures, year to day, suggest that New York is now positive, and therefore I believe that the initiatives that we have been working on is bearing fruit. Need not say, we do recognize there is a lot more that we have to do, and your concerns in terms of customer experience is both tied to equipment and person, and therefore, our fleet review that we are undertaking will certainly address those concerns in terms of the customer experience on board. Mr. Chairman: Thank you very much. Mr. Mohammed: But New York is in the positive. Mr. Chairman: I just share it and I want you to understand my logic. Passenger experience is key. If you fly the ways I have flown, I understand passenger experience. I have had the whole range. I can tell you, I go one way in coach and the passenger experience is superior to coming the other way on the same route in what is called business. I struggle. Forgive me. Sen. Mark, I have kept you waiting; forgive me. You have the floor, Sen. Mark. Mr. Mark: Thank you very much, Mr. Chairman. I wanted to ask the Chairman, or anyone who is willing to answer: under the Constitution of the Republic of Trinidad and Tobago, state enterprises are mandated to submit what is called annual administrative reports. Could you share with us when was the last time administrative reports were submitted by Caribbean Airlines; and based on the

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period, could you give us an undertaking as to when you would be able to satisfy the submission of those outstanding administrative reports? That is my first question. My second question has to do with just a follow-up on the Chairman’s question earlier. When does CAL, Mr. Chairman, either intend to purchase new aircraft, or to provision relatively new ones on a long-term lease basis in order to enhance the customer experience, the passenger experience? I want to share my colleague’s experience. I believe that even if you have old aircraft but as you rightly pointed out, safety is critical, but I also believe you need to upgrade the product. Mr. Chairman, I want to be very blunt and frank with you. I find that CAL’s international flights do at times leave a lot to be desired, and whether, as my friend said, it is business class, or it is ordinary working-class/economy class, you find that the quality, the experience very poor. I know that you are new to the experience of chairmanship, but I really would like to emphasize that there is need to increase the experience, enhance the experience. It does leave a lot to be desired, and that is why I asked the question as to whether there is any intention either to purchase new aircraft, or as you lease aircraft whether they can be relatively upgraded so that the experience of your customers, whether they are citizens of this Republic, or from the wider Caribbean, could be taken on board seriously. That is my second question. My final question has to do with an audit conducted by KPMG. I wanted to ask the Chairman, or whoever you would like to designate or allocate the responsibility. First of all, there are two recommendations out of the series that I have before me that I would like to share with you. I go to page 12 of the KPMG’s audit and management letter and they speak to the issue of long-standing reconciling items dating as far back at 2007 involving unpresented cheques—I do not know what is going on in that department—unprocessed deposits in the bank statement, processed deposits not identified, wire transfers in bank statement not posted, wire transfers not in bank statements, and the KPMG went on to talk about the

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unpresented cheques not being written off when they become stale-dated. This is one aspect of a series of observations and accompanying recommendations. The other one I wanted to bring to your attention, Mr. Chairman, apparently there is some kind of ongoing dispute in this KPMG report between Caribbean Airlines and the Airports Authority. This is on page 21 where apparently the Caribbean Airlines apparently is paying some US 55 cents per square feet, and we understand from the report the Airports Authority is saying that you ought to be charged and be paying between US $3.50 to US $7.50 per square feet which could lead to Caribbean Airlines being in some very serious trouble in terms of outstanding payments, particularly in light where there is no formal rental agreement between Caribbean Airlines and the Airports Authority for the space it rents at Piarco. Now I would like to find out from the team that is here whether these recommendations have been implemented, and if they have been how have they contributed to improving the operations of the airline? Now as I said, Mr. Chairman, the team may not be able to supply all the information at this time, but you can give us a crisp summary of where you are and then provide us in a more comprehensive form a submission to the Secretariat. These are my three questions, Mr. Chairman, and I would like to ask my colleagues to provide us with some responses because there are serious matters here. Mr. Mohammed: Member, in relation to administrative reports I can confirm that these reports have been submitted to the Ministry up to 2015. Mr. Mark: The Ministry of? Mr. Mohammed: The Ministry of Finance, our administrative reports up to the year 2015 have been submitted. Mr. Mark: Could you indicate to us when those reports would have been submitted to the Ministry of Finance? Mr. Mohammed: July.

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Mr. Mark: July of 20— Mr. Mohammed: 2016. Mr. Mark: —16? Mr. Mohammed: Yes. Mr. Mark: And that would have covered up to 2015. Mr. Mohammed: Correct. Mr. Mark: Okay. Thank you. The Acting Permanent Secretary will have to answer why they have not reached Parliament, but continue, please. Mr. Mohammed: We recognize, like the Committee, aircraft type and customer experience, and I can report that the studies that we have done thus far have really brought up down to two aircraft types. So that should indicate that we have been moving with full speed ahead. The new fleet of Caribbean Airlines, and again subject to what the final report will suggest, will be the 737-800 max, or the A320s NEO. Again, we have narrowed down the aircraft type. We are looking at again making a final determination on the aircraft type, aircraft availability, operating cost, staff training, all of the associated cost and implementing a new aircraft type. But we have recognized that Caribbean Airlines, to be a successful enterprise, must move in that direction, and we would like to give this Committee and the wider public that we are moving towards that in the shortest possible time. Mind you, aircraft availability is not something that I say you go and you take off the supermarket shelf, and therefore, the fleet planning exercise will capture what is available out there for us to implement the best suitable type of aircraft. That is the— Mr. Mark: But as you are on that, you may want to share with us what is your targeted number that the management and the Board could be looking at in the short to medium-term period having regard to what you have just said. Mr. Mohammed: We are working with tight deadlines in terms of achieving the

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aircraft selection. What we also will be looking at is that interim period, what can we do with the existing interior of our aircraft until we get there; what is the associated cost; is it feasible or not? So a detailed analysis is being done to guide us with making the right decisions. In relation to page 12 of the KPMG report that is dated December 31st, yes? Mr. Mark: Yes. It is a dated report but you have to implement the recommendations. Mr. Mohammed: Correct. I will ask Adrian to address both pages 12 and 21 of the report. Mr. Mark: Thank you. Mr. Agarrat: Good morning, Chair and Committee, and to Member Mark. Regarding the bank reconciliation we did implement a number of the recommendations by the auditors. We, as the management team, saw a deficiency in how the bank reconciliations were being handled and one of the first recommendations I made was to have a separate team deal with that specifically because you are basically monitoring a number accounts, international accounts in several countries. We also decided to look at a policy where we would have all the stakeholder departments responsible for their adherence to making sure that things would process in a timely manner. I would say at the end of 2015 into 2016 we started seeing some of the benefits of that, and one of the things we noticed over monitoring some of the improvements that we needed a very strong supervisory control of that function. We recruited somebody who has done an excellent job. So we right now are within the policy mandate. No reconciliation items passed one month and we have a full and accountable review process at present. Related to the Airports Authority issue, with your approval I think I would like to pass that on to Capt. Jags who could give a response on that.

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Capt. Singh: Thank you, Adrian. If I may ask our Corporate Secretary/Legal Counsel to respond. Ms. Lalla: Good morning, Committee. There has been an ongoing dispute with the Airports Authority since the incorporation of Caribbean Airlines in terms of the rate to be charged for occupying the premises. Although I joined Caribbean Airlines long after its incorporation, the records show that there has been a back and forth on valuations and so with the rate, and I think as a result of that this is why lease has never actually been formalized. I do know quite recently our Properties Manager did obtain from the Commissioner of Valuations a valuation as to a recommended rate and we are in discussions with Airports Authority to come up with a compromise. The challenge is that while it may be a rate we can use going forward, Airports Authority is treating it as arrears that we owe. We do have a good relationship with Airports Authority, we are in dialogue with them and we are hoping to come to a point where we can deal with the arrears and move forward with a formal contract. Mr. Mark: Mr. Chairman, if I could just pose my final, final question? We would like to receive, or if at this time you would like to submit in a tight summary form, your recommendations as it relates to the future viability of that very important state entity called Caribbean Airlines Limited. We would like your good self, Chairman, to maybe provide to this Committee the perspectives of Caribbean Airlines’ Board and management as it relates to the future of this organization in terms of viability as I said, turn around, profitability; and maybe some recommendations that you would like this Committee to consider as we look towards providing guidance to the Parliament of the Republic of T&T on the future of Caribbean Airlines. So it is an area we would like you to consider and as I said, you can probably give us a tight appreciation now and then maybe you can submit a more comprehensive submission to the Chairman or through the Secretary

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so that we here would be able to have a better appreciation of, you know, the thinking of the management as it relates to the future of this very important state asset called Caribbean Airlines. 12.25 p.m. Mr. Chairman: Thank you very much. I think Sen. Mark, given the time constraints, we will formulize that request in writing, because I can say pretty safely now the view is that you will have to make a second appearance because there is a whole—I have in front of me a set of issues that we have not been able to cover and then from the public, we have pages upon pages of questions that we have not yet been able to delve into. But let me allow Sen. Henry and after that MP Leonce one final question each so that we can wrap up. Dr. Henry: I am still distressed by the revelation in terms of ATR that you cannot sue the company and you have to go through such drama to get any kind of recourse. But just for the public, we have not really discussed the overall profitability of the airline in the last two years so we can get an appreciation and the public would be informed as to the kind of challenge you have in turning the company around. So it could be just briefly summarized in terms of what has been the profit and loss 2015 and if you have the figures for 2016. No, I want it stated on the record. Mr. Quamina: Before the CFO answers that question, I just want to make it perfectly clear that there is no indication from here that we cannot—we are saying that there are some challenges. Yes, there are some challenges. Much obliged. Mr. Mohammed: Member, I would like to suggest that we not provide the financial information in the absence of audited accounts and that if we can provide those in writing to the Committee. One will appreciate that management accounts can defer to audited accounts and therefore, we will not want to give rise to speculation in terms of the accuracy of the numbers that we are providing. Dr. Henry: But the 2015 figures are not in yet or are not audited yet?

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Mr. Mohammed: Correct. Mr. Chairman: Thank you very much, but we will request the information you have so that will be part of our supplemental information requested. MP Leonce. Mr. Leonce: Thanks, Chair. In your submission, you indicated New York, Toronto and Tobago were your least profitable routes. Yeah? And just a while ago, you indicated that you were able to turn around New York which is good. That same strategy, is it being geared towards Toronto also? That is one. And the second one is the London route. I saw the challenges that you had with that route and the to and fro based on management, if to bring that route back or not. I understand it is not a profitable route. However, is there any consideration for future for any strategy to bring that route back in terms of the service that Caribbean Airlines provides to its customers? Mr. Mohammed: In relation to the London route, it is not envisioned in our strat plan that we will be flying across the Atlantic in the near future. That route requires very specific aircraft types that would not be able to be efficiently utilized in our network. In relation to the profitability of our routes, two of our routes, at this moment, are showing small losses. We believe that the strategy employed on the New York route that historically showed a negative, that we can deploy that or additional resources to turn around those two other routes that have shown very small negative numbers. Mr. Chairman: Okay. I have the pleasure of trying to bring this—but I have one quick— Mr. Mohammed: Chair, if I may make one comment, please. Mr. Chairman: Oh, forgive me. Mr. Mohammed: In relation to member Henry, what I would like to say is notwithstanding the accounts not being audited, I can say that 2016 numbers suggest

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that we have done significantly better than 2015. So having that in context and member Mark would have said—or I am not sure which member—the Minister of Finance suggested that by 2017, we should be able—we do believe that in 2017, we can do it but we have given ourselves a little bit of leeway in anticipation of some challenges that we foresee, but the airline is in the right direction to become a sustainable enterprise. Mr. Chairman: Thank you very much, Mr. Chairman. I have a quick question on an issue that I think you should be able to dispense with quickly. The US Department of Transportation had a requirement for airlines servicing in their airspace to provide regarding their website—making sure that their website is compliant regarding persons with disabilities. I am aware, according to the DOT document I have here, that the deadline was the middle of December last year for the website to be compliant to allow persons with disabilities to be able to use the website. I would like to just get confirmation that Caribbean Airlines met that deadline or if you did not meet that deadline, when are you going to meet it and if there are any penalties that you will be suffering under the Department of Transportation rules. Mr. Mohammed: Yes, I am happy to report that Caribbean Airlines have met the requirement. The initial requirement was last year and it was extended at two different points this year, the last being December 12th, and we are 100 per cent compliant with WCAG requirements as laid out by DOT. Mr. Chairman: Thank you very much. Okay, as the Chairman, I am going to begin to wind up this meeting and I want to share. I think that the Caribbean Airlines and its various previous iterations have had a long history in Trinidad and Tobago. I personally can recall my very first flight was on July 12, 1977 and young chap name Bobby Thomas was flying BW 424 Port of Spain to Barbados, Barbados to New York, and it was a tremendously pleasurable experience for me being a very, very young chap at that time. “Doh worry about the afro hair now.” [Laughter] And I

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have racked up a couple of 100,000 miles with Caribbean Airlines and its previous iterations before, in addition to the two point something million I have racked up with other airlines. So that the airline has had a long history in Trinidad and Tobago, whatever the actual designation. I think that every citizen of Trinidad and Tobago would like to see the airline do well, would like to see the airline be profitable, would like to see the airline deliver service that we can all be proud of. So I am happy to hear from the responses today that you are starting to move in the right direction and that you recognize that there are some challenges along the way that need to be fixed. I think we have pointed out—Sen. Mark and myself pointed some of the challenges. So that with that first part of my view, I think that Caribbean Airlines also presents the opportunity for Trinidad and Tobago to be an aviation leader in the region and we have not really capitalized on that opportunity because we have been dealing with too many fires within the organization itself. So that that is my preface to indicating to you that I would like to say that very likely your entity will be recalled to sit before this Committee again because we have a whole range of issues. In addition to profitability issues, a whole range of issues that we have not been able to touch because of the time constraints. We are all conscious of the executive time in the room here and we have a cut-off time regarding these meetings. So you will be recalled and you will be advised through the Secretary of when that next meeting will be. And always remember that the Committee here, our role is to help you. We want to understand your challenges and to see how we can work together along with your line Ministry to see how we can craft strategies to get you in a place where everybody is comfortable and everybody is loving the Caribbean Airlines experience. So with those few words, I would like to ask the Chairman to give us some brief closing remarks before I bring this session to a close.

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Mr. Mohammed: Chair, certainly Caribbean Airlines and the management team considers it a pleasure to be appearing this afternoon before this Committee. We remain committed and transparent to providing all of the answers that I believe were requested of us. We certainly will avail ourselves whenever this Committee so desire for us to reappear next. We would like to assure the country that Caribbean Airlines remains the national carrier. We remain a very safe carrier. We are committed to fulfilling our mandate that we have been charged with. The team at Caribbean Airlines will respond to the challenges that we face as an airline and by extension as a country. And therefore, we are eager, this is the people of this country, I believe they are also eager for us to make the necessary changes that are required for our existence. Mr. Chairman: Thank you very much, Mr. Chairman; thank you very much, Members. Acting Permanent Secretary from the Ministry of Finance and her colleague, I think it is Mr. Herbert, thank you very much for attending. I want to say a special thanks this morning from the Members of this Committee to the media and the viewing and listening audience. And I want to extend apologies to the viewing and listening audience because we have, I must say, quite a long list of questions from the viewing public that we have not been able to respond to in this session but I want to give the undertaking to the members of the viewing and listening public that the questions that have been processed through our system, through Facebook, through Twitter, through email, the Committee will make every effort to address and have those questions responded to properly at the next session that we meet with Caribbean Airlines. So thank you very much for everyone attending and we wish you Godspeed and again, from myself and from the Committee, wish everyone who is here in this room and who is listening and who is watching, we want to extend our best wishes to you for 2017 that brings us as a country into a better place than we started off, so

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thank you very much. 12.38 p.m.: Meeting adjourned.

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VERBATIM NOTES OF THE FOURTEENTH MEETING OF THE JOINT SELECT COMMITTEE ON STATE ENTERPRISES HELD IN THE ANR ROBINSON (WEST), LEVEL 9, (IN CAMERA), AND J. HAMILTON MAURICE ROOM (MEZZANINE FLOOR) (IN PUBLIC), OFFICE OF THE PARLIAMENT, TOWER D, THE PORT OF SPAIN INTERNATIONAL WATERFRONT CENTRE, #1A WRIGHTSON ROAD, PORT OF SPAIN, ON MONDAY, MARCH 13, 2017 AT 9.27 A.M. PRESENT Mr. David Small Chairman Dr. Lester Henry Vice-Chairman Mr. Fazal Karim Member Mr. Wade Mark Member Miss Allyson Baksh Member Brig. Gen. Ancil Antoine Member Mr. Adrian Leonce Member

Mr. Brian Caesar Secretary Miss Sheranne Samuel Assistant Secretary Miss Krystle Gittens Parliamentary Intern Miss Vahini Jainarine Legal Officer I ABSENT Mrs. Cherrie-Ann Crichlow-Cockburn Member [Excused]

Mr. Chairman: Good morning, everyone. I would like to reconvene this meeting and welcome everyone again to this public hearing of the Joint Select Committee on

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State Enterprises. The purpose of this meeting is to continue the examination of the operations of Caribbean Airlines Limited (CAL), with a specific focus on customer services and to explore what might be some of the possible solutions to challenges being faced by the company. The role of this Committee is firstly to examine the issues which arose, based on CAL’s written responses to the Committee’s questions, and secondly, to aid CAL in improving its operations, resulting in a more efficient and effective organization. This meeting is being broadcast live on Parliament’s Channel 11, Parliament Radio 105.5 FM and the Parliament's YouTube Channel ParlView. Viewers and listeners can participate by sending comments relating to today’s engagement via email to [email protected] or via our social media Facebook page at facebook.com\ttparliament, or on twitter@ttparliament. I would like to now welcome officials of Caribbean Airlines, officials of the Civil Aviation Authority. Thank you very much, and officials of the Ministry of Finance, who are here to join us in this session. I would like to begin now by introducing firstly myself and I would ask other members of this Committee to introduce themselves. My name is David Small. I am the Chairman of this Committee and I would like members of this Committee to introduce themselves beginning at my extreme left. [Members of the Committee introduce themselves] Mr. Chairman: Thank you very much. I would firstly like to now call on the officials of Caribbean Airlines to introduce themselves. [Members of Caribbean Airlines Limited introduce themselves] Mr. Chairman: Thank you very much. I would like to now call on officials of the Trinidad and Tobago Civil Aviation Authority to introduce themselves. [Introductions made] Mr. Chairman: I think I missed a couple of Caribbean Airlines people. Did I?

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Forgive the Chair. Would the remaining Caribbean Airlines persons who are hiding behind there please introduce themselves. [Introductions made] Mr. Chairman: I would also like to invite the officials of the Ministry of Finance who are present in the room to introduce themselves. [Introductions made] Mr. Chairman: Thank you very much. We are now going to get into the meat of this hearing. This is the second hearing with this Committee with Caribbean Airlines. For the benefit of the information of the public, I would like to inform the public that the Committee has already met with Caribbean Airlines this morning in a private hearing to deal with some issues, because we consider those issues to be issues that needed to be treated within a particular way, and I do this deliberately to make sure members are aware that issues are not always issues that we can all handle in the glare of the media. So, now that we have had an introduction, I am going to begin now by asking Caribbean Airlines a couple of very, very easy questions. They had some hard ones already. In your submission to us, in your second set of submissions, the Committee requested a copy of a document with reference by your chairman in the first hearing by a document prepared by Lufthansa Consulting. The Committee noted your response, which was, in the view of the Committee, a non-response. The Committee requested a copy or a report that was referenced by your chairman in the previous hearing. We would like to understand why this document was not submitted to the Committee. Mr. Quamina: The document, Mr. Chairman, is a document in respect to which contains information which is of concern to Caribbean Airlines from the point of view of its competitors and from the point of view of its business operations that we felt is a confidential document, in respect to which we have no difficulty making that

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available to the Committee. We realize it is entirely up to the Committee to determine its discretion, whether it wishes the document to remain confidential or not, and what we had indicated in our response, it did say, “to be addressed during the in camera session”. The fact about it is that the document, if the Committee wishes to have the document, if there was a manner in which the Committee could indicate, it could be supplied to the Committee under confidential head, in a confident letter. Because what has happened, those consultants in fact permitted themselves to, and were permitted to, access business decisions, strategies, et cetera, that from a purely competitive point of view, ought to remain confidential. There is nothing of concern in it other than that aspect. Mr. Chairman: Well, I want to share with you that the practice of this Committee has always been if any particular entity is appearing before the Committee and we requested documentation, the Committee expects full compliance with the request for documentation. If, in the view of the entity, there are matters there that are of commercial concern, or considered to be competitive information, you can request that any queries or questions that the Committee wishes to have on that particular matter, to ask to have those issues aired in camera and the Committee will duly consider that request. It is not up to the entity to choose to not submit the document. Once the Committee writes and requests the document, the Committee expects to receive the document. I am leaving it at. So that I would like to hear from you, when do you think you can supply that to the Committee? Mr. Quamina: Well, Mr. Chairman, we will write the Committee and express our concerns with respect to it, and the Committee can indicate their position, then we would respond accordingly. But there is no delay in terms of the ability to provide it, but we would prefer to outline our concerns to you in writing so that you—

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[Interruption] Mr. Chairman: And I have no problem with that Mr. Deputy Chairman. All we are trying to get at is when do you think the document would be supplied to the Committee? Mr. Quamina: Once the Committee hears our concerns, within 48 hours. Mr. Chairman: Thank you very much. I appreciate your very direct response to my very direct and straightforward question. I have one other short, easy question before I give the floor to other members who I think have harder questions than I. The Committee requested inside of the report here—yes, I found it. We requested a copy of the management tender process, the documents, the evaluation documents used for procuring the ATR aircraft. What was supplied was a heads of agreement regarding spares. The Committee requested the management tender process and evaluation documents. I want to be pellucidly clear. You should be familiar with this document. It is the State Enterprises Performance Monitoring Manual and at section 6, it details all the requirements regarding procurement. There is an interesting section right at the end of that, that deals with making sure you have records, which is actually, if you do not have records it is an offence under the—let me be correct—the Chairman does not want to be misquoted. I want to quote from section 15(2), procurement files: The relevant purchasing section shall be responsible for the maintenance and storage and procurement of files, in accordance with section 55 of the Proceeds of Crime Act. So that you must keep records of all procurement activities. I would think that purchasing an aircraft is not a daily or regular purchase, so that there must be some files regarding the procurement. What we have received from the organization does not reflect what our request was. Could you help us please? Mr. Quamina: I would ask Mr. Carrington to respond.

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Mr. Carrington: Chair and members, to get an aircraft for a particular mission, there are not very many manufacturers. In this case it was only two, Bombardier and ATR. So these were the two parties who were invited to make submissions and demonstrate their type and the fit for the purpose. So we invited ATR and Bombardier. That is how this process was handled. Mr. Chairman: And all we are saying, we are requesting the relevant documentation to support what you are saying. I am not doubting you in any way. The Committee simply requested the management tender process evaluation documents. So that all we want to see, just as you said, you invited Bombardier, you invited ATR, you would have gone through a process, the invitation to bid. There is a nice process detailed here. You would have done an evaluation. You would have made a recommendation to the board. It would have gone to wherever else it needs to go to for approval. We would like to see a copy of that documentation. When do you think you could supply that to this Committee? Mr. Quamina: Mr. Chairman, within seven days we would supply the relevant document, the response to that—a more particularized response to that question because I am not quite certain that Mr. Carrington has answered it as fully as it is required to be answered. So we would provide you with a more particularized response within seven days. Mr. Chairman: Mr. Vice-Chairman, I wanted to be pellucidly clear. I understand your response. What we would like, the Committee would like to see, is the documentation, and I want to be specific, regarding the procurement of the ATR aircraft, whatever documentation that you would have to show us that you were engaged in a process, you did, as Mr. Carrington indicated, you invited bids from ATR and Bombardier. I think those are the two manufacturers who could manage the requirements of CAL in this. You invited them. This is what they bid. This is what they said. This is your company’s evaluation of the process and you made a

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recommendation to your board. We would just like to understand what transpired and that is all. Thank you very much. Mr. Quamina: Chair, just for clarification purposes. You referred us to 16, which I understood to be documents used for May, just spares purchases for the ATR, is that what you referred to? Mr. Chairman: Regarding the question that I asked? Mr. Quamina: Yes, please, so that I can be clear. Mr. Chairman: No, inside of this document? Mr. Quamina: No, no, no. I am very familiar what that document. Mr. Chairman: Good. I am so happy to hear that. I have a few questions on this. Mr. Quamina: Yes, the reference 16? Mr. Chairman: No, no. It is 14. In your second set. Mr. Quamina: I see. Much obliged. Mr. Chairman: You found it. You are clear now? Mr. Quamina: I am clear. Mr. Chairman: Thank you so much. Sen. Baksh. Miss Baksh: Good morning, once again. In your submission, you have indicated that the company embarked upon a rebranding strategy, a rebranding exercise, actually. What areas of the company’s operations are the focus of the exercise? Ms. Guy: The company’s rebranding strategy has a number of facets. It, of course, involves first and foremost the product that we have and that product is being defined. It involves a lot of discussions in engaging corporate communications, marketing, advertising and the look and feel of the product is taking shape. That is one aspect of it. The other aspect is that which has to do with employees and how they view the organization and that really is the culture change. We want the employees to view the organization in a particular way and we have defined that. We have come

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up with a brand which says: “We are the Caribbean. We care. We connect. We create.” And the brand is being built around that theme. So, in a nutshell that is it: the look and feel of the product itself and how we relate with our customers and how we relate with our employees and as a result how they relate with customers. So inside of all of that you would find things like training and retraining and engagement studies and ensuring that the relationships that we build with all our stakeholders reflect that brand. Miss Baksh: Great. May I ask what is the cost of the programme—US $2 million, TT $14 million? Ms. Guy: There would be different elements to it and we will have to get the cost of, for example, the advertising which I cannot speak to. There would be the marketing aspect. I can speak to the training. We have embarked on a customer service initiative, and we sent out RFPs and we are presently evaluating those RFPs and we expect that to be in the vicinity of about TT $2 million to TT $3 million and there are also other culture things that we are doing in the organization. We do have a budget for that of about $1million. Thus far, we have spent about $300,000 to $400,000 on that. But there would be other things like advertising and marketing, which I personally cannot speak to. Miss Baksh: I know you spoke of some of the benefits, but are there any quantifiable financial benefits? Ms. Guy: The theory and the thinking is that if you have employees in the organization who believe in the brand and who can demonstrate the brand, that must, of course, redound to how our customers see us and what they think of us, the memories that we create for them—which is part of the brand—and, of course, that is going to ensure loyalty and lead to financial gains. If employees do not make that connection with us then we believe that there would be a gap and the literature tells you that there would be a gap and our

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experience tells us that there would be a gap. So, engaging employees internally and then having them demonstrate the way we want them to see the organization and demonstrate that to our customers, we believe that that is going to redound to some financial benefit. Of course, it allows us to achieve the goals that we have set ourselves. There is a higher probability of us achieving those goals. Miss Baksh: All right. In your submission you have also indicated, and I quote: Management is in the course of reviewing and updating the 2016 to 2018 strategic plan to produce a strategic plan for 2017 to 2019. May we have a response by Monday, March 20, 2017? Mr. Quamina: Pardon me, a response to? Miss Baksh: The strategic plan for 2017 to 2019. Mr. Quamina: Okay. I am afraid that is too short a period, Ma'am. Mr. Chairman: The Committee will do a request to facilitate the question. Chairman, you would indicate when you can supply it to us. Mr. Quamina: Much obliged. Mr. Chairman: I would just like to follow up quickly on the Senator’s question regarding the marketing programme, the rebranding programme. Is there anybody who could give us an estimate of what the entire programme—I do not expect that a company will start a programme without some estimate of what the programme is going to cost? Does anyone have a number they could provide us? Ms. Ligoure: Chairman, as the Vice-President of Human Resources indicated, the rebranding process is divided into several areas, and one specific area, with respect to what would be the cosmetic aspect of it and the marketing support, we do have an account assigned to the tune of TT $1million that has been—the drawdown on the TT $1million has been quite limited. We are very mindful of our limited resources, and so far the spend has not exceeded TT $70,000. It has not exceeded that. We are currently about to roll out another aspect of the rebrand and that has

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to do with representations of the vision, mission and other visuals to support what was a very rigorous process last year. Last year, we would have looked at internal processes. We are looking at the customer service elements, and to speak to the member’s former question regarding quantifiable benefits, we have been monitoring closely the reduction in cost, with respect to output regarding claims and other areas which we have related to improvements in the processes, with respect to baggage and other areas. We are well below the industry standard for the KPIs regarding customer service and we are happy to report that to the Committee. Mr. Chairman: Interesting. Is the company—I recognized at the last session, I recall, when I asked a question regarding the website and there was some work going on and I was just trying to skim through the Hansard to find out the response of the Chairman. I know some work was done and you had engaged, I think, a New York-based company to do some work for you. Could you tell us some more about that? Mr. Quamina: I would ask Mr. Quong Sing to respond. Mr. Quong Sing: Through the Vice-Chair, Chairman and committee members, yes we have finished what we would call the phase one prospect of the website we designed and that was purely cosmetic, in terms of the view of it. It was a firm called MBLM who have completed the first phase. Like many other technical aspects of stuff, it is an ongoing process, in terms of various different aspects of the website being added to Caribbean Airlines and with that, various different front-end designs will be added as we go along to ensure that we have the visual and the best customer experience that we can have, in terms of simplicity and ease of access. Mr. Chairman: Was that company MBLM? Mr. Quong Sing: Yes, it was. Mr. Chairman: And what was the cost of that contract?

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Mr. Quong Sing: That contract for the entire phase was—[Interruption] Mr. Chairman: The entire engagement, yes. Mr. Quong Sing: The entire engagement would be somewhere in the vicinity of about US $200,000 of which about 35 to 38 per cent was being able to be paid in Venezuela bolivars, for which part of that we were not able to take out of the country of Venezuela, because they do have an office in Venezuela. So we able of access some of our funds that are trapped in Venezuela to pay part of that contract. Mr. Chairman: Well, I would like to request on behalf of the Committee a report on this entire rebranding exercise—what are the objectives, what is the estimated costing, and the Secretariat would be in touch with you in writing regarding that. Member Karim, you have the floor. Mr. Karim: Thank you very much, Mr. Chairman. Mr. Vice-Chairman, through you, I have a number of questions. Let me start with the first one. With respect to what was just indicated by the VP, HR, that one of the strategic intents of any organization really is for employees to connect with the management, can you indicate to us whether, in the recent past, there has been any conduct of any employee motivation survey or feedback, and when was that survey conducted? And can you give us some highlights, very brief, of that, the results of that survey? In other words, how did the employees see management, and what was the level of motivation and morale? Subsequent to that, I will then ask my other questions. 10.50 a.m. Ms. Guy: An employee engagement survey was conducted in February 2016, and that was an initiative coming out of the whole rebranding exercise, because we wanted to know if we are saying we are a particular type of organization with a particular product, then how do our employees see us and what is the possibility that they would move with us in this direction. So we did a survey conducted by a local firm and the overall—what is called a culture index—meaning the percentage of

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positive responses that we got, and overall our culture index was 34 per cent, which means that only 34 per cent of the employees in the organization felt that CAL was moving in the right direction and had a high probability of achieving its goals. So we knew that there were issues. We knew that we had to take steps to engage employees and to do certain things in the organization to change that perception. Within that overall culture index you would find things like: how do employees feel about management practices? How do they feel about the way we organize work? How do they feel about our strategic direction and strategy and so on? Most of the responses were lower that what would be considered an appropriate benchmark. So, for example, if you look at when surveys of this nature are done in other organizations, you would find something like a 65 per cent positive culture index is desirable. So we knew that we had a lot of work to do and we presented that to the board—to the executive management and to the board—and the board quickly sanctioned some initiatives and we began work on those initiatives and we continue to work on those initiatives even up to today. Just to sum it up, we identified that we needed to have employees understand where the organization is going, get from them the issues that they are concerned about. To do that we set up what is called a change management team and that team came from recommendations by the employees themselves. So we have a team of 25 people and they are the ones who are spearheading the change, identifying the issues in the culture survey and spearheading the change in the organization. Mr. Karim: Okay. I want to make it very clear that my questions are all aimed at obtaining responses for the improvement of the airline and, therefore, from what you would have said there is a situation for concern that 67 per cent or 63 per cent—over 60 per cent of the people do not have the faith and the confidence in a sense that the existing management can take the airline to a sense of profitability. Am I correct to conclude that?

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Ms. Guy: Yes, that would have been part of the survey. Mr. Karim: And I am sure that the corrective action would have started with the change management. Ms. Guy: That is right. We had a number of recommendations and many of those recommendations are in train or we plan to put them in place. Mr. Karim: Right. Thank you very much. With respect to airline operations, I frequently fly on the national airline, and I wanted to ask this question—I have the opportunity now because I may not have been able to get the answer before—in terms of the profitability of the airline and in terms of the competition which the airline faces, currently operating out of Port of Spain: what would be the cost, for example, of a meal in an Economy Class, say you are going to Miami or to JFK? I know you would get a different type of meal maybe if you are leaving POS—you are leaving JFK or MIA. But I just want to get a sense of the cost, because cost is going to be important in terms of the viability. If I may ask—maybe it might look “kinda small”—and no pun intended on the Chairman’s name—but if I can ask a small question, maybe it might have an impact. Apart from the cost of the meal what would be, for example—and the entire plane may use a bag of ice—what does it cost for a bag of ice, for example, that you would purchase to be placed on the aircraft? So if you could give me a sense as to that. The other thing I want to ask, maybe I should allude to the question now too. I would have been seeing—and since the Vice-Chairman raised the issues of numbering with respect to No. 27, it gives us there, CAL’s subsidy per year that was paid. Of the figures that were given and the response, I would like to know what is still outstanding owed by the Tobago House of Assembly in terms of the subsidy to CAL. How much was owed from the time of the subsidy? How much has been paid? And what is the amount outstanding? Thirdly, with respect to—it is also an HR issue, but also an operational issue.

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Substantial amount of moneys would have been paid to train pilots. I am talking here in the main for the ATR and to a lesser extent the 737. When you expend moneys on training, normally there is a contractual agreement that if you default, if you were to leave the airline, you would have to repay a certain amount of money or pay back whatever it is. Can you tell us how much money was expended? If you can give me a period of time say for the last three years, how much money was spent on training of pilots and for those who would have exited the company, how much did you recover out of that? The other question I wanted to ask—so that as I indicated that you get sufficient notice—when we last met here the Chairman who is unavailable today, indicated that you were in the process of rationalizing your fleet in terms of the Boeing 737 800 to the Max—that was an option—or to the Airbus Neo. The question I want to ask is: what did the consultants from Lufthansa recommend? First one. And, secondly, have you agreed on the rationalization of your fleet and, if so, which did you select? Ms. Chase: Good morning members and Chairman. With respect to the question on the THA, I can confirm that out of the $1,380,988, all that amount has been paid. So to date nothing is outstanding by the THA. Mr. Karim: There are other questions I had asked. Mr. Quamina: Member Karim, in relation to your question as to the cost of the meals and the bag of ice, et cetera, we would have to do some research in relation to that, but I would indicate though that it might give you some comfort from the point of view that when we came on to the board, the management, not by our instigation by any stretch of the imagination, but one of the first notes was an analysis that was done of the cost associated with the service of hot meals on certain routes. In actual fact, a survey was done to see whether the passengers what they preferred—whether a sandwich would be sufficient versus a hot meal on certain

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routes—and the survey actually came back quite positive that passengers were fine with a sandwich on these particular routes and we implemented that decision. That, in fact, would have a cost savings, if I recollect correctly, close to US $1 million to the airline. So a constant analysis is going on as to the provision of meals and the cost associated with that in order to determine how best to provide a quality service while making a savings, but we would certainly get back to you. Mr. Karim: Because I was thinking not only about the item itself, but the cost of procuring that item. Mr. Quamina: Certainly. I was actually quite surprised to see the results of the survey suggesting that the passengers would be quite happy with that. So we have, in fact, encouraged more surveys of that nature to take place so that we could meet the customer satisfaction while, in fact, reducing cost. Mr. Chairman: Mr. Quamina, thank you. I want to interject. I think that your response is interesting from more than one perspective. I think that the first question that was asked of the Caribbean Airlines Chairman in the previous hearing was: how do you view the airline? Where would you place Caribbean Airlines? So the question asked by MP Karim is so important, because if you see yourself as a low- cost carrier—I think the response was that you are a hybrid and there are numerous examples of hybrid airlines. The majority of hybrid airlines do not serve meals, any kind of meals. So that the question that I am asking is all linked coming back to the issue of the strategic plan. How does the airline seek to position itself going forward? You have a historical package of things that you have been offering all along. I suppose a lot of your passengers are returned passengers and, perhaps, they are expecting them, but you are running a business and trying to get yourself away from the public purse. So I think that is part of the strategic discussion that has to go on at the airline. What type of airline segment are we targeting? What type of services are we willing

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to adjust our service package to, to be able to meet our profitability targets? I am not expecting a response. I think that that is part of the discussion that has to take place at the management. So the cost of the meals are interesting, but if you really are a hard-core hybrid airline, the cost of meals is something that pays for itself because people purchase the meals, and you only really have cold snacks and that is where this Committee, your input on something like that would help us to help you. But I want to move on. I just want to take one quick question to Ms. Guy. Ms. Guy, the results of your survey are shocking. The survey is shocking. It points to probably almost two- thirds of the staff in some level dissatisfied with the way the company is being run. That is shocking. I think that should have spurred the management to find out more. My obvious question is: is there an issue with the salaries being paid to the workers? Because I would not divulge the exact numbers provided to the Committee, but the wonderful team here at the Parliament has been able to provide us with some comparable information. We got it from the United States Department of Transportation for every airline in the USA from the smallest to the biggest. All I am willing to say is that certainly the pilots, the average salary for the pilots is well within the range of even some of the larger airlines, and Caribbean Airlines is a tiny airline, 12 planes—15 planes I think in total—but the disparity is the front-level staff, the Flight Attendants, in particular, they are a fraction of what obtains at— when I say comparable, I am talking about Virgin America, Frontier, JetBlue. It is a fraction, not to mention some of the other areas. I would never be the one to say that, you know, given the economic constraints that we face now that we should raise salaries, but a lot of the dissatisfaction could be linked to the fact that aside from the pilots, the pilots are the only ones that seem to be in the comparable range probably, in fact, above. If you go to some of the other regional airlines in North America, you could say that the Caribbean Airlines

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pilots earn way above that when you go to the regional airlines who operate regional jets. So that my question is, in your analysis, did the issue of salaries, compensation, was that an element of the survey? Of the responses, how did that impact the survey? Ms. Guy: It was not a question directly to say are you satisfied with your salary and so on. It was not a direct question, Chairman, but you know the way the surveys are designed is that you ask questions in order to glean that kind of information. So you ask, if you were offered another job with a higher salary would you leave, and you look at that answer to determine how people feel about salaries. But survey or not, I do accept that the salary levels in CAL are not at the market level. We are challenged as an organization. Yes we are. The ranges have been in place since 2010 except for pilots. Pilots renegotiated their contracts in 2014 and those salaries are in place. We have a collective agreement with them. It goes up to 2018, but we are challenged with the other categories. We have not changed our pay grades since 2010, but we have implemented a robust performance management and evaluation system, which allows employees since 2015 to get a merit increase based on performance, and that was the first increase that the staff, other than pilots, got since 2010, but it is still within the existing range which is below market. Mr. Chairman: I would like to suggest to you, Ms. Guy and to the CEO and to the Acting Vice-Chairman, that the issue of you having challenges with the staff understanding where the company is going, how the company is being run and then you have effectively your frontline staff, the staff who the members of the public interact with being paid severely below the market, I want to suggest to you that that may be part of the problem, that the people who are at the front, the face of the company—when you go to the airport or you go to the office, the people who the average member of the public runs into—the management numbers are in line. The other concern to me, when I compare with other comparable airlines—and I would

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direct anyone to the United States Department of Transportation website, they break down the salaries and the list for every airline that operates in the USA and there are details on what they pay pilots, co-pilots, flight attendants, mechanics. The other concern for me would be the numbers for the aircraft maintenance crew in Caribbean Airlines is also significantly below what I would consider the market. For me, the market is an airline Spirit Airlines or Allegiant. While those airlines are small airlines they are large compared to us, because Allegiant is about 70 planes. Caribbean Airlines is a small airline. So I think that some work needs to be done—some deeper analysis about understanding perhaps that the issue of the frontline staff, the staff who interact with citizens or the traveling public—the flight attendants, your cabin crew, the rest of your service staff at the airport, perhaps there may be some rationale for looking at trying to revise those numbers. But I have— and I know member Karim has requested to make sure you respond to his questions—one question I want to ask. On the basis of this analysis, it suggests to me that significant portions of Caribbean Airlines employees are being paid below market. I do not want to say underpaid, but they are being paid below the market. That is what it suggests. The question, the obvious issue that arises is if you are paying below market, you are still losing money. I would have thought that savings on salaries and wages would have translated to the bottom line and somehow, somewhere or the other, the company is still losing money. When I looked at your numbers in one of your documents, your company indicated that one of the highest problems in the company is something called overheads and non-operating costs which is 14 per cent of revenue. Overheads and non-operating costs seem to be something that you need to look at. I would like whoever is in charge of finance to help us to understand what is overheads and non-operating costs to the point that it is 14 per cent of your revenue. If you compare that with salaries and wages for all of your employees, is 17 per cent

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of your revenue. So that somewhere along the line that line item in your budget in the numbers that we have been provided, that number seems very large. Could someone give us a response to help us what comprises this number and why is this number so high in relation to the revenue? Ms. Chase: Mr. Chairman, the overheads comprise of your salaries basically and your administration costs—your salaries in general. Okay. Also your non-operating costs would include your interest on your loans, because as you would know we have loans, your forex exchange and inside there we would also have some cost that we incurred for the returning of the 767. Mr. Chairman: I will not challenge you on that on air, because the way you had broken it down in your document is different from that, but I would leave that for now. I would detail what I want answered in writing. MP Karim, I think you needed to get a response from Ms. Guy regarding the question you had on training. Ms. Guy: Can you remind me which one was that please? Mr. Karim: What I had indicated was that there is clear evidence that 67 per cent of the employees surveyed did not show the confidence in the management to move the airline forward and I think you answered saying that you were in to a culture change management approach. But since the Chairman asked me to focus on another HR matter, I had really asked two additional questions, one is with respect to the fleet rationalization and there was another one that I had asked for— Hon. Members: Pilots. Mr. Karim: Pilots. Whether in terms of the moneys expended to train the pilots, those who would have gone on to “greener pastures” what percentage of the moneys they have not paid and therefore what liability we still have from those who would have gone to other places. Capt. Singh: Chairman, we recover the cost of training for pilots over a 24-month period. The pilots have within their contracts to serve the 24 months to recover the

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cost or make up the payment if they desire to leave. There have been pilots who left before the 24-month period and we recovered the cost of that training from those pilots. Most of the pilots who leave, leave after the 24-month period. Mr. Karim: The other question was with the fleet rationalization decision. Based on the Chairman’s indication at the last meeting, I was asking whether Lufthansa, the report had indicated where you should be pointing to in terms of your fleet rationalization and whether a decision has been made and whether you are going with the Boeing Max or whether you are going with the ATR airbus. Mr. Quamina: The Lufthansa report made recommendations with respect to the fleet rationalization based to some extent on the price, the energy prices at the particular time. They have since sent a supplemental response where they have indicated at present the fleet is adequate in terms of returning the airline to a profit. But insofar as our fleet rationalization exercise is concerned that is not yet complete insofar as a decision as to where we are going with the jets or with the regional aircraft as well. We are still looking at that. We have two consultants who are looking at it—local consultants who are looking at conducting the exercise and who would make recommendations we expect no later than by the end of this year insofar as that aspect is concerned. Mr. Chairman: Thank you very much. Brig. Antoine. Brig. Antoine: Good morning. I have an ageing mother-in-law who lives in Tobago—she is in her 80s—and most of the time attempts to travel to Tobago, even though you have confirmed bookings, my family members are unable to get the day they want to travel. So they have a policy of going on standby—and going on standby sometimes the day that you have to travel may be late at night or the following day—customers tend to spend from as much as six to eight hours waiting to get on a flight standby. We have a period approaching us: Easter vacation, there will be Jazz Festival

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in Tobago coming up and there will be the Heritage Festival. My question is: what contingency plan does the airline have to deal with excess capacity of citizens who need to travel to Tobago? We have use of the electronic media, there is social media to keep customers informed of the situation, but I think it is difficult for a citizen to really spend eight hours just to get to Tobago even though they may have a confirmed booking the following day or they may have a confirmed booking in the evening to get on standby without any kind of information to the traveling public that look, in six hours or in four hours we would put on an additional flight to get you to your destination. What contingency plan does the Caribbean Airlines have to deal with customers who need to get to Tobago sometimes for an emergency? Mr. Quamina: Member, I would ask Mr. Quong Sing to respond to you. Mr. Quong Sing: Through the Vice-Chair, Chairman of the Committee, member of the Committee, Caribbean Airlines has been tracking the air bridge demands for quite sometimes, and we have developed a heat map and we work very closely with our stakeholders to identify areas of peak demand and where they may be a little bit weaker. Specifically to Easter and Jazz, we would have identified dense areas and we would add capacity within the constraints that we have how best we can. Operationally as well, on the day, we do look at flights where we have excess demand and try to put on additional services as quickly as we can. We have identified that there has been some challenges in terms of communication, and we have made significant efforts with the frontline staff to ensure that we are able to notify the public as to what is going on, on an ongoing basis, on the day of operation. Brig. Antoine: Do you have plans to use social media? Do you have plans to use the electronic media so that people do not have to go to the airport but they can travel at a later time as the case might be? What plans do you have to deal with the public in terms of customer service, in dealing with their customers who need to go between Trinidad and Tobago on a regular basis?

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Mr. Quong Sing: We are working towards, as I say, all the different avenues of communication and as you rightly say, much of it is done on doing pre-emptive—if you want to call it that—services in terms of what we have to offer. Standbys, as you would appreciate, tend to build very quickly. So in terms of being able to facilitate across the network in terms of social media prior to actually a build-up is very difficult. But we are looking at avenues: how do we communicate among our frontline teams as quickly as possible to see how we can in fact move that across the various social media and operationally how quickly we can in fact put in place aircraft and crew. As you would appreciate, it is a challenge in terms of it takes a certain amount of time to be able to effect an aircraft availability. Easter is a peak across all the different regions and we intend to optimize all of our equipment. It is not that we just have aircraft sitting. So it is where we have gaps and then where we are able to facilitate through crew operations to be able to facilitate. Mr. Chairman: Can I ask a follow up on the Brigadier’s question? I have seen in the data that you have provided that the number of passengers ferried between Trinidad and Tobago by Caribbean Airlines is increasing every year. I think last year it got close to a million, a little over a million from 900,000-something like that. I have listened to your response, but there seems to be a continuous excess of demand above supply. So, there must be some strategy that the company is recognizing that perhaps you need to increase the available supply, not only at the peak periods, but generally. Because I did an exercise over the weekend trying to book a flight over the Great Race weekend from today to now you cannot get a seat. We are in March. I just went online, I did not call and you cannot get a seat. So that I understand that you have limited equipment, but I am thinking, looking at the data that you have showing the increases in the number of passengers being ferried across, there should be some plan in mind to say, listen, we need to probably get another aircraft, get a larger aircraft.

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I want to understand what your thinking is because this is a perennial problem with the airline—getting to Tobago when you want to go to Tobago and even worse, leaving Tobago when you want to leave Tobago. Even Members of Parliament here, those who have to come from Tobago always complain about the struggles waiting hours upon hours waiting to get a flight and you are not getting the flight. So I want to understand what the plan is having the data you have. You have the data, you presented it here showing the increase. Every year it is 100,000 or 150,000 more. It is clear that the current configuration, or the current set of aircraft cannot accommodate that load going forward. What is the plan? Mr. Quamina: Mr. Chairman, my understanding is that the equipment is not necessarily the issue. The issue really is the question of the bookings, the booking system which is in place which is allowing people to book flights, do not turn up, turn up whenever they wish, to get into the standby. I think that my understanding is that it is not an equipment issue, it is a booking issue. Now, insofar as dealing with that is concerned, I met at Caribbean Airlines a very advanced booking system that has recently been put in place, and that booking system seems to have the capacity to resolve this issue but it has not been implemented to its full extent. We are looking at that very closely in order to implement that to prevent the abuse in terms of the booking. I think that is a major issue. As well as on the last occasion we spoke to the question of the change fees, et cetera, and at the board level, Mr. Chairman, certainly appreciate that there is that problem but we feel quite strongly that it has to do not with an equipment issue but with the booking system that is in place and the abuses that it permits and we are looking at that very closely to bring an end to that. Mr. Chairman: Well, Mr. Chairman, I thank you for your response but that does not necessarily give immediate comfort to persons trying to fly to Tobago. If you are aware of this issue, I am sure that this booking issue did not arise last week. I

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suspect that this issue that you have indicated to the Committee, a booking system issue where people are holding bookings and then randomly turning up or not turning up is something that is affecting your ability to provide a reliable service to passengers. So I would have thought that you would have at least raised that issue to the board level or taken it to your line Ministry. I recall at the last session we did enquire of the line Ministry regarding that. I think I was advised by the Chairman at the last meeting that there was certain proposals made to the line Ministry regarding how to treat with some of those issues, because it is affecting your ability just as the good Brigadier has indicated. That you want to go to Tobago, you purchase a ticket and you expect to get on a flight. The problem I have as a citizen of Trinidad and Tobago, I sat yesterday afternoon, I could have booked a flight to go to Toronto, New York—wherever on your route—I could have booked a flight to fly this morning to New York or this afternoon to Toronto, no problem. Trying to book a flight in August to go to Tobago is a problem. So that that booking issue really needs something to be done urgently and addressed urgently. 11.20 a.m. Mr. Chairman: I will now ask Mr. Mark to take the floor. Mr. Mark: Thank you very much, Mr. Chairman. You know, Mr. Chairman, it has been said that where workers are unionized and organized they enjoy a higher standard of living and a better quality of life. I want to ask the Chairman, through him, whether Mr. Quamina could tell us, are the workers—forget the pilots, they have their organization; they are unionized as far as I am aware or they have some kind of union representation—but the bulk of your working people in Caribbean Airlines, are they unionized? Mr. Quamina: No. Mr. Mark: I think, Mr. Chairman, there lies the problem in terms of the very

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negative reaction that you have received—Ms.Guy would have received in terms of her survey—because as the Chairman said, when he looked at the salary scale of your employees, it does leave a lot to be desired. So that is an area that I guess they would have to deal with themselves. I wanted to ask, Mr. Chairman, whether the company has embarked on a customer/passenger engagement survey, as you have embarked on an employee engagement survey, to get a feel from your customers how they are viewing your service and the quality of the service that they have been receiving from Caribbean Airlines. Is there such a survey as you seek to brand CAL? Ms. Ligoure: Mr. Mark, to your question, there are a number of surveys that we have undertaken regarding the customer service experience, because at various times, for example, we would be looking at different things. So there was, for instance, a survey undertaken on the domestic air bridge to get a sense of how persons felt, what they needed, their preferred times of travel and a number of other bits of information that we had. The marketing department consistently and periodically undertakes surveys to engage our customers in different areas to find out where and how we can improve our service offering, and I am happy to say to the Committee—I will preface this by saying—while there is always room for improvement, we have been using information coming out of the surveys to add and enhance the overall passenger experience and the overall customer service experience. I will give an example that may appear simple, but it was based on feedback from the customers. After Carnival there is usually a mass exodus of persons with backpacks and headpieces and so on, and the simple implementation of providing a courtesy carry bag for head pieces was very, very well received by the customers. We also at the July/August peak of last year introduced a concierge service at Piarco International, and this was to improve the movement of the lines, to get

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persons who may be running late for flights moved through the system quickly. And these are some small examples with high impact. Again, I say there is room for improvement, but to your question, yes we do undertake surveys in an effort to continuously improve what we provide to the customers. Mr. Mark: I know that Caribbean Airlines—was it sometime last year?— introduced a system like I think American Airlines, where in the past when one travelled on Caribbean Airlines I think they were entitled to two pieces. Even if you go economy, I think you were entitled to two pieces, but I think that you have changed that. I think that you said it is now one, and if you want to go with another one you pay. Then I was surprised to learn recently that your competitor, Copa, a lot of your customers have switched because Copa has maintained two pieces, Mr. Chairman, at economy level. So that is why I was asking the question through the Chair, whether you have conducted a passenger engagement survey to determine how your customers, how passengers are responding to your service. If you could give us a percentage as how Ms.Guy did in terms of employees and how they are seeing the management and the future of the company. They do not see much hope under the management of the organization; 60 per cent totally dissatisfied. So I wanted to find out from you, Mr.Quamina, whether a similar survey would have been conducted as it relates to your passenger engagement, your customer engagement, and a percentage in terms of customer satisfaction. Ms. Ligoure: To the question, Mr. Mark, well there are a number of surveys as I mentioned previously, but if you would be so kind as to indulge us I would have to get that information, because I prefer to put accurate information into the public domain as opposed to trying to recall. Mr. Mark: Yes, that is fine. I wanted to ask, Mr. Chairman, on this question of subsidy, I see where—I do

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not know if I am seeing right, but you have to correct me—could you tell us again what is the total subsidy paid by the Tobago House of Assembly to CAL on an annual basis in order to facilitate passengers out of Tobago to New York and other destination points, or is it just New York? Could you tell us if this figure I am seeing here, that you have received, is it US $796,067 from the THA, and a further US $590,000? What is the total subsidy that the THA pays to CAL on an annual basis? Is it over US $1 million? Ms. Chase: It is $1.3 million. Mr. Mark: Million US? Ms. Chase: Yes. Mr. Mark: Could you further tell us how many passengers benefit from this subsidy, and could you tell us how this subsidy works? I am not too clear on how this subsidy works. What is this subsidy for? Could you explain to this Committee how this works and why is the THA spending US $1.3 million, taxpayers’ dollars to subsidize CAL? Explain to us. Mr. Quamina: Mr. Chairman, before I ask Mr.Quong Sing to respond in particular, there is an appendix 7 at page 18 which has an extract from the memorandum, so you would see that is the formula as to how it works. I will ask Mr.Quong Sing— Mr. Mark: I am not dealing with the formula between TrinidadandTobago. I know that the Government of TrinidadandTobago over the last 50 years, 40 years, they have been underwriting passengers travelling to Tobago, to and from Tobago. Mr. Quamina: This is Tobago to JFK, appendix 7. Anyway, I would let Mr. Quong Sing—but what it says is that: The THA shall guarantee and pay to Caribbean Airlines the difference between the cost of its UZ scheduled flight from Port of Spain to JFK and the additional cost of the flight from Tobago to JFK. The difference is estimated at US $8,207 per rotation or US $4,103.50 per flight one way.

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So that is how it is calculated. I will let Mr. Quong Sing take it from there. Mr. Quong Sing: Through the Vice-Chair, Chairman and members of the Committee, just to correct one item here. It is not US $1.3 million per year. That has been actually 1.3 over a period of 2011 to 2016 total. On average it runs anywhere from $120,000 to just over $300,000 a year on the route. It was an MOU that was enter into late 2010 to 2016 to facilitate a drive to have the northeast USA traffic into Tobago on leisure on a nonstop basis. I am not sure if that answers your question. Mr. Mark: I wanted to find out how many passengers would benefit from this subsidy on an annual basis. If you say the average is about $300,000 and it is to facilitate the tourism drive, what numbers are involved? You should be able to indicate to us what the numbers are over a yearly period. Mr. Quong Sing: If I may say, the subsidy is not per se to the passenger, because in part of the agreement talks to if we board more than 70 passengers on the flight to Tobago, we waive the subsidy. So it is not per se a subsidy to the passenger, but more to mitigate some of the risks to the organization. But on average we fly a load factor of around 65 per cent on that flight, or about 60 people between Tobago and New York on that leg. The challenge with the flight is that we still have some originating traffic which comes out of North America, which is somewhere between 35 to 37 people boarding out of the US gateway of New York into Tobago on an average per flight. Mr. Mark: May I ask a final question, Mr. Chairman. Could you share with us Mr. Quamina or the Acting CEO, what are some of the current challenges affecting Caribbean Airlines’ profitability? What would you describe and outline as some of your major challenges, and how can this Committee assist to improve your viability and profitability as an airline? Mr. Quamina: I think, Mr. Chairman, if I were to identify, within the last month

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or so it became quite apparent to me that our load on the routes that we have is quite impressive. We do carry a fair amount of load going back and forth on our routes. What it really needs is a rationalization of the costs associated with that. I do not think that the airline has as yet narrowed in on an ability to properly allocate cost per route and that is in fact—I think that once we get that in hand, I think that it will return to profitability. The airline is on line to return to profitability I think within the next 12 to 24 months. But the fact about it is that I think a proper cost allocation exercise is what is required in the airline; that is one. I think also to answer the question about the salaries, et cetera, we are also on the brink of doing a proper manpower analysis which would determine the proper allocation of staff that is required in order to operate the airline. As the Chairman said, if we are going on this hybrid, do we have the requisite number of staff required in order to operate an airline of that nature. With those two aspects, I am quite confident that the airline can return to at least being self-sustainable. Mr. Mark: What I was trying to get from you Mr.Quamina is that apart from the cost factor that you have outlined, to get Caribbean Airlines back into a zone of profitability, what factors, what areas do you consider to be very fundamental for the realization of that goal and how can this Committee assist you to realize that objective? I am trying to determine from your response whether this Committee can be of any assistance to the Caribbean Airlines as a state entity, to make it and to create that level of viability and profitability within the shortest possible time, and to ensure sustainability of that profitability, and therefore what is our role? What recommendations would you want to advance to the Chairman and to this Committee as it relates to providing assistance to Caribbean Airlines to for it to become, not only profitable, but there must be sustainability in that profitability over the medium and long-term.

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Mr. Quamina: I heard you, Mr. Mark, and I will maintain that it is a question of a very careful analysis of the cost that the airline is currently undertaking in relation to running those routes, and a rationalization of those costs, would certainly propel us in the direction in which you wish. I am not quite certain with the information that the Committee might have, it could make the recommendations, but certainly that is the area that has to be focused on. Mr. Chairman: Thank you very much, Mr. Vice-Chairman, and that is actually some of the information that the Committee has requested which was not supplied also, but I will deal with that also. Dr. Henry: Morning everyone. I want to start with something that has bothered me since the last occasion. I asked the question on that occasion about the wet leasing of the cargo planes, and I have the Hansard here in terms of what the response was to my question concerning the profitability of the cargo operations. I said: why are we wet leasing a cargo plane when we have pilots trained to fly 767s that were discontinued in terms of the London route, and some reference was made to the planes being cargo planes and there was some implication that the pilots could not fly a cargo plane. I was subsequently very annoyed to learn that is simply not so. So if that is not the reason, my question still stands, why are we wet leasing a cargo plane? In fact, some of the pilots were quite annoyed at the implication that they would be able to fly a commercial plane and not fly a cargo plane. It is the same plane. Capt. Singh: The 767s which we had in service from 2012 to early 2016 were configured as passenger aircraft, would have required significant changes in terms of loading and stresses in the internal. That would have been required an investment. The decision to discontinue the use of the 767 came because of the cessation of the London route. So those aircraft were returned. The model that we have for the cargo operation is one that includes a wet

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lease. We could revisit, have a look, but then it would require bringing in new aircraft to Caribbean Airlines which at a time we were looking at reducing costs, would have incurred greater cost. Dr. Henry: I understand that because the context of my question at the time was that the dry lease would cut operational cost. If it was just a matter of changing the internal make up of the plane to store cargo as opposed to taking out the seats for passengers, why did we not go that way in the first place with the cargo? I also would like to know to what extent. We were not provided with any numbers then, I do not know if it was submitted to the Committee after in terms of how profitable the baggage handling operation is in the first place. We were told that it was profitable, but could we get some idea as to the cargo handling? Capt. Singh: Offhand I do not have the numbers for cargo, but we can certainly provide the figures on the cargo operations. The cargo or the freighter operation was based on a wet lease model. We did not look at a dry lease model because that is the plan we had for freight operations and operations out of North America to the Caribbean. Dr. Henry: So I hear what are saying, but I am just for the record saying that it would make sense that the dry lease would be less expensive to operate. At least we can agree on that? Capt. Singh: We have not done a comparison of dry lease operation versus a wet lease operation, so it is difficult to say today whether one would have been better than the other. Dr. Henry: We know that the London route was discontinued and we accept that, but we had the pilots trained intercepting to fly the 767s, and that was essentially the crux of my question, as to why we could not transfer them and fly the cargo planes. But I will move on now. But sticking to 767s, was CAL still incurring payments on this wet lease arrangement with these 767s into the end of 2016 or into this year?

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Capt. Singh: I just want a clarification on the wet lease. Which wet lease is that? Dr. Henry: This one, I am talking about the passenger one, the one that was to go on the London route. I am off the cargo for now. Capt. Singh: So you are speaking of the 767 we had on dry lease. It was a dry lease. We operated with our crews; we are still incurring payments on the 767. That goes until August of 2017. Dr. Henry: So we discontinued the route and we are still paying? I am talking about the 767s, the planes that used to go to London. Capt. Singh: The leases were due to expire in 2017. We returned the aircraft but given that we were returning the aircraft, we had to negotiate with the lessors and that is the agreement we have with the lessors. Dr. Henry: So we are still paying for the planes all now, while the planes are flying for another airline somewhere? Capt. Singh: We are paying a part of that lease. Dr. Henry: Are these planes the ones flying between Guyana and Toronto? Are those the same planes? Mr. Carrington: Chair and member, as we know, those aircraft went to the Air Canada route. The redelivery cost for an aircraft is quite substantial, so we got a significant reduction on the actual cost to redeliver the aircraft early, but we had to continue paying a portion of the lease until August of this year. Dr. Henry: Could we get some idea of the cost of this? I was made to believe it is quite substantial. Mr. Carrington: It is $135,000 per aircraft per month. Dr. Henry: Per month, per aircraft, so two times—so US $270,000 per month approximately. My next question, off the topic of the 767s now. In terms of the move from Nicolas Towers to the Government Campus, what kind of savings might accrue to

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the company in terms of that move? Mr. Quong Sing: The decision at the time for us to move was a number of conditions we looked at. One, we were fast running out of space in terms of the crowds that we were expecting in the offices. Two, we did not have any space to expand. It meant separate shops as they were, and therefore dividing the offices into a number of units would have given us some challenges in terms of staffing as well as security. Secondly, the cost in terms of economics, was quite a significant savings in the per square foot cost, it is somewhere in the vicinity of 50 per cent savings in terms of our move to the Parkade building. We will be doubling the floor space at half the unit cost. Dr. Henry: So it is a significant savings for the company? Mr. Quong Sing: Yes, it would be. Dr. Henry: My third area of questioning: is CAL partnering with Uber in any way currently? Mr. Quamina: No, there is no partnering with Uber. Dr. Henry: I was led to believe that there is some kind of partnership with Caribbean Airlines and Uber taking place. Mr. Quong Sing: There was a preliminary discussion initially with Uber when they first considered to come in. However because they were not the prerequisite, I would say formulas, in terms of taxation, et cetera, and was not approved, as a state enterprise we thought it best not to go in until the actual facilitations and so forth were in fact in place at the time. So now that it is, I would say from what I understand, formally being done, we will look at it again. Dr. Henry: When you say formally has been done, has the Minister approved the operations of Uber? Mr. Quong Sing: I am not familiar with it. Dr. Henry: Because that was my follow-up question, that if you were partnering

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with Uber, was the legal issue of Uber’s operations clarified in this country as yet? We know they are operating. Mr. Quong Sing: That is why we are taking a lot of care. We have not, as I said, partnered. There was an initial discussion where they had approached us and we thought it best to hold. As a state enterprise, we have a responsibility to ensure that we comply with various different aspects and laws within the country. Dr. Henry: I would stop there for now. Mr. Chairman: Thank you very much, Dr. Henry. I would like to ask a question of the Civil Aviation Authority who have representatives here today. I would like to find out from the Civil Aviation Authority, what is your assessment of the performance of Caribbean Airlines in terms of all the areas under your purview under the Act? Could you help us to give us your assessment of how Caribbean Airlines is performing? Capt. Lawrence: Chairman, I will ask the Director General to answer. Mr. Regis: The performance of Caribbean Airlines—Caribbean Airlines continues to satisfy the requirements of the Act and the regulations, as far as we are concerned, because we do our regular surveillance. Mr. Chairman: I want to direct the attention of the representatives of the Civil Aviation Authority to a news story found in the Newsday dated, Thursday December21, 2015, entitled, “CAL’s ATR woes”. And there is actually a story also January24, 2017, “Troubled flight from CAL”. I would like to find out, what is the process that the Civil Aviation Authority uses when there is a report of an incident on an aircraft in TrinidadandTobago air space? 11.50 a.m. Mr. Regis: Whenever there is an incident in Trinidad and Tobago airspace, the operator is required by regulation to submit what we call a mandatory occurrence report. Once the report is received an investigation is conducted, and if they are

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necessary to provide corrective actions for the airline, that is done. Mr. Chairman: Would the Civil Aviation Authority have a view regarding any abnormal occurrences of incidents over the past couple of years? Mr. Regis: Could you clarify? Mr. Chairman: Okay, you are mandated for managing civil aviation and tracking, and investigating and reporting on all incidents; over the years of which you have been doing this, has there been any noticeable increase over the past few years? Mr. Regis: Not really. Mr. Chairman: And that goes to the crux of my question, because in the research for the coming year we could not find any publicly available information on aircraft incidents, and I saw in your response to the questions posed by the Committee that you are not required to put out any public information, but I would like to suggest that as the body with responsibility for civil aviation that information regarding incidents on aircraft in Trinidad and Tobago airspace should be public information. I think members of the public have a right to know, and that if in the event that— and I want to be clear, the Committee did this research, we checked with several other civil aviation organizations around the world, and it is interesting the way in which it is treated, and when we did our information— So, for instance, the Transportation Safety Board of Canada, you can go to the website and download a spreadsheet with every aircraft incident from 2004 to yesterday on the front page of their website. I go to the Australian Transport Safety Bureau, Australia Civil Aviation Safety Authority, and the latest investigation report is at the front of the website. You have a listing of all of the incidents as of yesterday, and it is minor incidents, you know, lack of separation, loss of separation between aircraft, a near miss on the tarmac, but I think that is information that the public needs to know, and I want to share with the public, and I want to share with you, the UK Civil Aviation Authority follows the European directives on this matter, and

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here is the statement they use to describe why they do it: The purpose of occurrence reporting— And I want to quote: —is to improve aviation safety by ensuring that relevant safety information relating to civil aviation is reported, collected, stored, protected, exchanged and disseminated. It is not about attributing blame or liability. So, I think that I understand, I have looked at the regulation regarding civil aviation; I do not think there is anything that precludes the Civil Aviation Authority from putting out a report every so often to let the travelling public be aware that airline X had an incident on this date, we have investigated the matter, and we are happy—whatever needs to come out of it. But I think that in the situation where people see things in the newspaper, and then the body with the responsibility for regulating the industry, where you can find no publicly available information, I think that is something that needs to be addressed and addressed urgently. So, I would like to have your thought or comment on that. Mr. Regis: Mr. Chairman, the Authority would take into consideration your comments and would acknowledge. Mr. Chairman: Thank you very much, I appreciate your very direct response. I think I go now to MP Leonce. Mr. Leonce: Thanks, Chair. Just going back on member Henry’s questions, the cost incurred for stopping the UK route, have you evaluated that decision, and if you all were to make a decision now based on all the information that you have, based on the cost and benefits to clients, would you still make the decision to stop the route, or would there maybe be an alternative decision? Mr. Quamina: Member, under the board, under Chairman Lok Jack, the decision was made to bring the route to an end, and that was made on a significant amount of analysis. The route was reintroduced, I think, under Chairman Nicholas, and it

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continued to be loss-making route, and it continued to be significantly so. So, the fact about it is, I think, that a route from Port of Spain to London is simply not a sustainable route for the airline. By any stretch of the imagination the losses are quite significant. Mr. Leonce: Okay, thank you, Chair. My question, basically, is putting myself as an employee behind the counter of CAL during the Easter period or a high-peak season. I am pleased to hear the review of bookings, the system to eliminate overbooking, but currently, and most of us would have experienced some form of discomfort that will lead to some upset as a passenger waiting to traverse the air bridge, what steps—because I am looking at your strat plan—have you put in place, one, for the employee in terms of their safety and so on that there is a security plan for the behind-the-counter safety on your strat plan? And, two, in terms of—while the process is improving with bookings and the reliability of the aircraft on the air bridge, what steps for improved customer service to the aggrieved customer, whether it be from Tobago to Trinidad or from Trinidad to Tobago? Capt. Singh: With regard to the air bridge we have looked at travel and demand year over year. We have also looked at events that would attract travel between Trinidad and Tobago. From that we have developed a heat map. On a weekend by weekend basis and a month by month basis, and it is based on that we have built our schedule for the air bridge. Additionally, operationally, we add flights to meet that demand. There are times when the standby passengers show up in the morning, say, and it takes some time to mobilize aircraft and crew. So, it does take some time to recapture that. We are moving towards communicating with standby passengers, and I have seen it taking place where we let them know the time with which they can expect to travel. And, that is basically the system we have put in place for the air bridge. Mr. Leonce: And that is great, but my question is, currently, because of the quick

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build-up of standby passengers there is going to be some deficiency in the system, so there would be aggrieved passengers, which is what we are experiencing now, what I am asking is, while you are improving your systems with respect to how you book, and being able to change bookings to meet the demands, what are you doing to, one, secure your employees that are dealing with these aggrieved passengers? And two, some level of customer service, what are you doing to mitigate against that? Ms. Ligoure: In respect to the circumstances regarding the—well, mitigating against the customer service issues. I am trying to give you a short answer to the issues surrounding the air bridge. One, the longer answer is, there is a task force that is charged to closely manage the operations of the air bridge. The task force has a system we use, developed around a heat map, and the heat map looks at events, high- demand events in Tobago, and we deploy the necessary resources that are required to manage the operations of the air bridge, particularly at high-traffic times in order to eliminate some of the stresses on the system. What we are currently doing is reviewing what we offer the customers in respect of delays on the air bridge so that it is more in alignment with the international standards, because it is the same sort of discomfort that would be experienced. In addition to that we are working closely with our handlers. Just, I think it was about a week and a half ago we met with our handlers in Tobago to work and collaborate more closely in terms of lifting the service standard so that it is more positively consistent. But, by virtue of the sheer numbers on the air bridge you would find that there are times when the service offering would lapse. And, again, I say all this to say that we are continuously improving what we offer, how we offer it, and bearing in mind that we want to minimize passenger inconvenience. We do have some challenges in respect of the air bridge regarding space. Space is an issue by way of infrastructure, both at ANR international and at Piarco international.

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So, for example, if we have a jet service and an ATR departing around the same time, or two ATRs, you find that there is general congestion in the domestic area, which is inconvenient to the customers, and we try to manage that as best as we are able. So, to answer the question, it is a continuous programme. We are due to have a meeting of the task force within the next two weeks to reconvene that task force, so that we can put our collective heads together to see how we can continue this general improvement of the management of the air bridge. Mr. Quamina: Member Leonce, if I could just add to say that within—since my presence on the board—within the last month or so, the board has received some direct complaints by way of letters from members of the public, and in fact from at least three of your colleagues about treatment at the counter while trying to get to Tobago, and the board is actively looking at the relationship between the counter staff and the customers, especially, I think, in circumstances where people are trying to get on flights and the manner in which they are being treated. So, we are actively looking at that in terms to improve that aspect of the service. Mr. Leonce: And just to talk about the streamlining of the security at the airport stations, what was that? What stimulated that to be an item for the strat plan? Mr. Quamina: MP, we will have to respond to you about that aspect in writing. Mr. Leonce: Okay, thank you very much. Mr. Chairman: Thank you very much, MP Leonce. I would now throw to MP Karim. Mr. Karim: Thank you very much, Mr. Chairman. On the last occasion mention was made about a fuel dashboard to effect some measure of savings, might you be able to tell us something about this fuel dashboard? For example, when was it procured? At what cost was it procured? And whether there was a different date from when it was procured as opposed to when it was effectively being used? And with respect to that same fuel dashboard, how much money has been saved as a result

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of the implementation of this cost-saving measure, and whether you are getting proper reports arising out of the implementation of this mechanism? Capt. Singh: The fuel dashboard was costing somewhere around US $60,000 to acquire, and prior to acquiring the fuel dashboard, Caribbean Airlines flight operations also identified areas where there may be cost savings. We acquired the fuel dashboard, there was data and information that had to be processed by the provider in order to start providing us with guidance, with areas where we could further save. We provided that data—so, acquired at one date and then output from the dashboard came at a later date. We continued to provide information; it has to be continuous information. For example, we may identify an aircraft that may be burning more fuel, and therefore we need to ask maintenance and engineering to look at that aircraft and understand why it is burning more fuel. We have realized significant savings in terms of volume year over year using the cost initiative that we have put in in-flight operation and using the guidance of the fuel dashboard. Mr. Karim: But just to conclude in terms of the question, when was it specifically—if you can give me a period of time. In other words, when you bought it, or when you got it, did you implement it immediately or was there a period of lag when you implemented it? You see, what I am getting at is that you would have invested US $60,000, just over a quarter million dollars, but what is it that you did? The savings of cost, the intention was to have the cost savings, but what happened, was it effective on purchasing, or was there a period of time within which it was not utilized? Capt. Singh: Data had to be provided through the provider for them to analyze what was taking place with CAL. So, they looked at aircraft on the ground, they looked at what we are doing in taxiing the aircraft to take off, what we did in climb, what we did in cruise, so they analyzed the entire flight for us. So, it took some time

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before they could provide us with the information. With regard to your question, I will have to check what period elapsed between paying for the dashboard and actually getting data from the provider Mr. Karim: My other question has to do with the pilots. If we can get a sense as to, for the last two hirings, because again, I am sure there are people who are sitting down here who would recognize that we had instituted an aviation campus, not that we were training pilots, but the intention would have been. But, for the last two hirings of pilots, would you be able to tell us how many vacant positions you wanted to fill? How many applicants would have applied for those positions? But the key to this is that I wanted to find out is, what was the failure or success rate of those who would have applied? In other words, if you had six vacancies and you had hundreds of persons applying, how many of those hundreds would have been successful or would have failed? What is the failure rate or the success rate? And, in addition to that you would have had to assess them to determine, by some assessment committee, what was the cost of that assessment to the airline? And in some cases where people have not succeeded they may be asked to pay, but what was the cost? So, number one, for the last two hirings, how many positions, how many applicants? What was the success rate or the failure rate, and what was the assessment cost of that exercise? Ms. Guy: Mr. Karim, you are asking about the last two hirings, meaning last two groups of pilots that we took on. Okay, the way we do pilot recruitment and selection is that at the point in time that we believe we need resources, we will do an analysis of the manpower. We look at that in the context of the schedule and we would see what numbers we need. When we recruit and select pilots it is an expensive process, so we create an order of merit list. So if we determine that we needed six pilots we will go through a process and create an order of merit list which would give us perhaps about 20 or 25 suitable persons and then we will offer, if we need six, the

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first six, and we would have maintained that list for three years. So the last two hirings took place in—2015, Jags? Capt. Singh: 2016. Ms. Guy: 2016. There was one, well before that, 2013 because my period was 2014 to 2016 and there was one, and then there was one before that, before I came in. So, those would have been the last two hirings. I could speak more specifically to the last one. We did create an order of merit list and persons were recruited from that list, having gone through a process, a recruitment and selection process, and deemed suitable to come into the organization to be trained as pilot. That list expired in 2016, and then we went through the process again. Mr. Karim: I just wanted to get a sense as to, first of all the cost of that assessment? You did say it was an expensive exercise. Ms. Guy: Yes. Mr. Karim: And, in addition to that, were you concerned about the success or failure rate of those who were assessed? Ms. Guy: In the last set of hirings we put out an advertisement, we wanted six pilots. We put out an advertisement, we got 125 applications. We went through a process of shortlisting those persons, they go through psychometric testing; we have other online tests; we have panels that we set up to do structured interviews in a particular way; and from that list we would cut that down to about 50 persons who would go through a process of simulator training. On the last occasion we stopped at that stage because we determined that we would not proceed with the recruitment process and select anyone until we were completed with the manpower audit that we are currently undertaking. Mr. Karim: So, you were not satisfied with the—about 70 persons? Ms. Guy: About that, yes. Mr. Karim: And that is where I was going because it would have impacted upon

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the quality of the experiences of the pilots coming to the interview. Ms. Guy: The recruitment process is rally rigorous. We put the candidates through a very thorough process, and we shortlist, make sure we have the right persons to place on that order of merit list. Mr. Karim: What is the retirement age of pilots? Ms. Guy: Sixty-five. Mr. Karim: And just to get a sense in terms of in the airline, not only in terms of the pilots, but could you give us a sense—if not now, maybe in writing—if you could indicate to us how many persons have reached their retirement age and how many have been rehired having reached that age? Ms. Guy: Okay. Just for clarification, the official retirement age in Caribbean Airlines is 60, but pilots can work up to 65. And at this point in time we have, I think the number is in the— Mr. Karim: You have about 24 between 60 and 65. Ms. Guy: Right, between 60 and 65. Mr. Karim: So, they would have been rehired? Ms. Guy: Yes, but on the same terms and conditions, same seniority and everything. It is just that we retire them at 60 because that is the official retirement age limit. Mr. Karim: And just finally, a previous CFO made mention of a billion dollars—I am just saying what was reported—that would have been lost to credit card fraud and also in terms of cargo issues, do you have any experiences in the recent times that would cause you alarm? In other words, are there issues in terms of any such matters again of corruption in credit card fraud or in cargo issues? Ms. Guy: Okay, so I will hand that back to the Chairman and he can designate who will answer that question. Mr. Quamina: Member Karim, could you say what figure did you quote?

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Mr. Karim: No, I am saying that there was a previous statement, not in your thing here, that there was a concern over a large sum of money, and I think what was mentioned was a billion dollars—I do not know how that was arrived at—but with respect to credit card fraud and also corruption issues with cargo, and the question I am asking is if there is still that concern for issues of corruption with respect to credit card and cargo-handling matters? Mr. Quamina: Insofar, I am not aware of any issues insofar as cargo is concerned. We still do experience difficulties with respect to what is credit card fraud, and I will ask Mr. Agarrat to give you an update in relation to that. Mr. Agarrat: Good day Committee and members, in regard to the cargo issue which was a comment made somewhere in 2013, I believe, what we found out that to be an accounting error and we had rectified that issue with our external auditors and made the appropriate adjustments. Mr. Karim: What was the figure, the accounting error, the figure that was an accounting error? Mr. Agarrat: We had estimated the error to be in the vicinity of say US $20 million. Mr. Karim: As an accounting of US $20 million? Mr. Agarrat: Over two accounting periods. Mr. Karim: In cargo? Mr. Agarrat: In cargo. Mr. Karim: And the other matter had to deal with the credit card? Mr. Agarrat: The issue with credit card fraud, that is a continual issue, based on what we in Caribbean Airlines look at as criminal activity against the airline, where we have persons using other people’s credit card information to make bookings through our website. Currently, we have been working with another provider in looking at—we have a system currently, but we are looking at a more

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efficient system that could help prevent the frequency of which we have those issues. Right now we have a team that works every day in trying to mitigate the impact of that. Mr. Karim: Can you indicate the exposure in that regard with respect to the credit card fraud that you are currently experiencing? Mr. Agarrat: Currently, about US $40,000 a month. Mr. Karim: US $40,000 per month in credit card fraud that CAL is experiencing? Mr. Agarrat: Yes. Mr. Karim: Can I just ask, for example—I know the Chairman might be—I see his mike is on too. What is it that you are doing currently, or what have you proposed, or what are you proposing to do?—I mean, I know you are talking about the new system, but if you could give us some, so that the country would be a bit comforted to know that you are handling these matters expeditiously and very clinically to avoid US $20 million in fraud that— Mr. Agarrat: No, no, no. Mr. Karim: I am talking about the cargo issue that you mentioned, the accounting error of US $20 million, and then the credit card fraud of this sizeable monthly sum. Mr. Agarrat: The accounting error, that was rectified within our 2012 accounts, so we restated those accounts, so that was part of our delay in preparing some of our accounts. What we realized was that there was an overestimation in some of the revenues declared, and we rectified that matter, because what it meant, there was a receivable sticking out that was not something that ought to be collected based on the overestimation. And the issue with the credit card fraud, we are currently working with a provider who is more integrated with our present passenger service system, and that provides a more, —should I say, integrated approach in

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tackling and identifying what is the probability of cards that might be compromised. Mr. Karim: But in cleaning up the act, have you brought people to book, to account? Mr. Agarrat: We have made a report. There are challenges involved in that. One of the issues we have is that some of the information that we would require to have a proper either criminal or civil prosecution is not available to us given our contractual arrangement with our PSS provider right now. So, part of the new implementation is to actually deal with that issue. I have discussed with our legal counsel where we see that we are going to have challenges in going in the criminal prosecution, that we explore the civil prosecution of certain matters. Mr. Karim: What in your view is the potential for recovery? Or, is it going to be an item to be written off? Mr. Agarrat: There are two issues involved in that. One, we have the issue where some of the passengers, it is when fraud has been perpetrated upon them, so for instance they have either bought the ticket through a third party who would have been the person who engaged in the fraud. We have liaised with IATA on what is the best mechanism to recover some of those items. It would require getting a significant amount of information on the passenger. We have looked at the avenue of going through a debt collector—so once we have all the available information on the passenger, and also we are going to have to find a way to work with a number of different jurisdictions, because obviously we can have passengers who live in different countries, they have different legal requirements in bringing either criminal or civil matters. Mr. Karim: Could you tell us of your other destinations, whether similar situations arise, and could you give us an idea of the amount of money, and which is the closest destination that such a situation has arisen? 12.20 p.m.

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Mr. Agarrat: I cannot give you specifics on the numbers but I could give you where the points of entry or commencement of travel, where we see high incidence of fraudulent travel, out of Trinidad for travel to NewYork, out of Kingston also, for travel out to NewYork. We also had an issue with, out of Caracas, where we think we tackled that using some assistance through our immigration authorities. We also have instances out of Guyana to North America. So those are the four areas we have seen where we have a lot of instances of attempted fraud. Mr. Karim: And are those recoverable? Mr. Agarrat: Hardly. Mr. Karim: You have a ballpark figure in which you can tell us and if they are recoverable? What I am trying to establish is, again, this would be a haemorrhage out of the airline? Mr. Chairman: And I would like to interject here. I would like, the information requested by MP Karim, we would like to give the company the time to put the data together and submit it to the Committee—[Interruption] Mr. Agarrat: No problem. Mr. Chairman:—we will do the formal request. The Chairman would like to just take us back to Ms.Guy, regarding the pilot recruitment. I have looked at the numbers you provided to us and you have 28 per cent of your current pilot body in the age group 56 to 65. So a little over quarter of your pilot body is either due for retirement or past the retirement age. So I know that you have done your last hiring in 2015— Ms. Guy: Yes. Mr. Chairman: So that I think you are almost, you are virtually overdue right now. What is the plan?—because on the numbers you provided to us, 28 per cent of your current pilot body is between the ages of 56 to 65. That is quite significant so that they are either preparing for retirement or have retired and have been returned. But

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even then the shelf life on the returnees is finite. So is there a normal succession plan? I need to understand how that works. Ms. Guy: Right. Normally we would be in a hiring mode with respect to pilots. When we returned to the 767 we did have a small surplus. We projected over a three-year period what our resources would look like in terms of pilots and we saw a small surplus but we decided to retain those pilots given the turnover that we knew we would have over that three-year period. And it does take a long time to train a pilot. So the 11 pilots that we had a surplus, we said no useful purpose would be served in sending them home and we can build them into the schedule, send persons on leave and so on. But that has quickly been absorbed. And in 2016 we determined that we needed six more pilots based on the schedule. And we have started that process which we have now put on hold and which the operations department, they have reorganized the schedule so that we can work with the pilots that we have right now and use the pilots that we have in Jamaica and in Trinidad to meet the schedule. We do hope to complete that manpower audit before the middle of this year, perhaps by May, so that we can see—we have a good picture of what our requirements are, particularly with respect to the operations that we would have. And I know that the operations department has been looking at the utilization rate and trying to increase the utilization rate for the pilots. So that is also helping. Mr. Chairman: Well, your data you presented is interesting. You advertised for six positions, you got over 100 applications. So there seems to be no shortage of available people who seem to think that they are qualified. So I have nothing against retirees working and continuing to earn, but it seems that there is a large body of people who are looking for jobs in the piloting field and that that should be part of the company’s strategy also, that while you—I understand piloting is a unique skill and it requires people with a lot of experience, you need to have them on board. So

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it requires a mix. Ms. Guy: Yes. Mr. Chairman: I want to give the floor to Sen. Baksh who has been waiting for a little while. Miss Baksh: Thank you, Chair. The company last year upgraded its frequent-flyer programme and there have been many challenges. For example, when someone tries to check in and they give their frequent-flyer number the system does not always recognize the numbers. Why is that so and is it because the system is not automatic and it is done manually? And also, with respect to the transfer of membership numbers, I know you all are in the process of that. Was this done successfully? Also, with regard to the issuance of the frequent-flyer new membership cards, what is the status? Mr. Quong Sing: Through the Vice-Chair, Chairman, members of the Committee, yes, we did migrate into a new loyalty system. Prior, we were running actually on two systems: one for Jamaica, primarily Jamaica customers, and one for Trinidad customers which was quite inefficient. In joining the two systems together that did create the challenge in terms of the membership numbers because we consolidated it and created one number. So there were some challenges and part of it was communication in our end, in terms of the front line. That has since, in my understanding, been resolved and therefore everybody should have their numbers. In terms of—may I ask, your other question in terms of—[Interruption] Hon. Member: Transfer. Mr. Quong Sing: Transfer of miles. We have started a new programme. We keep at a low rate, in terms of branding and product, we keep—as the industry changes quite a bit we change as well, in terms of trying to offer the best that we can, and I believe you might be referring to pooling of miles, family pooling? So where families, for instance, some may be travelling on business, the wife may travel on

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leisure, et cetera, we are allowing families to pool their miles in order to be able to get the best use and opportunity to use the mileage, should they want to use it on a flight for any member of the family. Miss Baksh: I have one more question. My question relates to the cabin crew transportation. Why does CAL continue with the practice of providing home-to- airport return transport for local cabin crew? And also, is it not normal practice with airlines to only provide this at destinations and not the home base of the cabin crew? I have one more questions before you answer, and I also would like to know, what is the annual cost of this service and who are the providers—contactors, actually? Capt. Singh: We have, in CAL, provided transport for cabin crew from home to work and to return. Cabin crew leave home at different times of day. Cabin crew return home at different times of day. We have had security incidents with cabin crew. It is for the safety of cabin crew, both in Port of Spain and in Jamaica that we provide them with transport. The overall cost of the transport, I do not have a figure, we will be able to provide it at a later date and the service provider is R&R Transport in Trinidad and I believe it is Chin’s Transport and Tours Limited in Jamaica. Mr. Chairman: Just on a quick follow-up. You missed one element of the Senator’s question. What is the norm with airlines, regarding to that? I understand your response is that you do it because there is a security issue and perhaps also there is a legacy issue because you have always been doing it. That for me is part of the issue, that probably the airline is doing things because it has been doing it all along and perhaps some of those things need relooking at again. It does not mean to stop it, but at least look at it again. I think the question the Senator asked was whether or not what is the practice of other airlines? Is it the practice to provide home-to-airport service for home base crew? Is that the practice? Capt. Singh: It varies by airlines. There are airlines that do and there are airlines that do not.

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Mr. Chairman: I think I have one question from Sen. Mark, but Sen. Henry wanted just to follow up on one of the earlier points and then I will take one last short question from Sen. Mark before we wrap up. Dr. Henry: I know we are pressed for time to wrap this session up, but on the last occasion when we talked about the issue with the ATRs we were told that getting out of the contract with the company is difficult but not impossible. I think that was the language that was used. And it would involve some negotiations because of the problems with the aircraft, obviously, where it should put us in a position where we could negotiate and get some kind of benefit or if not for outright breach of contract for providing substandard equipment. Has there been any progress with that? Mr. Quamina: Member, I think my response on the last occasion was that the contract had some clauses in it which I found to be somewhat surprising insofar as the warranties and the limitation, insofar as those warranties are concerned. That was based on, not only my reading of the contract, but also there was advice received from a fairly well-known firm abroad in relation to their analysis of the contract. Since then we have obtained a second opinion in relation to the contracts from another firm and that firm has given us certain advice in relation to the contracts. So there has been progress made in relation to it; for obvious reasons, the advice is not something I would want to disclose at this moment. Dr. Henry: Okay, that is understandable. No problem. Mr. Chairman: Sen. Mark, last question from the floor. Mr. Mark: Two small questions, no pun intended. [Laughter] I am directing this to the Civil Aviation Authority. In your submission you stated that the Civil Aviation Authority in accordance with the Act has established and maintained a safety oversight system. Would you be in a position to provide this Committee with a copy of your Safety Oversight System Manual? Capt. Lawrence: Chairman and Senator, we shall send you a copy, however you

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like it, soft copy or hard copy? Mr. Mark: Both. Capt. Lawrence: Will do. Mr. Mark: And my final question, Mr. Chairman, is this, I want to quote the Civil Aviation Act. This is again directed at the Civil Aviation body here. I think it is section 8(1). It reads: In performing its functions and exercising its powers, the Authority shall have as its paramount consideration the safety of aviation. I want to ask the Civil Aviation officials, based on your submission concerning the identified effects with the 9Y-TTA and 9Y-TTD aircraft, we are concerned that the issues identified appear to be symptoms of an underlying root cause. The question is, has troubleshooting and maintenance action by the ATR manufacturers successfully resolved the root cause of the defects? I want to get a clarification from the Civil Aviation Authority on this. Mr. Regis: The Civil Aviation Authority has received from Caribbean Airlines a report with respect to the actions taken and we are satisfied with the actions taken for return to service of the aircraft. Mr. Chairman: Thank you very much. As I begin to wind up I just want to have a follow-up for Ms. Johnson, Acting Permanent Secretary, Ministry of Finance. I have it correct? Ms. Phillips: Ms. Phillips. Mr. Chairman: Ms. Phillips, forgive me. At the last hearing, the representative of the Ministry of Finance, a question was asked regarding Caribbean Airlines aremaking a proposal or submission to the Ministry of Finance regarding structuring their fees, regarding additional charges, and that the response that we received from the Ministry of Finance is that they have received information that they would be able to give a decision or an update around February. Given that today is the middle

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of March, could you give us any update or any progress on that matter? Ms. Phillips: Well, we have received all—we had needed additional information from Caribbean Airlines which we received. The matter was analyzed by our analyst and it is before the Minister now. Mr. Chairman: Excellent, so a recommendation is before the Minister. Ms. Phillips: Yes. Mr. Chairman: Well, I am happy to report to Trinidad and Tobago that there has been some traction in the matter. Let us see how long it stays on the Minister’s desk. Well, I am very happy to hear that because that was one of the issues that came out of the last hearing, the fact that Caribbean Airlines is constrained in the Tobago route—[Interruption] Ms. Phillips: One of the recommendations was that we receive the opinion of the THA before we go ahead. Mr. Chairman: That is fine and we accept that. But I think that the important issue that came out at the last hearing and it came out today is that there are some ways— the ways in which the system for the Tobago ticketing that constrains the airline in being efficient on that service. So rather than a capacity issue, probably the average citizen might be thinking perhaps you need to put on more planes. The issue is really an issue to deal with how the system is ticketed and the way in which—if you apply, what applies as a normal fare, if you do not use the fare it is nonrefundable or there are charges for reissuing the ticket, Caribbean Airlines is not allowed to do that. So that is actually constraining the system. So I hope that the Ministry of Finance takes a good look and makes a decision on that which will assist the airline. So I want to thank very much—[Interruption] Mr. Quamina: Mr. Chairman, sorry. There are two very, very short issues I just wanted to—[Interruption] Mr. Chairman: I will give you the opportunity to make a couple of remarks, just

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give me one minute. [Crosstalk] Certainly. I want to firstly, I want to begin my wrap-up by saying that I think that the Committee is pleased with the responses from Caribbean Airlines on the queries that we have had and we appreciate the time taken by the members of the Civil Aviation Authority, we know they are very busy people who are dealing with a significant issue in the country. We appreciate your ability to come and also the members of the Ministry of Finance for taking time out of their busy schedules to be here. As I begin to wind up, I would like to invite closing comments from the Vice-Chairman of Caribbean Airlines. Mr. Quamina: I am very grateful. Just on a quick issue of the pilot recruitment. There is a manpower exercise that is going on and pending the conclusion of that exercise which we have put a very short time frame on, we would be reluctant to engage in any hiring until we understand just how many pilots we require to provide the service that we are providing. So that really is, I do share the Chairman’s concern about the age issues, but that is what would be holding us up from taking the immediate step to get that manpower plan in so that we can analyze exactly what this airline requires in order for it to operate effectively. That is one. Secondly, the credit card issue stunned this board at its first board meeting and I would say—it is no comfort—but I would say we were also stunned to learn that within this region we are below the industry norm in terms of credit card fraud. In any event, the fact about it is that we have put all our resources behind getting the necessary equipment to stop it and in addition to which we have also had discussions with the firm of Ernst & Young to come in as well and have a look at the credit card system to make sure—because whether it is below the industry norm or not that those figures were quite astonishing to us. So those were the two issues I wished to address before closing. Mr. Chairman: Thank you very much. I want to say that, as I begin to wrap this

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session up, I think at the last hearing I indicated that I for many years, the Chairman, has been a loyal supporter of the airline in all its various—even the days when Caribbean Airlines or BW flew an A321, very few people could remember that. I flew on an A321 more than one occasion, in the beautiful gold colours, not to mention the L-1011-500 and all the other various ways. So I have a long history with the airline, I understand the challenges of the airline. I have had varying service experiences with the airline and I think that every citizen here wants Caribbean Airlines to be successful. We want you to be successful. This Committee wants you to be successful for Trinidad and Tobago. And there must never be any misunderstanding about what we are here to do. We are here to try to understand your issues and your challenges and to help you to overcome those challenges so that you can perform to the best that you can perform and allow the citizens of Trinidad and Tobago who want to be able to have a reliable, affordable service to be able to go to their destination of their choice, but also for the Minister of Finance to receive appropriate returns, in terms of dividends and profits back to the state coffers. So with that note, I wish to indicate that this meeting is now adjourned. I want to thank the members of the media and the various platforms who have been viewing and listening to this broadcast. I want to thank you for all your questions again and which we will try to continue to address, but I want to thank everyone who has been viewing, listening or being online listening to the survey. Thank you very much. This meeting is now adjourned. 12.40 p.m.: Meeting suspended. 12.45 p.m.: Meeting resumed. Mr. Chairman: I would like to reconvene the meeting of the Joint Select Committee. I want to do a couple of things. I just want to go quickly, we have two sets of Minutes to confirm. We have a matter regarding the next entity and I just

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want to get a quick comment from members on the hearing that we just went through. So there are two sets of Minutes, members. I want to deal with the Minutes firstly, of the meeting of January 09, 2017 and I want to go through the Minutes as usual, page by page, beginning with page 1. Page 2, page 3, page 4, page 5 and finally page 6. If there are no suggestions or changes, can I have someone move to confirm the Minutes? [Confirmed by Miss Baksh] [Seconded by Brig. Gen. Antoine] Mr. Chairman: Very good. Matters Arising from the Minutes of January9th meeting. [Crosstalk] There were two Minutes. I do not have any Matters Arising. I am not sure if members have—on the document that I have been guided by the Committee Secretariat, I do not have any Matters Arising from that Minutes. I will go on to page 1, page 2, page 3. The first four pages were largely issues around the hearing, page 5 and page 6. So I could take it that the Minutes are confirmed and we have come to the Matters Arising. I would like to go to the Minutes of the meeting of February 7th. Page 1, page 2 and page 3. I have one Matter Arising—oh, forgive me, I need to get someone to move, to confirm the Minutes of February 7th. [Confirmed by Mr. Mark] [Seconded by Dr. Henry] Mr. Chairman: Thank you very much. The Matter Arising, I would like to draw members’ attention to page 3, paragraph 2.1, that is the Matter Arising that I have. The Committee requested additional information from VMCOTT and I am sure we have all received a very voluminous folder. VMCOTT is trying to kill us with paper. There are normally two strategies with companies, they provide the barest information or they try to kill you with paper—overload with paper. I am not aware of any additional Matters Arising from these Minutes. If not, could we move on to

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the next item members, which is the matter of the next item before us, which is the entity—well, it is not an entity. We have decided that we are going to deal with borrowing. It is very topical. The suggestion from the Secretariat is that we invite at the very least the Central Bank and we invite the Ministry of Finance to come to talk to us about state sector borrowing. We want to understand what is the status of state sector borrowing in Trinidad and Tobago. Dr. Henry: This was cleared? Mr. Chairman: This was on the work programme that we— Dr. Henry: I remember that there was some issue as to whether we were able to do that or not. Mr. Chairman: Well that, based on the—[Crosstalk] Mr. Caesar: I am being told that the issue really was in terms of the arranging of the programme and not so much with regard to whether or not the Committee would have—as it was a decision that the Committee would wish to make in terms of prioritizing its work. But I am not aware that that was an issue. Dr. Henry: That was not an issue, because as the Chairman pointed out it is not an entity. It is a subject. [Crosstalk] Mr. Mark: And remember the Committee has the authority to deal with any issues that it considers to be relevant but within its mandate. Mr. Chairman: Yes, and we are only dealing with state sector borrowing, any borrowing that affects the state enterprises sector. We want to get a handle on state sector, what is the status of state borrowing across the entire—the only question I have, the date we have here now, March 27th, may not be a date that could work. It is two weeks from now. I do not see that as being giving us enough time, [Crosstalk] Mr. Mark: Why? Why do you think that is— Mr. Chairman: Because we have not sent out the questions as yet, to the entities as yet.

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Mr. Mark: Okay. Mr. Chairman: So will we have any draft reports by the 27th? [Crosstalk] Yes, so that what I am proposing now is that we, let us look at a date after that and we will circulate it. Let the Secretariat look at the calendar and agree on a date going forward. We can work in a way, round robin it. At the next meeting, which is going to be on the 27th of March, Monday, we will look at the issue of the draft reports that will be ready by—certainly, at least one week before that you will send it out to members so we could go through the draft reports and then finalize the rest of the work programme for the rest of the period. Is that amenable to members? Dr. Henry: Yeah. Mr. Chairman: Thanks very much. [Crosstalk] As we said, Tuesday is a difficult day to have any kind of—[Interruption] Mr. Mark: Tuesdays are difficult. Mr. Chairman: So we are trying to rationalize to have all our meetings on Mondays. Dr. Henry: The Insurance Joint Select Committee is meeting on Tuesdays too. Mr. Chairman: So what we are going to try to do as far as possible, keep our meetings on Mondays. If we have to have a Tuesday meeting it will be purely a meeting to do with administrative issues, reviewing reports. It will not be a day when we have a public hearing. Okay, members I think that is on—members have any other business? Dr. Henry: Yeah, lunch. Mr. Chairman: Lunch. [Laughter] Oh, yes, and I just wanted to take two minutes—I know we are already late—members, general feedback on the hearing this morning with Caribbean Airlines, both sessions. Dr. Henry: If we could get some intense sessions like this with all the other entities,

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it would be fine. We have to keep this up. I thought the meeting was fruitful. I think if the reporters do their job, the public would have learnt a lot out of this particular hearing. Brig. Gen. Antoine: I am concerned about the relationship between CAL and the Civil Aviation Authority. The Civil Aviation Authority seems to only want to respond to CAL rather than the aviation authority dealing with all the issues involving matters—[Interruption] Mr. Chairman: Independently. Brig. Gen. Antoine: Independently. Mr. Mark: I want to endorse my colleague’s observation, because my take on it as it relates to the Civil Aviation Authority was that they were an independent body and if they are independent they, as you said, Mr. Chairman, when incidents occur involving any airline they must have the authority to go into the airline. They must have the personnel and the professionals to examine what has gone wrong and they must be able to issue statements independently and as you said, put it on your website so that people could know what is going on. Mr. Chairman: And let people make the decisions that they want to make. But people are making decisions in the absence of information that in my respectful view they should know. Mr. Mark: Because what Brig. Antoine (Ret.) said a short while ago is what we saw throughout, whenever we talked about CAL and the aviation authority, yes, they got a report. You cannot operate and— Mr. Chairman: And they are happy with it. It is one thing to get the report, but they do not do anything with it. Mr. Karim: There is a reason for that, eh. First of all, when you are examining TTCAA you have to examine it objectively in the context of what the law prescribes them to do. But there is another situation. When you look, for example, I am just

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going to call the name because he is here this morning but, I am just giving you a functioning relationship. The chairman is Tommy Lawrence, he used to be the Chief Pilot at—[Interruption] Mr. Chairman: Caribbean Airlines. Mr. Karim: CAL. And, for example, look at the former director general, Ramesh used to work with BWIA. So they have a kind of, you know, from one to the next. I am not saying that there is any underhand thing, I am just saying the reality in a small country with a small airline, everybody know each other. But I think if you want to prescribe then you have to go clinically in terms of the precision of what the law says and operate within that context. Mr. Chairman: Okay, guys, well I think that has been a good discussion. Lunch. Thank you very much. Brig. Gen. Antoine: Guys and girls. Mr. Chairman: Guys and girls, forgive me. The Chairman means no disrespect. 12.55 p.m.: Meeting adjourned.

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CARIBBEAN AIRLINES LIMITED Mr. Michael Quamina Vice Chairman Capt. Jagmohan Singh Ag. Chief Executive Officer Ms. Marina Chase Ag. Chief Financial Officer

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Mr. Colville Carrington VP Maintenance & Engineering Ms. Hyacinth Guy VP Human Resources Mr. Sean Quong Sing VP Commercial (Ag)/EM Revenue Network & Distribution Ms. Kristy Kanick Legal Counsel & Assistant Corporate Secretary Mr. Adrian Agarrat Senior Manager Financial & Revenue Accounting Ms. Dionne Ligoure Head Corporate Communications CIVIL AVIATION AUTHORITY Capt. Thomas E. Lawrence Chairman Mr. Francis Regis Director General (Ag.) MINISTRY OF FINANCE Ms. Lisa Phillips Permanent Secretary Ms. Mala Mohammed Senior Business Analyst (Ag.)

10.26 a.m.: Meeting resumed at J. Hamilton Maurice Room (Mezzanine Floor) Mr. Chairman: Good morning, everyone. I would like to reconvene this meeting and welcome everyone again to this public hearing of the Joint Select Committee on State Enterprises. The purpose of this meeting is to continue the examination of the operations of Caribbean Airlines Limited (CAL), with a specific focus on customer services and to explore what might be some of the possible solutions to challenges being faced by the company. The role of this Committee is firstly to examine the issues which arose, based on CAL’s written responses to the Committee’s questions, and secondly, to aid CAL in improving its operations, resulting in a more efficient and effective organization.

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This meeting is being broadcast live on Parliament’s Channel 11, Parliament Radio 105.5 FM and the Parliament's YouTube Channel ParlView. Viewers and listeners can participate by sending comments relating to today’s engagement via email to [email protected] or via our social media Facebook page at facebook.com\ttparliament, or on twitter@ttparliament. I would like to now welcome officials of Caribbean Airlines, officials of the Civil Aviation Authority. Thank you very much, and officials of the Ministry of Finance, who are here to join us in this session. I would like to begin now by introducing firstly myself and I would ask other members of this Committee to introduce themselves. My name is David Small. I am the Chairman of this Committee and I would like members of this Committee to introduce themselves beginning at my extreme left. [Members of the Committee introduce themselves] Mr. Chairman: Thank you very much. I would firstly like to now call on the officials of Caribbean Airlines to introduce themselves. [Members of Caribbean Airlines Limited introduce themselves] Mr. Chairman: Thank you very much. I would like to now call on officials of the Trinidad and Tobago Civil Aviation Authority to introduce themselves. [Introductions made] Mr. Chairman: I think I missed a couple of Caribbean Airlines people. Did I? Forgive the Chair. Would the remaining Caribbean Airlines persons who are hiding behind there please introduce themselves. [Introductions made] Mr. Chairman: I would also like to invite the officials of the Ministry of Finance who are present in the room to introduce themselves. [Introductions made] Mr. Chairman: Thank you very much. We are now going to get into the meat of

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this hearing. This is the second hearing with this Committee with Caribbean Airlines. For the benefit of the information of the public, I would like to inform the public that the Committee has already met with Caribbean Airlines this morning in a private hearing to deal with some issues, because we consider those issues to be issues that needed to be treated within a particular way, and I do this deliberately to make sure members are aware that issues are not always issues that we can all handle in the glare of the media. So, now that we have had an introduction, I am going to begin now by asking Caribbean Airlines a couple of very, very easy questions. They had some hard ones already. In your submission to us, in your second set of submissions, the Committee requested a copy of a document with reference by your chairman in the first hearing by a document prepared by Lufthansa Consulting. The Committee noted your response, which was, in the view of the Committee, a non-response. The Committee requested a copy or a report that was referenced by your chairman in the previous hearing. We would like to understand why this document was not submitted to the Committee. Mr. Quamina: The document, Mr. Chairman, is a document in respect to which contains information which is of concern to Caribbean Airlines from the point of view of its competitors and from the point of view of its business operations that we felt is a confidential document, in respect to which we have no difficulty making that available to the Committee. We realize it is entirely up to the Committee to determine its discretion, whether it wishes the document to remain confidential or not, and what we had indicated in our response, it did say, “to be addressed during the in camera session”. The fact about it is that the document, if the Committee wishes to have the document, if there was a manner in which the Committee could indicate, it could be supplied to the Committee under confidential head, in a confident letter. Because what has

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happened, those consultants in fact permitted themselves to, and were permitted to, access business decisions, strategies, et cetera, that from a purely competitive point of view, ought to remain confidential. There is nothing of concern in it other than that aspect. Mr. Chairman: Well, I want to share with you that the practice of this Committee has always been if any particular entity is appearing before the Committee and we requested documentation, the Committee expects full compliance with the request for documentation. If, in the view of the entity, there are matters there that are of commercial concern, or considered to be competitive information, you can request that any queries or questions that the Committee wishes to have on that particular matter, to ask to have those issues aired in camera and the Committee will duly consider that request. It is not up to the entity to choose to not submit the document. Once the Committee writes and requests the document, the Committee expects to receive the document. I am leaving it at. So that I would like to hear from you, when do you think you can supply that to the Committee? Mr. Quamina: Well, Mr. Chairman, we will write the Committee and express our concerns with respect to it, and the Committee can indicate their position, then we would respond accordingly. But there is no delay in terms of the ability to provide it, but we would prefer to outline our concerns to you in writing so that you— [Interruption] Mr. Chairman: And I have no problem with that Mr. Deputy Chairman. All we are trying to get at is when do you think the document would be supplied to the Committee? Mr. Quamina: Once the Committee hears our concerns, within 48 hours. Mr. Chairman: Thank you very much. I appreciate your very direct response to my very direct and straightforward question.

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I have one other short, easy question before I give the floor to other members who I think have harder questions than I. The Committee requested inside of the report here—yes, I found it. We requested a copy of the management tender process, the documents, the evaluation documents used for procuring the ATR aircraft. What was supplied was a heads of agreement regarding spares. The Committee requested the management tender process and evaluation documents. I want to be pellucidly clear. You should be familiar with this document. It is the State Enterprises Performance Monitoring Manual and at section 6, it details all the requirements regarding procurement. There is an interesting section right at the end of that, that deals with making sure you have records, which is actually, if you do not have records it is an offence under the—let me be correct—the Chairman does not want to be misquoted. I want to quote from section 15(2), procurement files: The relevant purchasing section shall be responsible for the maintenance and storage and procurement of files, in accordance with section 55 of the Proceeds of Crime Act. So that you must keep records of all procurement activities. I would think that purchasing an aircraft is not a daily or regular purchase, so that there must be some files regarding the procurement. What we have received from the organization does not reflect what our request was. Could you help us please? Mr. Quamina: I would ask Mr. Carrington to respond. Mr. Carrington: Chair and members, to get an aircraft for a particular mission, there are not very many manufacturers. In this case it was only two, Bombardier and ATR. So these were the two parties who were invited to make submissions and demonstrate their type and the fit for the purpose. So we invited ATR and Bombardier. That is how this process was handled. Mr. Chairman: And all we are saying, we are requesting the relevant documentation to support what you are saying. I am not doubting you in any way.

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The Committee simply requested the management tender process evaluation documents. So that all we want to see, just as you said, you invited Bombardier, you invited ATR, you would have gone through a process, the invitation to bid. There is a nice process detailed here. You would have done an evaluation. You would have made a recommendation to the board. It would have gone to wherever else it needs to go to for approval. We would like to see a copy of that documentation. When do you think you could supply that to this Committee? Mr. Quamina: Mr. Chairman, within seven days we would supply the relevant document, the response to that—a more particularized response to that question because I am not quite certain that Mr. Carrington has answered it as fully as it is required to be answered. So we would provide you with a more particularized response within seven days. Mr. Chairman: Mr. Vice-Chairman, I wanted to be pellucidly clear. I understand your response. What we would like, the Committee would like to see, is the documentation, and I want to be specific, regarding the procurement of the ATR aircraft, whatever documentation that you would have to show us that you were engaged in a process, you did, as Mr. Carrington indicated, you invited bids from ATR and Bombardier. I think those are the two manufacturers who could manage the requirements of CAL in this. You invited them. This is what they bid. This is what they said. This is your company’s evaluation of the process and you made a recommendation to your board. We would just like to understand what transpired and that is all. Thank you very much. Mr. Quamina: Chair, just for clarification purposes. You referred us to 16, which I understood to be documents used for May, just spares purchases for the ATR, is that what you referred to? Mr. Chairman: Regarding the question that I asked? Mr. Quamina: Yes, please, so that I can be clear.

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Mr. Chairman: No, inside of this document? Mr. Quamina: No, no, no. I am very familiar what that document. Mr. Chairman: Good. I am so happy to hear that. I have a few questions on this. Mr. Quamina: Yes, the reference 16? Mr. Chairman: No, no. It is 14. In your second set. Mr. Quamina: I see. Much obliged. Mr. Chairman: You found it. You are clear now? Mr. Quamina: I am clear. Mr. Chairman: Thank you so much. Sen. Baksh. Miss Baksh: Good morning, once again. In your submission, you have indicated that the company embarked upon a rebranding strategy, a rebranding exercise, actually. What areas of the company’s operations are the focus of the exercise? Ms. Guy: The company’s rebranding strategy has a number of facets. It, of course, involves first and foremost the product that we have and that product is being defined. It involves a lot of discussions in engaging corporate communications, marketing, advertising and the look and feel of the product is taking shape. That is one aspect of it. The other aspect is that which has to do with employees and how they view the organization and that really is the culture change. We want the employees to view the organization in a particular way and we have defined that. We have come up with a brand which says: “We are the Caribbean. We care. We connect. We create.” And the brand is being built around that theme. So, in a nutshell that is it: the look and feel of the product itself and how we relate with our customers and how we relate with our employees and as a result how they relate with customers. So inside of all of that you would find things like training and retraining and engagement studies and ensuring that the relationships that we build with all our stakeholders reflect that brand.

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Miss Baksh: Great. May I ask what is the cost of the programme—US $2 million, TT $14 million? Ms. Guy: There would be different elements to it and we will have to get the cost of, for example, the advertising which I cannot speak to. There would be the marketing aspect. I can speak to the training. We have embarked on a customer service initiative, and we sent out RFPs and we are presently evaluating those RFPs and we expect that to be in the vicinity of about TT $2 million to TT $3 million and there are also other culture things that we are doing in the organization. We do have a budget for that of about $1million. Thus far, we have spent about $300,000 to $400,000 on that. But there would be other things like advertising and marketing, which I personally cannot speak to. Miss Baksh: I know you spoke of some of the benefits, but are there any quantifiable financial benefits? Ms. Guy: The theory and the thinking is that if you have employees in the organization who believe in the brand and who can demonstrate the brand, that must, of course, redound to how our customers see us and what they think of us, the memories that we create for them—which is part of the brand—and, of course, that is going to ensure loyalty and lead to financial gains. If employees do not make that connection with us then we believe that there would be a gap and the literature tells you that there would be a gap and our experience tells us that there would be a gap. So, engaging employees internally and then having them demonstrate the way we want them to see the organization and demonstrate that to our customers, we believe that that is going to redound to some financial benefit. Of course, it allows us to achieve the goals that we have set ourselves. There is a higher probability of us achieving those goals. Miss Baksh: All right. In your submission you have also indicated, and I quote: Management is in the course of reviewing and updating the 2016 to 2018

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strategic plan to produce a strategic plan for 2017 to 2019. May we have a response by Monday, March 20, 2017? Mr. Quamina: Pardon me, a response to? Miss Baksh: The strategic plan for 2017 to 2019. Mr. Quamina: Okay. I am afraid that is too short a period, Ma'am. Mr. Chairman: The Committee will do a request to facilitate the question. Chairman, you would indicate when you can supply it to us. Mr. Quamina: Much obliged. Mr. Chairman: I would just like to follow up quickly on the Senator’s question regarding the marketing programme, the rebranding programme. Is there anybody who could give us an estimate of what the entire programme—I do not expect that a company will start a programme without some estimate of what the programme is going to cost? Does anyone have a number they could provide us? Ms. Ligoure: Chairman, as the Vice-President of Human Resources indicated, the rebranding process is divided into several areas, and one specific area, with respect to what would be the cosmetic aspect of it and the marketing support, we do have an account assigned to the tune of TT $1million that has been—the drawdown on the TT $1million has been quite limited. We are very mindful of our limited resources, and so far the spend has not exceeded TT $70,000. It has not exceeded that. We are currently about to roll out another aspect of the rebrand and that has to do with representations of the vision, mission and other visuals to support what was a very rigorous process last year. Last year, we would have looked at internal processes. We are looking at the customer service elements, and to speak to the member’s former question regarding quantifiable benefits, we have been monitoring closely the reduction in cost, with respect to output regarding claims and other areas which we have related to improvements in the processes, with respect to baggage and other areas.

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We are well below the industry standard for the KPIs regarding customer service and we are happy to report that to the Committee. Mr. Chairman: Interesting. Is the company—I recognized at the last session, I recall, when I asked a question regarding the website and there was some work going on and I was just trying to skim through the Hansard to find out the response of the Chairman. I know some work was done and you had engaged, I think, a New York-based company to do some work for you. Could you tell us some more about that? Mr. Quamina: I would ask Mr. Quong Sing to respond. Mr. Quong Sing: Through the Vice-Chair, Chairman and committee members, yes we have finished what we would call the phase one prospect of the website we designed and that was purely cosmetic, in terms of the view of it. It was a firm called MBLM who have completed the first phase. Like many other technical aspects of stuff, it is an ongoing process, in terms of various different aspects of the website being added to Caribbean Airlines and with that, various different front-end designs will be added as we go along to ensure that we have the visual and the best customer experience that we can have, in terms of simplicity and ease of access. Mr. Chairman: Was that company MBLM? Mr. Quong Sing: Yes, it was. Mr. Chairman: And what was the cost of that contract? Mr. Quong Sing: That contract for the entire phase was—[Interruption] Mr. Chairman: The entire engagement, yes. Mr. Quong Sing: The entire engagement would be somewhere in the vicinity of about US $200,000 of which about 35 to 38 per cent was being able to be paid in Venezuela bolivars, for which part of that we were not able to take out of the country of Venezuela, because they do have an office in Venezuela. So we able of access some of our funds that are trapped in Venezuela to pay part of that contract.

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Mr. Chairman: Well, I would like to request on behalf of the Committee a report on this entire rebranding exercise—what are the objectives, what is the estimated costing, and the Secretariat would be in touch with you in writing regarding that. Member Karim, you have the floor. Mr. Karim: Thank you very much, Mr. Chairman. Mr. Vice-Chairman, through you, I have a number of questions. Let me start with the first one. With respect to what was just indicated by the VP, HR, that one of the strategic intents of any organization really is for employees to connect with the management, can you indicate to us whether, in the recent past, there has been any conduct of any employee motivation survey or feedback, and when was that survey conducted? And can you give us some highlights, very brief, of that, the results of that survey? In other words, how did the employees see management, and what was the level of motivation and morale? Subsequent to that, I will then ask my other questions. 10.50 a.m. Ms. Guy: An employee engagement survey was conducted in February 2016, and that was an initiative coming out of the whole rebranding exercise, because we wanted to know if we are saying we are a particular type of organization with a particular product, then how do our employees see us and what is the possibility that they would move with us in this direction. So we did a survey conducted by a local firm and the overall—what is called a culture index—meaning the percentage of positive responses that we got, and overall our culture index was 34 per cent, which means that only 34 per cent of the employees in the organization felt that CAL was moving in the right direction and had a high probability of achieving its goals. So we knew that there were issues. We knew that we had to take steps to engage employees and to do certain things in the organization to change that perception. Within that overall culture index you would find things like: how do employees feel about management practices? How do they feel about the way we

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organize work? How do they feel about our strategic direction and strategy and so on? Most of the responses were lower that what would be considered an appropriate benchmark. So, for example, if you look at when surveys of this nature are done in other organizations, you would find something like a 65 per cent positive culture index is desirable. So we knew that we had a lot of work to do and we presented that to the board—to the executive management and to the board—and the board quickly sanctioned some initiatives and we began work on those initiatives and we continue to work on those initiatives even up to today. Just to sum it up, we identified that we needed to have employees understand where the organization is going, get from them the issues that they are concerned about. To do that we set up what is called a change management team and that team came from recommendations by the employees themselves. So we have a team of 25 people and they are the ones who are spearheading the change, identifying the issues in the culture survey and spearheading the change in the organization. Mr. Karim: Okay. I want to make it very clear that my questions are all aimed at obtaining responses for the improvement of the airline and, therefore, from what you would have said there is a situation for concern that 67 per cent or 63 per cent—over 60 per cent of the people do not have the faith and the confidence in a sense that the existing management can take the airline to a sense of profitability. Am I correct to conclude that? Ms. Guy: Yes, that would have been part of the survey. Mr. Karim: And I am sure that the corrective action would have started with the change management. Ms. Guy: That is right. We had a number of recommendations and many of those recommendations are in train or we plan to put them in place. Mr. Karim: Right. Thank you very much. With respect to airline operations, I frequently fly on the national airline, and I wanted to ask this question—I have the

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opportunity now because I may not have been able to get the answer before—in terms of the profitability of the airline and in terms of the competition which the airline faces, currently operating out of Port of Spain: what would be the cost, for example, of a meal in an Economy Class, say you are going to Miami or to JFK? I know you would get a different type of meal maybe if you are leaving POS—you are leaving JFK or MIA. But I just want to get a sense of the cost, because cost is going to be important in terms of the viability. If I may ask—maybe it might look “kinda small”—and no pun intended on the Chairman’s name—but if I can ask a small question, maybe it might have an impact. Apart from the cost of the meal what would be, for example—and the entire plane may use a bag of ice—what does it cost for a bag of ice, for example, that you would purchase to be placed on the aircraft? So if you could give me a sense as to that. The other thing I want to ask, maybe I should allude to the question now too. I would have been seeing—and since the Vice-Chairman raised the issues of numbering with respect to No. 27, it gives us there, CAL’s subsidy per year that was paid. Of the figures that were given and the response, I would like to know what is still outstanding owed by the Tobago House of Assembly in terms of the subsidy to CAL. How much was owed from the time of the subsidy? How much has been paid? And what is the amount outstanding? Thirdly, with respect to—it is also an HR issue, but also an operational issue. Substantial amount of moneys would have been paid to train pilots. I am talking here in the main for the ATR and to a lesser extent the 737. When you expend moneys on training, normally there is a contractual agreement that if you default, if you were to leave the airline, you would have to repay a certain amount of money or pay back whatever it is. Can you tell us how much money was expended? If you can give me a period of time say for the last three years, how much money was spent on training of pilots and for those who would have exited the company, how much

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did you recover out of that? The other question I wanted to ask—so that as I indicated that you get sufficient notice—when we last met here the Chairman who is unavailable today, indicated that you were in the process of rationalizing your fleet in terms of the Boeing 737 800 to the Max—that was an option—or to the Airbus Neo. The question I want to ask is: what did the consultants from Lufthansa recommend? First one. And, secondly, have you agreed on the rationalization of your fleet and, if so, which did you select? Ms. Chase: Good morning members and Chairman. With respect to the question on the THA, I can confirm that out of the $1,380,988, all that amount has been paid. So to date nothing is outstanding by the THA. Mr. Karim: There are other questions I had asked. Mr. Quamina: Member Karim, in relation to your question as to the cost of the meals and the bag of ice, et cetera, we would have to do some research in relation to that, but I would indicate though that it might give you some comfort from the point of view that when we came on to the board, the management, not by our instigation by any stretch of the imagination, but one of the first notes was an analysis that was done of the cost associated with the service of hot meals on certain routes. In actual fact, a survey was done to see whether the passengers what they preferred—whether a sandwich would be sufficient versus a hot meal on certain routes—and the survey actually came back quite positive that passengers were fine with a sandwich on these particular routes and we implemented that decision. That, in fact, would have a cost savings, if I recollect correctly, close to US $1 million to the airline. So a constant analysis is going on as to the provision of meals and the cost associated with that in order to determine how best to provide a quality service while making a savings, but we would certainly get back to you. Mr. Karim: Because I was thinking not only about the item itself, but the cost of

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procuring that item. Mr. Quamina: Certainly. I was actually quite surprised to see the results of the survey suggesting that the passengers would be quite happy with that. So we have, in fact, encouraged more surveys of that nature to take place so that we could meet the customer satisfaction while, in fact, reducing cost. Mr. Chairman: Mr. Quamina, thank you. I want to interject. I think that your response is interesting from more than one perspective. I think that the first question that was asked of the Caribbean Airlines Chairman in the previous hearing was: how do you view the airline? Where would you place Caribbean Airlines? So the question asked by MP Karim is so important, because if you see yourself as a low- cost carrier—I think the response was that you are a hybrid and there are numerous examples of hybrid airlines. The majority of hybrid airlines do not serve meals, any kind of meals. So that the question that I am asking is all linked coming back to the issue of the strategic plan. How does the airline seek to position itself going forward? You have a historical package of things that you have been offering all along. I suppose a lot of your passengers are returned passengers and, perhaps, they are expecting them, but you are running a business and trying to get yourself away from the public purse. So I think that is part of the strategic discussion that has to go on at the airline. What type of airline segment are we targeting? What type of services are we willing to adjust our service package to, to be able to meet our profitability targets? I am not expecting a response. I think that that is part of the discussion that has to take place at the management. So the cost of the meals are interesting, but if you really are a hard-core hybrid airline, the cost of meals is something that pays for itself because people purchase the meals, and you only really have cold snacks and that is where this Committee, your input on something like that would help us to help you. But I want to move on.

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I just want to take one quick question to Ms. Guy. Ms. Guy, the results of your survey are shocking. The survey is shocking. It points to probably almost two- thirds of the staff in some level dissatisfied with the way the company is being run. That is shocking. I think that should have spurred the management to find out more. My obvious question is: is there an issue with the salaries being paid to the workers? Because I would not divulge the exact numbers provided to the Committee, but the wonderful team here at the Parliament has been able to provide us with some comparable information. We got it from the United States Department of Transportation for every airline in the USA from the smallest to the biggest. All I am willing to say is that certainly the pilots, the average salary for the pilots is well within the range of even some of the larger airlines, and Caribbean Airlines is a tiny airline, 12 planes—15 planes I think in total—but the disparity is the front-level staff, the Flight Attendants, in particular, they are a fraction of what obtains at— when I say comparable, I am talking about Virgin America, Frontier, JetBlue. It is a fraction, not to mention some of the other areas. I would never be the one to say that, you know, given the economic constraints that we face now that we should raise salaries, but a lot of the dissatisfaction could be linked to the fact that aside from the pilots, the pilots are the only ones that seem to be in the comparable range probably, in fact, above. If you go to some of the other regional airlines in North America, you could say that the Caribbean Airlines pilots earn way above that when you go to the regional airlines who operate regional jets. So that my question is, in your analysis, did the issue of salaries, compensation, was that an element of the survey? Of the responses, how did that impact the survey? Ms. Guy: It was not a question directly to say are you satisfied with your salary and so on. It was not a direct question, Chairman, but you know the way the surveys are designed is that you ask questions in order to glean that kind of information. So you ask, if you were offered another job with a higher salary would you leave, and you

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look at that answer to determine how people feel about salaries. But survey or not, I do accept that the salary levels in CAL are not at the market level. We are challenged as an organization. Yes we are. The ranges have been in place since 2010 except for pilots. Pilots renegotiated their contracts in 2014 and those salaries are in place. We have a collective agreement with them. It goes up to 2018, but we are challenged with the other categories. We have not changed our pay grades since 2010, but we have implemented a robust performance management and evaluation system, which allows employees since 2015 to get a merit increase based on performance, and that was the first increase that the staff, other than pilots, got since 2010, but it is still within the existing range which is below market. Mr. Chairman: I would like to suggest to you, Ms. Guy and to the CEO and to the Acting Vice-Chairman, that the issue of you having challenges with the staff understanding where the company is going, how the company is being run and then you have effectively your frontline staff, the staff who the members of the public interact with being paid severely below the market, I want to suggest to you that that may be part of the problem, that the people who are at the front, the face of the company—when you go to the airport or you go to the office, the people who the average member of the public runs into—the management numbers are in line. The other concern to me, when I compare with other comparable airlines—and I would direct anyone to the United States Department of Transportation website, they break down the salaries and the list for every airline that operates in the USA and there are details on what they pay pilots, co-pilots, flight attendants, mechanics. The other concern for me would be the numbers for the aircraft maintenance crew in Caribbean Airlines is also significantly below what I would consider the market. For me, the market is an airline Spirit Airlines or Allegiant. While those airlines are small airlines they are large compared to us, because Allegiant is about

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70 planes. Caribbean Airlines is a small airline. So I think that some work needs to be done—some deeper analysis about understanding perhaps that the issue of the frontline staff, the staff who interact with citizens or the traveling public—the flight attendants, your cabin crew, the rest of your service staff at the airport, perhaps there may be some rationale for looking at trying to revise those numbers. But I have— and I know member Karim has requested to make sure you respond to his questions—one question I want to ask. On the basis of this analysis, it suggests to me that significant portions of Caribbean Airlines employees are being paid below market. I do not want to say underpaid, but they are being paid below the market. That is what it suggests. The question, the obvious issue that arises is if you are paying below market, you are still losing money. I would have thought that savings on salaries and wages would have translated to the bottom line and somehow, somewhere or the other, the company is still losing money. When I looked at your numbers in one of your documents, your company indicated that one of the highest problems in the company is something called overheads and non-operating costs which is 14 per cent of revenue. Overheads and non-operating costs seem to be something that you need to look at. I would like whoever is in charge of finance to help us to understand what is overheads and non-operating costs to the point that it is 14 per cent of your revenue. If you compare that with salaries and wages for all of your employees, is 17 per cent of your revenue. So that somewhere along the line that line item in your budget in the numbers that we have been provided, that number seems very large. Could someone give us a response to help us what comprises this number and why is this number so high in relation to the revenue? Ms. Chase: Mr. Chairman, the overheads comprise of your salaries basically and your administration costs—your salaries in general. Okay. Also your non-operating costs would include your interest on your loans, because as you would know we

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have loans, your forex exchange and inside there we would also have some cost that we incurred for the returning of the 767. Mr. Chairman: I will not challenge you on that on air, because the way you had broken it down in your document is different from that, but I would leave that for now. I would detail what I want answered in writing. MP Karim, I think you needed to get a response from Ms. Guy regarding the question you had on training. Ms. Guy: Can you remind me which one was that please? Mr. Karim: What I had indicated was that there is clear evidence that 67 per cent of the employees surveyed did not show the confidence in the management to move the airline forward and I think you answered saying that you were in to a culture change management approach. But since the Chairman asked me to focus on another HR matter, I had really asked two additional questions, one is with respect to the fleet rationalization and there was another one that I had asked for— Hon. Members: Pilots. Mr. Karim: Pilots. Whether in terms of the moneys expended to train the pilots, those who would have gone on to “greener pastures” what percentage of the moneys they have not paid and therefore what liability we still have from those who would have gone to other places. Capt. Singh: Chairman, we recover the cost of training for pilots over a 24-month period. The pilots have within their contracts to serve the 24 months to recover the cost or make up the payment if they desire to leave. There have been pilots who left before the 24-month period and we recovered the cost of that training from those pilots. Most of the pilots who leave, leave after the 24-month period. Mr. Karim: The other question was with the fleet rationalization decision. Based on the Chairman’s indication at the last meeting, I was asking whether Lufthansa, the report had indicated where you should be pointing to in terms of your fleet rationalization and whether a decision has been made and whether you are going

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with the Boeing Max or whether you are going with the ATR airbus. Mr. Quamina: The Lufthansa report made recommendations with respect to the fleet rationalization based to some extent on the price, the energy prices at the particular time. They have since sent a supplemental response where they have indicated at present the fleet is adequate in terms of returning the airline to a profit. But insofar as our fleet rationalization exercise is concerned that is not yet complete insofar as a decision as to where we are going with the jets or with the regional aircraft as well. We are still looking at that. We have two consultants who are looking at it—local consultants who are looking at conducting the exercise and who would make recommendations we expect no later than by the end of this year insofar as that aspect is concerned. Mr. Chairman: Thank you very much. Brig. Antoine. Brig. Antoine: Good morning. I have an ageing mother-in-law who lives in Tobago—she is in her 80s—and most of the time attempts to travel to Tobago, even though you have confirmed bookings, my family members are unable to get the day they want to travel. So they have a policy of going on standby—and going on standby sometimes the day that you have to travel may be late at night or the following day—customers tend to spend from as much as six to eight hours waiting to get on a flight standby. We have a period approaching us: Easter vacation, there will be Jazz Festival in Tobago coming up and there will be the Heritage Festival. My question is: what contingency plan does the airline have to deal with excess capacity of citizens who need to travel to Tobago? We have use of the electronic media, there is social media to keep customers informed of the situation, but I think it is difficult for a citizen to really spend eight hours just to get to Tobago even though they may have a confirmed booking the following day or they may have a confirmed booking in the evening to get on standby without any kind of information to the traveling public

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that look, in six hours or in four hours we would put on an additional flight to get you to your destination. What contingency plan does the Caribbean Airlines have to deal with customers who need to get to Tobago sometimes for an emergency? Mr. Quamina: Member, I would ask Mr. Quong Sing to respond to you. Mr. Quong Sing: Through the Vice-Chair, Chairman of the Committee, member of the Committee, Caribbean Airlines has been tracking the air bridge demands for quite sometimes, and we have developed a heat map and we work very closely with our stakeholders to identify areas of peak demand and where they may be a little bit weaker. Specifically to Easter and Jazz, we would have identified dense areas and we would add capacity within the constraints that we have how best we can. Operationally as well, on the day, we do look at flights where we have excess demand and try to put on additional services as quickly as we can. We have identified that there has been some challenges in terms of communication, and we have made significant efforts with the frontline staff to ensure that we are able to notify the public as to what is going on, on an ongoing basis, on the day of operation. Brig. Antoine: Do you have plans to use social media? Do you have plans to use the electronic media so that people do not have to go to the airport but they can travel at a later time as the case might be? What plans do you have to deal with the public in terms of customer service, in dealing with their customers who need to go between Trinidad and Tobago on a regular basis? Mr. Quong Sing: We are working towards, as I say, all the different avenues of communication and as you rightly say, much of it is done on doing pre-emptive—if you want to call it that—services in terms of what we have to offer. Standbys, as you would appreciate, tend to build very quickly. So in terms of being able to facilitate across the network in terms of social media prior to actually a build-up is very difficult. But we are looking at avenues: how do we communicate among our frontline teams as quickly as possible to see how we can in fact move that across the

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various social media and operationally how quickly we can in fact put in place aircraft and crew. As you would appreciate, it is a challenge in terms of it takes a certain amount of time to be able to effect an aircraft availability. Easter is a peak across all the different regions and we intend to optimize all of our equipment. It is not that we just have aircraft sitting. So it is where we have gaps and then where we are able to facilitate through crew operations to be able to facilitate. Mr. Chairman: Can I ask a follow up on the Brigadier’s question? I have seen in the data that you have provided that the number of passengers ferried between Trinidad and Tobago by Caribbean Airlines is increasing every year. I think last year it got close to a million, a little over a million from 900,000-something like that. I have listened to your response, but there seems to be a continuous excess of demand above supply. So, there must be some strategy that the company is recognizing that perhaps you need to increase the available supply, not only at the peak periods, but generally. Because I did an exercise over the weekend trying to book a flight over the Great Race weekend from today to now you cannot get a seat. We are in March. I just went online, I did not call and you cannot get a seat. So that I understand that you have limited equipment, but I am thinking, looking at the data that you have showing the increases in the number of passengers being ferried across, there should be some plan in mind to say, listen, we need to probably get another aircraft, get a larger aircraft. I want to understand what your thinking is because this is a perennial problem with the airline—getting to Tobago when you want to go to Tobago and even worse, leaving Tobago when you want to leave Tobago. Even Members of Parliament here, those who have to come from Tobago always complain about the struggles waiting hours upon hours waiting to get a flight and you are not getting the flight. So I want to understand what the plan is having the data you have. You have the data, you presented it here showing the increase. Every year it is 100,000 or 150,000 more. It

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is clear that the current configuration, or the current set of aircraft cannot accommodate that load going forward. What is the plan? Mr. Quamina: Mr. Chairman, my understanding is that the equipment is not necessarily the issue. The issue really is the question of the bookings, the booking system which is in place which is allowing people to book flights, do not turn up, turn up whenever they wish, to get into the standby. I think that my understanding is that it is not an equipment issue, it is a booking issue. Now, insofar as dealing with that is concerned, I met at Caribbean Airlines a very advanced booking system that has recently been put in place, and that booking system seems to have the capacity to resolve this issue but it has not been implemented to its full extent. We are looking at that very closely in order to implement that to prevent the abuse in terms of the booking. I think that is a major issue. As well as on the last occasion we spoke to the question of the change fees, et cetera, and at the board level, Mr. Chairman, certainly appreciate that there is that problem but we feel quite strongly that it has to do not with an equipment issue but with the booking system that is in place and the abuses that it permits and we are looking at that very closely to bring an end to that. Mr. Chairman: Well, Mr. Chairman, I thank you for your response but that does not necessarily give immediate comfort to persons trying to fly to Tobago. If you are aware of this issue, I am sure that this booking issue did not arise last week. I suspect that this issue that you have indicated to the Committee, a booking system issue where people are holding bookings and then randomly turning up or not turning up is something that is affecting your ability to provide a reliable service to passengers. So I would have thought that you would have at least raised that issue to the board level or taken it to your line Ministry. I recall at the last session we did enquire of the line Ministry regarding that. I think I was advised by the Chairman at the last meeting that there was certain proposals

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made to the line Ministry regarding how to treat with some of those issues, because it is affecting your ability just as the good Brigadier has indicated. That you want to go to Tobago, you purchase a ticket and you expect to get on a flight. The problem I have as a citizen of Trinidad and Tobago, I sat yesterday afternoon, I could have booked a flight to go to Toronto, New York—wherever on your route—I could have booked a flight to fly this morning to New York or this afternoon to Toronto, no problem. Trying to book a flight in August to go to Tobago is a problem. So that that booking issue really needs something to be done urgently and addressed urgently. 11.20 a.m. Mr. Chairman: I will now ask Mr. Mark to take the floor. Mr. Mark: Thank you very much, Mr. Chairman. You know, Mr. Chairman, it has been said that where workers are unionized and organized they enjoy a higher standard of living and a better quality of life. I want to ask the Chairman, through him, whether Mr. Quamina could tell us, are the workers—forget the pilots, they have their organization; they are unionized as far as I am aware or they have some kind of union representation—but the bulk of your working people in Caribbean Airlines, are they unionized? Mr. Quamina: No. Mr. Mark: I think, Mr. Chairman, there lies the problem in terms of the very negative reaction that you have received—Ms.Guy would have received in terms of her survey—because as the Chairman said, when he looked at the salary scale of your employees, it does leave a lot to be desired. So that is an area that I guess they would have to deal with themselves. I wanted to ask, Mr. Chairman, whether the company has embarked on a customer/passenger engagement survey, as you have embarked on an employee engagement survey, to get a feel from your customers how they are viewing your

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service and the quality of the service that they have been receiving from Caribbean Airlines. Is there such a survey as you seek to brand CAL? Ms. Ligoure: Mr. Mark, to your question, there are a number of surveys that we have undertaken regarding the customer service experience, because at various times, for example, we would be looking at different things. So there was, for instance, a survey undertaken on the domestic air bridge to get a sense of how persons felt, what they needed, their preferred times of travel and a number of other bits of information that we had. The marketing department consistently and periodically undertakes surveys to engage our customers in different areas to find out where and how we can improve our service offering, and I am happy to say to the Committee—I will preface this by saying—while there is always room for improvement, we have been using information coming out of the surveys to add and enhance the overall passenger experience and the overall customer service experience. I will give an example that may appear simple, but it was based on feedback from the customers. After Carnival there is usually a mass exodus of persons with backpacks and headpieces and so on, and the simple implementation of providing a courtesy carry bag for head pieces was very, very well received by the customers. We also at the July/August peak of last year introduced a concierge service at Piarco International, and this was to improve the movement of the lines, to get persons who may be running late for flights moved through the system quickly. And these are some small examples with high impact. Again, I say there is room for improvement, but to your question, yes we do undertake surveys in an effort to continuously improve what we provide to the customers. Mr. Mark: I know that Caribbean Airlines—was it sometime last year?— introduced a system like I think American Airlines, where in the past when one travelled on Caribbean Airlines I think they were entitled to two pieces. Even if you

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go economy, I think you were entitled to two pieces, but I think that you have changed that. I think that you said it is now one, and if you want to go with another one you pay. Then I was surprised to learn recently that your competitor, Copa, a lot of your customers have switched because Copa has maintained two pieces, Mr. Chairman, at economy level. So that is why I was asking the question through the Chair, whether you have conducted a passenger engagement survey to determine how your customers, how passengers are responding to your service. If you could give us a percentage as how Ms.Guy did in terms of employees and how they are seeing the management and the future of the company. They do not see much hope under the management of the organization; 60 per cent totally dissatisfied. So I wanted to find out from you, Mr.Quamina, whether a similar survey would have been conducted as it relates to your passenger engagement, your customer engagement, and a percentage in terms of customer satisfaction. Ms. Ligoure: To the question, Mr. Mark, well there are a number of surveys as I mentioned previously, but if you would be so kind as to indulge us I would have to get that information, because I prefer to put accurate information into the public domain as opposed to trying to recall. Mr. Mark: Yes, that is fine. I wanted to ask, Mr. Chairman, on this question of subsidy, I see where—I do not know if I am seeing right, but you have to correct me—could you tell us again what is the total subsidy paid by the Tobago House of Assembly to CAL on an annual basis in order to facilitate passengers out of Tobago to New York and other destination points, or is it just New York? Could you tell us if this figure I am seeing here, that you have received, is it US $796,067 from the THA, and a further US $590,000? What is the total subsidy that the THA pays to CAL on an annual basis? Is it over US $1 million?

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Ms. Chase: It is $1.3 million. Mr. Mark: Million US? Ms. Chase: Yes. Mr. Mark: Could you further tell us how many passengers benefit from this subsidy, and could you tell us how this subsidy works? I am not too clear on how this subsidy works. What is this subsidy for? Could you explain to this Committee how this works and why is the THA spending US $1.3 million, taxpayers’ dollars to subsidize CAL? Explain to us. Mr. Quamina: Mr. Chairman, before I ask Mr.Quong Sing to respond in particular, there is an appendix 7 at page 18 which has an extract from the memorandum, so you would see that is the formula as to how it works. I will ask Mr.Quong Sing— Mr. Mark: I am not dealing with the formula between TrinidadandTobago. I know that the Government of TrinidadandTobago over the last 50 years, 40 years, they have been underwriting passengers travelling to Tobago, to and from Tobago. Mr. Quamina: This is Tobago to JFK, appendix 7. Anyway, I would let Mr. Quong Sing—but what it says is that: The THA shall guarantee and pay to Caribbean Airlines the difference between the cost of its UZ scheduled flight from Port of Spain to JFK and the additional cost of the flight from Tobago to JFK. The difference is estimated at US $8,207 per rotation or US $4,103.50 per flight one way. So that is how it is calculated. I will let Mr. Quong Sing take it from there. Mr. Quong Sing: Through the Vice-Chair, Chairman and members of the Committee, just to correct one item here. It is not US $1.3 million per year. That has been actually 1.3 over a period of 2011 to 2016 total. On average it runs anywhere from $120,000 to just over $300,000 a year on the route. It was an MOU that was enter into late 2010 to 2016 to facilitate a drive to have the northeast USA traffic into Tobago on leisure on a nonstop basis. I am not sure if that answers your

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question. Mr. Mark: I wanted to find out how many passengers would benefit from this subsidy on an annual basis. If you say the average is about $300,000 and it is to facilitate the tourism drive, what numbers are involved? You should be able to indicate to us what the numbers are over a yearly period. Mr. Quong Sing: If I may say, the subsidy is not per se to the passenger, because in part of the agreement talks to if we board more than 70 passengers on the flight to Tobago, we waive the subsidy. So it is not per se a subsidy to the passenger, but more to mitigate some of the risks to the organization. But on average we fly a load factor of around 65 per cent on that flight, or about 60 people between Tobago and New York on that leg. The challenge with the flight is that we still have some originating traffic which comes out of North America, which is somewhere between 35 to 37 people boarding out of the US gateway of New York into Tobago on an average per flight. Mr. Mark: May I ask a final question, Mr. Chairman. Could you share with us Mr. Quamina or the Acting CEO, what are some of the current challenges affecting Caribbean Airlines’ profitability? What would you describe and outline as some of your major challenges, and how can this Committee assist to improve your viability and profitability as an airline? Mr. Quamina: I think, Mr. Chairman, if I were to identify, within the last month or so it became quite apparent to me that our load on the routes that we have is quite impressive. We do carry a fair amount of load going back and forth on our routes. What it really needs is a rationalization of the costs associated with that. I do not think that the airline has as yet narrowed in on an ability to properly allocate cost per route and that is in fact—I think that once we get that in hand, I think that it will return to profitability. The airline is on line to return to profitability I think within the next 12 to 24

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months. But the fact about it is that I think a proper cost allocation exercise is what is required in the airline; that is one. I think also to answer the question about the salaries, et cetera, we are also on the brink of doing a proper manpower analysis which would determine the proper allocation of staff that is required in order to operate the airline. As the Chairman said, if we are going on this hybrid, do we have the requisite number of staff required in order to operate an airline of that nature. With those two aspects, I am quite confident that the airline can return to at least being self-sustainable. Mr. Mark: What I was trying to get from you Mr.Quamina is that apart from the cost factor that you have outlined, to get Caribbean Airlines back into a zone of profitability, what factors, what areas do you consider to be very fundamental for the realization of that goal and how can this Committee assist you to realize that objective? I am trying to determine from your response whether this Committee can be of any assistance to the Caribbean Airlines as a state entity, to make it and to create that level of viability and profitability within the shortest possible time, and to ensure sustainability of that profitability, and therefore what is our role? What recommendations would you want to advance to the Chairman and to this Committee as it relates to providing assistance to Caribbean Airlines to for it to become, not only profitable, but there must be sustainability in that profitability over the medium and long-term. Mr. Quamina: I heard you, Mr. Mark, and I will maintain that it is a question of a very careful analysis of the cost that the airline is currently undertaking in relation to running those routes, and a rationalization of those costs, would certainly propel us in the direction in which you wish. I am not quite certain with the information that the Committee might have, it could make the recommendations, but certainly that is the area that has to be focused on. Mr. Chairman: Thank you very much, Mr. Vice-Chairman, and that is actually

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some of the information that the Committee has requested which was not supplied also, but I will deal with that also. Dr. Henry: Morning everyone. I want to start with something that has bothered me since the last occasion. I asked the question on that occasion about the wet leasing of the cargo planes, and I have the Hansard here in terms of what the response was to my question concerning the profitability of the cargo operations. I said: why are we wet leasing a cargo plane when we have pilots trained to fly 767s that were discontinued in terms of the London route, and some reference was made to the planes being cargo planes and there was some implication that the pilots could not fly a cargo plane. I was subsequently very annoyed to learn that is simply not so. So if that is not the reason, my question still stands, why are we wet leasing a cargo plane? In fact, some of the pilots were quite annoyed at the implication that they would be able to fly a commercial plane and not fly a cargo plane. It is the same plane. Capt. Singh: The 767s which we had in service from 2012 to early 2016 were configured as passenger aircraft, would have required significant changes in terms of loading and stresses in the internal. That would have been required an investment. The decision to discontinue the use of the 767 came because of the cessation of the London route. So those aircraft were returned. The model that we have for the cargo operation is one that includes a wet lease. We could revisit, have a look, but then it would require bringing in new aircraft to Caribbean Airlines which at a time we were looking at reducing costs, would have incurred greater cost. Dr. Henry: I understand that because the context of my question at the time was that the dry lease would cut operational cost. If it was just a matter of changing the internal make up of the plane to store cargo as opposed to taking out the seats for passengers, why did we not go that way in the first place with the cargo? I also

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would like to know to what extent. We were not provided with any numbers then, I do not know if it was submitted to the Committee after in terms of how profitable the baggage handling operation is in the first place. We were told that it was profitable, but could we get some idea as to the cargo handling? Capt. Singh: Offhand I do not have the numbers for cargo, but we can certainly provide the figures on the cargo operations. The cargo or the freighter operation was based on a wet lease model. We did not look at a dry lease model because that is the plan we had for freight operations and operations out of North America to the Caribbean. Dr. Henry: So I hear what are saying, but I am just for the record saying that it would make sense that the dry lease would be less expensive to operate. At least we can agree on that? Capt. Singh: We have not done a comparison of dry lease operation versus a wet lease operation, so it is difficult to say today whether one would have been better than the other. Dr. Henry: We know that the London route was discontinued and we accept that, but we had the pilots trained intercepting to fly the 767s, and that was essentially the crux of my question, as to why we could not transfer them and fly the cargo planes. But I will move on now. But sticking to 767s, was CAL still incurring payments on this wet lease arrangement with these 767s into the end of 2016 or into this year? Capt. Singh: I just want a clarification on the wet lease. Which wet lease is that? Dr. Henry: This one, I am talking about the passenger one, the one that was to go on the London route. I am off the cargo for now. Capt. Singh: So you are speaking of the 767 we had on dry lease. It was a dry lease. We operated with our crews; we are still incurring payments on the 767. That goes until August of 2017. Dr. Henry: So we discontinued the route and we are still paying? I am talking

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about the 767s, the planes that used to go to London. Capt. Singh: The leases were due to expire in 2017. We returned the aircraft but given that we were returning the aircraft, we had to negotiate with the lessors and that is the agreement we have with the lessors. Dr. Henry: So we are still paying for the planes all now, while the planes are flying for another airline somewhere? Capt. Singh: We are paying a part of that lease. Dr. Henry: Are these planes the ones flying between Guyana and Toronto? Are those the same planes? Mr. Carrington: Chair and member, as we know, those aircraft went to the Air Canada route. The redelivery cost for an aircraft is quite substantial, so we got a significant reduction on the actual cost to redeliver the aircraft early, but we had to continue paying a portion of the lease until August of this year. Dr. Henry: Could we get some idea of the cost of this? I was made to believe it is quite substantial. Mr. Carrington: It is $135,000 per aircraft per month. Dr. Henry: Per month, per aircraft, so two times—so US $270,000 per month approximately. My next question, off the topic of the 767s now. In terms of the move from Nicolas Towers to the Government Campus, what kind of savings might accrue to the company in terms of that move? Mr. Quong Sing: The decision at the time for us to move was a number of conditions we looked at. One, we were fast running out of space in terms of the crowds that we were expecting in the offices. Two, we did not have any space to expand. It meant separate shops as they were, and therefore dividing the offices into a number of units would have given us some challenges in terms of staffing as well as security. Secondly, the cost in terms of economics, was quite a significant savings

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in the per square foot cost, it is somewhere in the vicinity of 50 per cent savings in terms of our move to the Parkade building. We will be doubling the floor space at half the unit cost. Dr. Henry: So it is a significant savings for the company? Mr. Quong Sing: Yes, it would be. Dr. Henry: My third area of questioning: is CAL partnering with Uber in any way currently? Mr. Quamina: No, there is no partnering with Uber. Dr. Henry: I was led to believe that there is some kind of partnership with Caribbean Airlines and Uber taking place. Mr. Quong Sing: There was a preliminary discussion initially with Uber when they first considered to come in. However because they were not the prerequisite, I would say formulas, in terms of taxation, et cetera, and was not approved, as a state enterprise we thought it best not to go in until the actual facilitations and so forth were in fact in place at the time. So now that it is, I would say from what I understand, formally being done, we will look at it again. Dr. Henry: When you say formally has been done, has the Minister approved the operations of Uber? Mr. Quong Sing: I am not familiar with it. Dr. Henry: Because that was my follow-up question, that if you were partnering with Uber, was the legal issue of Uber’s operations clarified in this country as yet? We know they are operating. Mr. Quong Sing: That is why we are taking a lot of care. We have not, as I said, partnered. There was an initial discussion where they had approached us and we thought it best to hold. As a state enterprise, we have a responsibility to ensure that we comply with various different aspects and laws within the country. Dr. Henry: I would stop there for now.

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Mr. Chairman: Thank you very much, Dr. Henry. I would like to ask a question of the Civil Aviation Authority who have representatives here today. I would like to find out from the Civil Aviation Authority, what is your assessment of the performance of Caribbean Airlines in terms of all the areas under your purview under the Act? Could you help us to give us your assessment of how Caribbean Airlines is performing? Capt. Lawrence: Chairman, I will ask the Director General to answer. Mr. Regis: The performance of Caribbean Airlines—Caribbean Airlines continues to satisfy the requirements of the Act and the regulations, as far as we are concerned, because we do our regular surveillance. Mr. Chairman: I want to direct the attention of the representatives of the Civil Aviation Authority to a news story found in the Newsday dated, Thursday December21, 2015, entitled, “CAL’s ATR woes”. And there is actually a story also January24, 2017, “Troubled flight from CAL”. I would like to find out, what is the process that the Civil Aviation Authority uses when there is a report of an incident on an aircraft in TrinidadandTobago air space? 11.50 a.m. Mr. Regis: Whenever there is an incident in Trinidad and Tobago airspace, the operator is required by regulation to submit what we call a mandatory occurrence report. Once the report is received an investigation is conducted, and if they are necessary to provide corrective actions for the airline, that is done. Mr. Chairman: Would the Civil Aviation Authority have a view regarding any abnormal occurrences of incidents over the past couple of years? Mr. Regis: Could you clarify? Mr. Chairman: Okay, you are mandated for managing civil aviation and tracking, and investigating and reporting on all incidents; over the years of which you have been doing this, has there been any noticeable increase over the past few years?

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Mr. Regis: Not really. Mr. Chairman: And that goes to the crux of my question, because in the research for the coming year we could not find any publicly available information on aircraft incidents, and I saw in your response to the questions posed by the Committee that you are not required to put out any public information, but I would like to suggest that as the body with responsibility for civil aviation that information regarding incidents on aircraft in Trinidad and Tobago airspace should be public information. I think members of the public have a right to know, and that if in the event that— and I want to be clear, the Committee did this research, we checked with several other civil aviation organizations around the world, and it is interesting the way in which it is treated, and when we did our information— So, for instance, the Transportation Safety Board of Canada, you can go to the website and download a spreadsheet with every aircraft incident from 2004 to yesterday on the front page of their website. I go to the Australian Transport Safety Bureau, Australia Civil Aviation Safety Authority, and the latest investigation report is at the front of the website. You have a listing of all of the incidents as of yesterday, and it is minor incidents, you know, lack of separation, loss of separation between aircraft, a near miss on the tarmac, but I think that is information that the public needs to know, and I want to share with the public, and I want to share with you, the UK Civil Aviation Authority follows the European directives on this matter, and here is the statement they use to describe why they do it: The purpose of occurrence reporting— And I want to quote: —is to improve aviation safety by ensuring that relevant safety information relating to civil aviation is reported, collected, stored, protected, exchanged and disseminated. It is not about attributing blame or liability. So, I think that I understand, I have looked at the regulation regarding civil

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aviation; I do not think there is anything that precludes the Civil Aviation Authority from putting out a report every so often to let the travelling public be aware that airline X had an incident on this date, we have investigated the matter, and we are happy—whatever needs to come out of it. But I think that in the situation where people see things in the newspaper, and then the body with the responsibility for regulating the industry, where you can find no publicly available information, I think that is something that needs to be addressed and addressed urgently. So, I would like to have your thought or comment on that. Mr. Regis: Mr. Chairman, the Authority would take into consideration your comments and would acknowledge. Mr. Chairman: Thank you very much, I appreciate your very direct response. I think I go now to MP Leonce. Mr. Leonce: Thanks, Chair. Just going back on member Henry’s questions, the cost incurred for stopping the UK route, have you evaluated that decision, and if you all were to make a decision now based on all the information that you have, based on the cost and benefits to clients, would you still make the decision to stop the route, or would there maybe be an alternative decision? Mr. Quamina: Member, under the board, under Chairman Lok Jack, the decision was made to bring the route to an end, and that was made on a significant amount of analysis. The route was reintroduced, I think, under Chairman Nicholas, and it continued to be loss-making route, and it continued to be significantly so. So, the fact about it is, I think, that a route from Port of Spain to London is simply not a sustainable route for the airline. By any stretch of the imagination the losses are quite significant. Mr. Leonce: Okay, thank you, Chair. My question, basically, is putting myself as an employee behind the counter of CAL during the Easter period or a high-peak season. I am pleased to hear the review of bookings, the system to eliminate

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overbooking, but currently, and most of us would have experienced some form of discomfort that will lead to some upset as a passenger waiting to traverse the air bridge, what steps—because I am looking at your strat plan—have you put in place, one, for the employee in terms of their safety and so on that there is a security plan for the behind-the-counter safety on your strat plan? And, two, in terms of—while the process is improving with bookings and the reliability of the aircraft on the air bridge, what steps for improved customer service to the aggrieved customer, whether it be from Tobago to Trinidad or from Trinidad to Tobago? Capt. Singh: With regard to the air bridge we have looked at travel and demand year over year. We have also looked at events that would attract travel between Trinidad and Tobago. From that we have developed a heat map. On a weekend by weekend basis and a month by month basis, and it is based on that we have built our schedule for the air bridge. Additionally, operationally, we add flights to meet that demand. There are times when the standby passengers show up in the morning, say, and it takes some time to mobilize aircraft and crew. So, it does take some time to recapture that. We are moving towards communicating with standby passengers, and I have seen it taking place where we let them know the time with which they can expect to travel. And, that is basically the system we have put in place for the air bridge. Mr. Leonce: And that is great, but my question is, currently, because of the quick build-up of standby passengers there is going to be some deficiency in the system, so there would be aggrieved passengers, which is what we are experiencing now, what I am asking is, while you are improving your systems with respect to how you book, and being able to change bookings to meet the demands, what are you doing to, one, secure your employees that are dealing with these aggrieved passengers? And two, some level of customer service, what are you doing to mitigate against that?

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Ms. Ligoure: In respect to the circumstances regarding the—well, mitigating against the customer service issues. I am trying to give you a short answer to the issues surrounding the air bridge. One, the longer answer is, there is a task force that is charged to closely manage the operations of the air bridge. The task force has a system we use, developed around a heat map, and the heat map looks at events, high- demand events in Tobago, and we deploy the necessary resources that are required to manage the operations of the air bridge, particularly at high-traffic times in order to eliminate some of the stresses on the system. What we are currently doing is reviewing what we offer the customers in respect of delays on the air bridge so that it is more in alignment with the international standards, because it is the same sort of discomfort that would be experienced. In addition to that we are working closely with our handlers. Just, I think it was about a week and a half ago we met with our handlers in Tobago to work and collaborate more closely in terms of lifting the service standard so that it is more positively consistent. But, by virtue of the sheer numbers on the air bridge you would find that there are times when the service offering would lapse. And, again, I say all this to say that we are continuously improving what we offer, how we offer it, and bearing in mind that we want to minimize passenger inconvenience. We do have some challenges in respect of the air bridge regarding space. Space is an issue by way of infrastructure, both at ANR international and at Piarco international. So, for example, if we have a jet service and an ATR departing around the same time, or two ATRs, you find that there is general congestion in the domestic area, which is inconvenient to the customers, and we try to manage that as best as we are able. So, to answer the question, it is a continuous programme. We are due to have a meeting of the task force within the next two weeks to reconvene that task force, so that we can put our collective heads together to see how we can continue this general improvement of the management of the air bridge.

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Mr. Quamina: Member Leonce, if I could just add to say that within—since my presence on the board—within the last month or so, the board has received some direct complaints by way of letters from members of the public, and in fact from at least three of your colleagues about treatment at the counter while trying to get to Tobago, and the board is actively looking at the relationship between the counter staff and the customers, especially, I think, in circumstances where people are trying to get on flights and the manner in which they are being treated. So, we are actively looking at that in terms to improve that aspect of the service. Mr. Leonce: And just to talk about the streamlining of the security at the airport stations, what was that? What stimulated that to be an item for the strat plan? Mr. Quamina: MP, we will have to respond to you about that aspect in writing. Mr. Leonce: Okay, thank you very much. Mr. Chairman: Thank you very much, MP Leonce. I would now throw to MP Karim. Mr. Karim: Thank you very much, Mr. Chairman. On the last occasion mention was made about a fuel dashboard to effect some measure of savings, might you be able to tell us something about this fuel dashboard? For example, when was it procured? At what cost was it procured? And whether there was a different date from when it was procured as opposed to when it was effectively being used? And with respect to that same fuel dashboard, how much money has been saved as a result of the implementation of this cost-saving measure, and whether you are getting proper reports arising out of the implementation of this mechanism? Capt. Singh: The fuel dashboard was costing somewhere around US $60,000 to acquire, and prior to acquiring the fuel dashboard, Caribbean Airlines flight operations also identified areas where there may be cost savings. We acquired the fuel dashboard, there was data and information that had to be processed by the provider in order to start providing us with guidance, with areas where we could

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further save. We provided that data—so, acquired at one date and then output from the dashboard came at a later date. We continued to provide information; it has to be continuous information. For example, we may identify an aircraft that may be burning more fuel, and therefore we need to ask maintenance and engineering to look at that aircraft and understand why it is burning more fuel. We have realized significant savings in terms of volume year over year using the cost initiative that we have put in in-flight operation and using the guidance of the fuel dashboard. Mr. Karim: But just to conclude in terms of the question, when was it specifically—if you can give me a period of time. In other words, when you bought it, or when you got it, did you implement it immediately or was there a period of lag when you implemented it? You see, what I am getting at is that you would have invested US $60,000, just over a quarter million dollars, but what is it that you did? The savings of cost, the intention was to have the cost savings, but what happened, was it effective on purchasing, or was there a period of time within which it was not utilized? Capt. Singh: Data had to be provided through the provider for them to analyze what was taking place with CAL. So, they looked at aircraft on the ground, they looked at what we are doing in taxiing the aircraft to take off, what we did in climb, what we did in cruise, so they analyzed the entire flight for us. So, it took some time before they could provide us with the information. With regard to your question, I will have to check what period elapsed between paying for the dashboard and actually getting data from the provider Mr. Karim: My other question has to do with the pilots. If we can get a sense as to, for the last two hirings, because again, I am sure there are people who are sitting down here who would recognize that we had instituted an aviation campus, not that we were training pilots, but the intention would have been. But, for the last two

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hirings of pilots, would you be able to tell us how many vacant positions you wanted to fill? How many applicants would have applied for those positions? But the key to this is that I wanted to find out is, what was the failure or success rate of those who would have applied? In other words, if you had six vacancies and you had hundreds of persons applying, how many of those hundreds would have been successful or would have failed? What is the failure rate or the success rate? And, in addition to that you would have had to assess them to determine, by some assessment committee, what was the cost of that assessment to the airline? And in some cases where people have not succeeded they may be asked to pay, but what was the cost? So, number one, for the last two hirings, how many positions, how many applicants? What was the success rate or the failure rate, and what was the assessment cost of that exercise? Ms. Guy: Mr. Karim, you are asking about the last two hirings, meaning last two groups of pilots that we took on. Okay, the way we do pilot recruitment and selection is that at the point in time that we believe we need resources, we will do an analysis of the manpower. We look at that in the context of the schedule and we would see what numbers we need. When we recruit and select pilots it is an expensive process, so we create an order of merit list. So if we determine that we needed six pilots we will go through a process and create an order of merit list which would give us perhaps about 20 or 25 suitable persons and then we will offer, if we need six, the first six, and we would have maintained that list for three years. So the last two hirings took place in—2015, Jags? Capt. Singh: 2016. Ms. Guy: 2016. There was one, well before that, 2013 because my period was 2014 to 2016 and there was one, and then there was one before that, before I came in. So, those would have been the last two hirings. I could speak more specifically to the last one. We did create an order of merit list and persons were recruited from that

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list, having gone through a process, a recruitment and selection process, and deemed suitable to come into the organization to be trained as pilot. That list expired in 2016, and then we went through the process again. Mr. Karim: I just wanted to get a sense as to, first of all the cost of that assessment? You did say it was an expensive exercise. Ms. Guy: Yes. Mr. Karim: And, in addition to that, were you concerned about the success or failure rate of those who were assessed? Ms. Guy: In the last set of hirings we put out an advertisement, we wanted six pilots. We put out an advertisement, we got 125 applications. We went through a process of shortlisting those persons, they go through psychometric testing; we have other online tests; we have panels that we set up to do structured interviews in a particular way; and from that list we would cut that down to about 50 persons who would go through a process of simulator training. On the last occasion we stopped at that stage because we determined that we would not proceed with the recruitment process and select anyone until we were completed with the manpower audit that we are currently undertaking. Mr. Karim: So, you were not satisfied with the—about 70 persons? Ms. Guy: About that, yes. Mr. Karim: And that is where I was going because it would have impacted upon the quality of the experiences of the pilots coming to the interview. Ms. Guy: The recruitment process is rally rigorous. We put the candidates through a very thorough process, and we shortlist, make sure we have the right persons to place on that order of merit list. Mr. Karim: What is the retirement age of pilots? Ms. Guy: Sixty-five. Mr. Karim: And just to get a sense in terms of in the airline, not only in

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terms of the pilots, but could you give us a sense—if not now, maybe in writing—if you could indicate to us how many persons have reached their retirement age and how many have been rehired having reached that age? Ms. Guy: Okay. Just for clarification, the official retirement age in Caribbean Airlines is 60, but pilots can work up to 65. And at this point in time we have, I think the number is in the— Mr. Karim: You have about 24 between 60 and 65. Ms. Guy: Right, between 60 and 65. Mr. Karim: So, they would have been rehired? Ms. Guy: Yes, but on the same terms and conditions, same seniority and everything. It is just that we retire them at 60 because that is the official retirement age limit. Mr. Karim: And just finally, a previous CFO made mention of a billion dollars—I am just saying what was reported—that would have been lost to credit card fraud and also in terms of cargo issues, do you have any experiences in the recent times that would cause you alarm? In other words, are there issues in terms of any such matters again of corruption in credit card fraud or in cargo issues? Ms. Guy: Okay, so I will hand that back to the Chairman and he can designate who will answer that question. Mr. Quamina: Member Karim, could you say what figure did you quote? Mr. Karim: No, I am saying that there was a previous statement, not in your thing here, that there was a concern over a large sum of money, and I think what was mentioned was a billion dollars—I do not know how that was arrived at—but with respect to credit card fraud and also corruption issues with cargo, and the question I am asking is if there is still that concern for issues of corruption with respect to credit card and cargo-handling matters? Mr. Quamina: Insofar, I am not aware of any issues insofar as cargo is

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concerned. We still do experience difficulties with respect to what is credit card fraud, and I will ask Mr. Agarrat to give you an update in relation to that. Mr. Agarrat: Good day Committee and members, in regard to the cargo issue which was a comment made somewhere in 2013, I believe, what we found out that to be an accounting error and we had rectified that issue with our external auditors and made the appropriate adjustments. Mr. Karim: What was the figure, the accounting error, the figure that was an accounting error? Mr. Agarrat: We had estimated the error to be in the vicinity of say US $20 million. Mr. Karim: As an accounting of US $20 million? Mr. Agarrat: Over two accounting periods. Mr. Karim: In cargo? Mr. Agarrat: In cargo. Mr. Karim: And the other matter had to deal with the credit card? Mr. Agarrat: The issue with credit card fraud, that is a continual issue, based on what we in Caribbean Airlines look at as criminal activity against the airline, where we have persons using other people’s credit card information to make bookings through our website. Currently, we have been working with another provider in looking at—we have a system currently, but we are looking at a more efficient system that could help prevent the frequency of which we have those issues. Right now we have a team that works every day in trying to mitigate the impact of that. Mr. Karim: Can you indicate the exposure in that regard with respect to the credit card fraud that you are currently experiencing? Mr. Agarrat: Currently, about US $40,000 a month. Mr. Karim: US $40,000 per month in credit card fraud that CAL is

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experiencing? Mr. Agarrat: Yes. Mr. Karim: Can I just ask, for example—I know the Chairman might be—I see his mike is on too. What is it that you are doing currently, or what have you proposed, or what are you proposing to do?—I mean, I know you are talking about the new system, but if you could give us some, so that the country would be a bit comforted to know that you are handling these matters expeditiously and very clinically to avoid US $20 million in fraud that— Mr. Agarrat: No, no, no. Mr. Karim: I am talking about the cargo issue that you mentioned, the accounting error of US $20 million, and then the credit card fraud of this sizeable monthly sum. Mr. Agarrat: The accounting error, that was rectified within our 2012 accounts, so we restated those accounts, so that was part of our delay in preparing some of our accounts. What we realized was that there was an overestimation in some of the revenues declared, and we rectified that matter, because what it meant, there was a receivable sticking out that was not something that ought to be collected based on the overestimation. And the issue with the credit card fraud, we are currently working with a provider who is more integrated with our present passenger service system, and that provides a more, —should I say, integrated approach in tackling and identifying what is the probability of cards that might be compromised. Mr. Karim: But in cleaning up the act, have you brought people to book, to account? Mr. Agarrat: We have made a report. There are challenges involved in that. One of the issues we have is that some of the information that we would require to have a proper either criminal or civil prosecution is not available to us given our contractual arrangement with our PSS provider right now. So, part of the new

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implementation is to actually deal with that issue. I have discussed with our legal counsel where we see that we are going to have challenges in going in the criminal prosecution, that we explore the civil prosecution of certain matters. Mr. Karim: What in your view is the potential for recovery? Or, is it going to be an item to be written off? Mr. Agarrat: There are two issues involved in that. One, we have the issue where some of the passengers, it is when fraud has been perpetrated upon them, so for instance they have either bought the ticket through a third party who would have been the person who engaged in the fraud. We have liaised with IATA on what is the best mechanism to recover some of those items. It would require getting a significant amount of information on the passenger. We have looked at the avenue of going through a debt collector—so once we have all the available information on the passenger, and also we are going to have to find a way to work with a number of different jurisdictions, because obviously we can have passengers who live in different countries, they have different legal requirements in bringing either criminal or civil matters. Mr. Karim: Could you tell us of your other destinations, whether similar situations arise, and could you give us an idea of the amount of money, and which is the closest destination that such a situation has arisen? 12.20 p.m. Mr. Agarrat: I cannot give you specifics on the numbers but I could give you where the points of entry or commencement of travel, where we see high incidence of fraudulent travel, out of Trinidad for travel to NewYork, out of Kingston also, for travel out to NewYork. We also had an issue with, out of Caracas, where we think we tackled that using some assistance through our immigration authorities. We also have instances out of Guyana to North America. So those are the four areas we have seen where we have a lot of instances of attempted fraud.

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Mr. Karim: And are those recoverable? Mr. Agarrat: Hardly. Mr. Karim: You have a ballpark figure in which you can tell us and if they are recoverable? What I am trying to establish is, again, this would be a haemorrhage out of the airline? Mr. Chairman: And I would like to interject here. I would like, the information requested by MP Karim, we would like to give the company the time to put the data together and submit it to the Committee—[Interruption] Mr. Agarrat: No problem. Mr. Chairman:—we will do the formal request. The Chairman would like to just take us back to Ms.Guy, regarding the pilot recruitment. I have looked at the numbers you provided to us and you have 28 per cent of your current pilot body in the age group 56 to 65. So a little over quarter of your pilot body is either due for retirement or past the retirement age. So I know that you have done your last hiring in 2015— Ms. Guy: Yes. Mr. Chairman: So that I think you are almost, you are virtually overdue right now. What is the plan?—because on the numbers you provided to us, 28 per cent of your current pilot body is between the ages of 56 to 65. That is quite significant so that they are either preparing for retirement or have retired and have been returned. But even then the shelf life on the returnees is finite. So is there a normal succession plan? I need to understand how that works. Ms. Guy: Right. Normally we would be in a hiring mode with respect to pilots. When we returned to the 767 we did have a small surplus. We projected over a three-year period what our resources would look like in terms of pilots and we saw a small surplus but we decided to retain those pilots given the turnover that we knew we would have over that three-year period. And it does take a long time to train a

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pilot. So the 11 pilots that we had a surplus, we said no useful purpose would be served in sending them home and we can build them into the schedule, send persons on leave and so on. But that has quickly been absorbed. And in 2016 we determined that we needed six more pilots based on the schedule. And we have started that process which we have now put on hold and which the operations department, they have reorganized the schedule so that we can work with the pilots that we have right now and use the pilots that we have in Jamaica and in Trinidad to meet the schedule. We do hope to complete that manpower audit before the middle of this year, perhaps by May, so that we can see—we have a good picture of what our requirements are, particularly with respect to the operations that we would have. And I know that the operations department has been looking at the utilization rate and trying to increase the utilization rate for the pilots. So that is also helping. Mr. Chairman: Well, your data you presented is interesting. You advertised for six positions, you got over 100 applications. So there seems to be no shortage of available people who seem to think that they are qualified. So I have nothing against retirees working and continuing to earn, but it seems that there is a large body of people who are looking for jobs in the piloting field and that that should be part of the company’s strategy also, that while you—I understand piloting is a unique skill and it requires people with a lot of experience, you need to have them on board. So it requires a mix. Ms. Guy: Yes. Mr. Chairman: I want to give the floor to Sen. Baksh who has been waiting for a little while. Miss Baksh: Thank you, Chair. The company last year upgraded its frequent-flyer programme and there have been many challenges. For example, when someone tries to check in and they give their frequent-flyer number the system does not always

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recognize the numbers. Why is that so and is it because the system is not automatic and it is done manually? And also, with respect to the transfer of membership numbers, I know you all are in the process of that. Was this done successfully? Also, with regard to the issuance of the frequent-flyer new membership cards, what is the status? Mr. Quong Sing: Through the Vice-Chair, Chairman, members of the Committee, yes, we did migrate into a new loyalty system. Prior, we were running actually on two systems: one for Jamaica, primarily Jamaica customers, and one for Trinidad customers which was quite inefficient. In joining the two systems together that did create the challenge in terms of the membership numbers because we consolidated it and created one number. So there were some challenges and part of it was communication in our end, in terms of the front line. That has since, in my understanding, been resolved and therefore everybody should have their numbers. In terms of—may I ask, your other question in terms of—[Interruption] Hon. Member: Transfer. Mr. Quong Sing: Transfer of miles. We have started a new programme. We keep at a low rate, in terms of branding and product, we keep—as the industry changes quite a bit we change as well, in terms of trying to offer the best that we can, and I believe you might be referring to pooling of miles, family pooling? So where families, for instance, some may be travelling on business, the wife may travel on leisure, et cetera, we are allowing families to pool their miles in order to be able to get the best use and opportunity to use the mileage, should they want to use it on a flight for any member of the family. Miss Baksh: I have one more question. My question relates to the cabin crew transportation. Why does CAL continue with the practice of providing home-to- airport return transport for local cabin crew? And also, is it not normal practice with airlines to only provide this at destinations and not the home base of the cabin crew?

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I have one more questions before you answer, and I also would like to know, what is the annual cost of this service and who are the providers—contactors, actually? Capt. Singh: We have, in CAL, provided transport for cabin crew from home to work and to return. Cabin crew leave home at different times of day. Cabin crew return home at different times of day. We have had security incidents with cabin crew. It is for the safety of cabin crew, both in Port of Spain and in Jamaica that we provide them with transport. The overall cost of the transport, I do not have a figure, we will be able to provide it at a later date and the service provider is R&R Transport in Trinidad and I believe it is Chin’s Transport and Tours Limited in Jamaica. Mr. Chairman: Just on a quick follow-up. You missed one element of the Senator’s question. What is the norm with airlines, regarding to that? I understand your response is that you do it because there is a security issue and perhaps also there is a legacy issue because you have always been doing it. That for me is part of the issue, that probably the airline is doing things because it has been doing it all along and perhaps some of those things need relooking at again. It does not mean to stop it, but at least look at it again. I think the question the Senator asked was whether or not what is the practice of other airlines? Is it the practice to provide home-to-airport service for home base crew? Is that the practice? Capt. Singh: It varies by airlines. There are airlines that do and there are airlines that do not. Mr. Chairman: I think I have one question from Sen. Mark, but Sen. Henry wanted just to follow up on one of the earlier points and then I will take one last short question from Sen. Mark before we wrap up. Dr. Henry: I know we are pressed for time to wrap this session up, but on the last occasion when we talked about the issue with the ATRs we were told that getting out of the contract with the company is difficult but not impossible. I think that was the language that was used. And it would involve some negotiations because of the

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problems with the aircraft, obviously, where it should put us in a position where we could negotiate and get some kind of benefit or if not for outright breach of contract for providing substandard equipment. Has there been any progress with that? Mr. Quamina: Member, I think my response on the last occasion was that the contract had some clauses in it which I found to be somewhat surprising insofar as the warranties and the limitation, insofar as those warranties are concerned. That was based on, not only my reading of the contract, but also there was advice received from a fairly well-known firm abroad in relation to their analysis of the contract. Since then we have obtained a second opinion in relation to the contracts from another firm and that firm has given us certain advice in relation to the contracts. So there has been progress made in relation to it; for obvious reasons, the advice is not something I would want to disclose at this moment. Dr. Henry: Okay, that is understandable. No problem. Mr. Chairman: Sen. Mark, last question from the floor. Mr. Mark: Two small questions, no pun intended. [Laughter] I am directing this to the Civil Aviation Authority. In your submission you stated that the Civil Aviation Authority in accordance with the Act has established and maintained a safety oversight system. Would you be in a position to provide this Committee with a copy of your Safety Oversight System Manual? Capt. Lawrence: Chairman and Senator, we shall send you a copy, however you like it, soft copy or hard copy? Mr. Mark: Both. Capt. Lawrence: Will do. Mr. Mark: And my final question, Mr. Chairman, is this, I want to quote the Civil Aviation Act. This is again directed at the Civil Aviation body here. I think it is section 8(1). It reads: In performing its functions and exercising its powers, the Authority

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shall have as its paramount consideration the safety of aviation. I want to ask the Civil Aviation officials, based on your submission concerning the identified effects with the 9Y-TTA and 9Y-TTD aircraft, we are concerned that the issues identified appear to be symptoms of an underlying root cause. The question is, has troubleshooting and maintenance action by the ATR manufacturers successfully resolved the root cause of the defects? I want to get a clarification from the Civil Aviation Authority on this. Mr. Regis: The Civil Aviation Authority has received from Caribbean Airlines a report with respect to the actions taken and we are satisfied with the actions taken for return to service of the aircraft. Mr. Chairman: Thank you very much. As I begin to wind up I just want to have a follow-up for Ms. Johnson, Acting Permanent Secretary, Ministry of Finance. I have it correct? Ms. Phillips: Ms. Phillips. Mr. Chairman: Ms. Phillips, forgive me. At the last hearing, the representative of the Ministry of Finance, a question was asked regarding Caribbean Airlines aremaking a proposal or submission to the Ministry of Finance regarding structuring their fees, regarding additional charges, and that the response that we received from the Ministry of Finance is that they have received information that they would be able to give a decision or an update around February. Given that today is the middle of March, could you give us any update or any progress on that matter? Ms. Phillips: Well, we have received all—we had needed additional information from Caribbean Airlines which we received. The matter was analyzed by our analyst and it is before the Minister now. Mr. Chairman: Excellent, so a recommendation is before the Minister. Ms. Phillips: Yes. Mr. Chairman: Well, I am happy to report to Trinidad and Tobago that there has

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been some traction in the matter. Let us see how long it stays on the Minister’s desk. Well, I am very happy to hear that because that was one of the issues that came out of the last hearing, the fact that Caribbean Airlines is constrained in the Tobago route—[Interruption] Ms. Phillips: One of the recommendations was that we receive the opinion of the THA before we go ahead. Mr. Chairman: That is fine and we accept that. But I think that the important issue that came out at the last hearing and it came out today is that there are some ways— the ways in which the system for the Tobago ticketing that constrains the airline in being efficient on that service. So rather than a capacity issue, probably the average citizen might be thinking perhaps you need to put on more planes. The issue is really an issue to deal with how the system is ticketed and the way in which—if you apply, what applies as a normal fare, if you do not use the fare it is nonrefundable or there are charges for reissuing the ticket, Caribbean Airlines is not allowed to do that. So that is actually constraining the system. So I hope that the Ministry of Finance takes a good look and makes a decision on that which will assist the airline. So I want to thank very much—[Interruption] Mr. Quamina: Mr. Chairman, sorry. There are two very, very short issues I just wanted to—[Interruption] Mr. Chairman: I will give you the opportunity to make a couple of remarks, just give me one minute. [Crosstalk] Certainly. I want to firstly, I want to begin my wrap-up by saying that I think that the Committee is pleased with the responses from Caribbean Airlines on the queries that we have had and we appreciate the time taken by the members of the Civil Aviation Authority, we know they are very busy people who are dealing with a significant issue in the country. We appreciate your ability to come and also the members of the Ministry of Finance for taking time out of their busy schedules to be here.

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As I begin to wind up, I would like to invite closing comments from the Vice-Chairman of Caribbean Airlines. Mr. Quamina: I am very grateful. Just on a quick issue of the pilot recruitment. There is a manpower exercise that is going on and pending the conclusion of that exercise which we have put a very short time frame on, we would be reluctant to engage in any hiring until we understand just how many pilots we require to provide the service that we are providing. So that really is, I do share the Chairman’s concern about the age issues, but that is what would be holding us up from taking the immediate step to get that manpower plan in so that we can analyze exactly what this airline requires in order for it to operate effectively. That is one. Secondly, the credit card issue stunned this board at its first board meeting and I would say—it is no comfort—but I would say we were also stunned to learn that within this region we are below the industry norm in terms of credit card fraud. In any event, the fact about it is that we have put all our resources behind getting the necessary equipment to stop it and in addition to which we have also had discussions with the firm of Ernst & Young to come in as well and have a look at the credit card system to make sure—because whether it is below the industry norm or not that those figures were quite astonishing to us. So those were the two issues I wished to address before closing. Mr. Chairman: Thank you very much. I want to say that, as I begin to wrap this session up, I think at the last hearing I indicated that I for many years, the Chairman, has been a loyal supporter of the airline in all its various—even the days when Caribbean Airlines or BW flew an A321, very few people could remember that. I flew on an A321 more than one occasion, in the beautiful gold colours, not to mention the L-1011-500 and all the other various ways. So I have a long history with the airline, I understand the challenges of the airline. I have had varying service experiences with the airline and I think that every

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citizen here wants Caribbean Airlines to be successful. We want you to be successful. This Committee wants you to be successful for Trinidad and Tobago. And there must never be any misunderstanding about what we are here to do. We are here to try to understand your issues and your challenges and to help you to overcome those challenges so that you can perform to the best that you can perform and allow the citizens of Trinidad and Tobago who want to be able to have a reliable, affordable service to be able to go to their destination of their choice, but also for the Minister of Finance to receive appropriate returns, in terms of dividends and profits back to the state coffers. So with that note, I wish to indicate that this meeting is now adjourned. I want to thank the members of the media and the various platforms who have been viewing and listening to this broadcast. I want to thank you for all your questions again and which we will try to continue to address, but I want to thank everyone who has been viewing, listening or being online listening to the survey. Thank you very much. This meeting is now adjourned. 12.40 p.m.: Meeting suspended.

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Appendix III

Analysis of CAL Financials

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Staff and Operating costs of CAL vs the US airlines

American Delta Airlines Hawaiian JetBlue Southwest Spirit Airlines United Airlines Virgin America . CAL 2015 Airlines 2015 2015 Airlines 2015 Airways 2015 Airlines 2015 2015 2015 2015 Fleet Size 17 949 807 48 215 695 78 723 63 Average Monthly Salary per Employee

Group General Management Personnel $18,341 $5,806 $14,048 $11,183 $8,216 $ 7,303 $4,917 $ 36,332 $8,339 (Average Monthly) Pilots And Copilots (Average Monthly) $9,493 $18,207 $16,282 $12,447 $12,445 $19,219 $9,424 $15,425 $12,452 Flight Attendants (Average Monthly) $1,689 $4,077 $4,113 $4,196 $3,746 $5,150 $2,031 $3,925 $3,294 Maintenance Labor (Average Monthly) $2,528 $6,144 $5,379 $6,248 $4,886 $9,506 $9,920 $4,641 $7,399 Total Staff Salaries by Category $32,051 $34,233 $39,822 $34,074 $29,292 $41,177 $26,292 $60,323 $31,485 Analysis General Management Personnel as Percentage of Total Staff Salaries by 57% 17% 35% 33% 28% 18% 19% 60% 26% Category Pilots and Copilots as Percentage of 30% 53% 41% 37% 42% 47% 36% 26% 40% Total Staff Salaries by Category Flight Attendants as Percentage of 5% 12% 10% 12% 13% 13% 8% 7% 10% Total Staff Salaries by Category Salaries vs Operating Expenses Salaries-Total (000) $77,286 $7,313,477 $7,662,184 $351,966 $1,058,276 $2,752,361 $284,434 $6,930,027 $226,436 Total Operating Expense (000) $554,596 $34,895,440 $32,971,114 $1,882,133 $5,217,766 $11,115,876 $1,632,341 $32,696,839 $1,352,346 Salaries as Percentage of Total 14% 21% 23% 19% 20% 25% 17% 21% 17% Operating Expenses NB. 2013 figures used from latest available Comprehensive Income

Statement dated December 31, 2013. Exchange rate used $6TT : $1US

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Appendix IV

Correspondence between JSC on National Security and Inland Revenue Division

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MINISTRY OF FINANCE INLAND REVENUE DIVISION Office of the Chairman TRINIDAD HOUSE, ST. VINCENT STREET, PORT OF SPAIN TRINIDAD AND TOBAGO Web site: http:www.ird.gov.tt Telephone No. 868-623 -4921 Fax 868-627-7967

July 7, 2017

Mr. Brian Caesar Secretary to the Committee Joint Select Committee on State Enterprises Level G- 9, Tower D #1A Wrightson Road Port of Spain

Dear Mr. Caesar,

Re: An Inquiry into the management and operations of the Caribbean Airlines Limited (CAL)

Reference to made to your letter dated July 5, 2017 on the subject at caption.

Please see below the responses to questions asked by the JSC:-

1. Whether the use of jump seats by off duty CAL pilots during flights are regarded as “Benefit in Kind” and if yes, is it the responsibility of CAL to report all such occurrences to the Board of Inland Revenue (BIR)?

The use of jump seats are considered taxable benefits in kind. The relevant sections under which the use of jump seats would be considered as a benefit in kind is Section 134(1) of the Income Tax Act which states as follows:-

“*134. (1) Subject to sections 135 to 141†, where a company incurs expense in or in connection with the provision, for any of its directors or for any person employed by it in an employment to which sections 133 to 141† apply, of living or other accommodation, of entertainment, of domestic or other services or of other benefits or facilities of whatsoever nature, and, apart from this section the expense would not be chargeable to tax as income of the director or employee, so much of the said expenses as is not made good to the company by the director or employee shall be chargeable to tax under the provisions of this Act as if the expense had been incurred by the director or employee and the amount thereof had been refunded to him by the company by means of a payment in respect of

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expenses, and section 76 and subsection (2) of this section shall have effect in relation thereto.”

Therefore, it’s the responsibility of Caribbean Airlines Limited to report all such occurrences to the Board of Inland Revenue.

2. Is CAL required to provide payment (in the form of tax) to the Board of Inland Revenue?

CAL is required to provide the payment (in the form of tax) to the Board of Inland Revenue. Under section 134 of the Income Tax Act, the use of the jump seats would be considered a benefit in kind under the terms and conditions of the employment and therefore considered a taxable benefit. Further under Section 99(1) and (2) of the Income Tax Act, which provides as follows:-

99. (1) Notwithstanding any provision of this Act to the contrary, where emoluments arise or accrue in or are derived from or received in Trinidad and Tobago in a year of income for the benefit of an employee or the holder of an office, tax shall, subject to and in accordance with any Regulations made under section 125, be deducted or withheld by the person providing the emolument. 99.(2) The tax deducted or withheld as required by subsection (1) shall, subject to and in accordance with any Regulations made under section 125, be paid to the Board by the person deducting or withholding the same at such time or times and by such date or dates as may be prescribed by such Regulations, and on the payment thereof the Board shall send to such person a receipt which shall to the extent of the amount referred to therein be a good and sufficient discharge of the liability of such person for any amount deducted or withheld as required by this section.

Therefore, the employer, in this case (CAL) will have to remit the taxes on this benefit to the BIR. Please note that a value would have to be attached to the use of the jump seat by the employer in order for them to calculate the amount of taxes due.

Yours Sincerely,

……………………………………. Mrs. Allison Raphael Chairman, Board of Inland Revenue

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Appendix V

Attendance Register

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ATTENDANCE REGISTER 2016/2017 Session, Eleventh Parliament

11th 12th 13th 14th 15th 16th 17th 18th 19th Name Meeting Meeting Meeting Meeting Meeting Meeting Meeting Meeting Meeting 04.11.16 09.01.17 07.02.17 13.03.17 27.03.17 24.04.17 08.05.17 05.06.17 16.06.17

Mr. David Small √ √ √ √ √ √ √ √ √

Dr. Lester Henry √ Exc. √ √ Exc. √ √ Exc. √

Mrs. Cherrie-Ann Crichlow-Cockburn √ Exc. Exc. Exc. √ √ √ Exc. Exc.

Brig. Gen. (Ret.) Ancil Antoine Exc. √ Exc. √ √ √ √ √ √

Mr. Adrian Leonce √ √ Exc. √ √ √ Abs. √ Exc.

Mr. Fazal Karim √ √ √ √ √ √ Exc. √ √

Ms. Allyson Baksh √ √ Exc. √ √ √ Exc. √ √

Mr. Wade Mark Exc. √ √ √ √ Exc. √ √ √

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