Trinidad and Tobago on Monday announced that it would be scrapping the fuel subsidy to financially troubled Caribbean Airlines from next month but air fares were not expected to rise.
The twin-island’s Finance Minister, Larry Howai, in his budget presentation to the Parliament, said the subsidy for Caribbean Airlines’ international operations would be discontinued from October 1. The fuel subsidy would remain for CAL’s domestic flights to and from Tobago.
“I’ve been assured by the Board of Caribbean Airlines Limited that the removal of the fuel subsidy will not impact the ticket-pricing policy,” he told the House.
Several Caribbean governments and regional carrier LIAT have called for the removal of the fuel subsidy to CAL, citing unfair competition. The subsidy has so far amounted to US$46.7 million.
He explained that the removal of the subsidy was incorporated into CAL’s business plan which he would receive from the Board on September 17.
The business plan, whose first phase has been completed, is expected to help CAL achieve financial viability.
Howai minutes later in his budget presentation announced that the United States-based low-cost airline, Jet Blue, would begin flying to Trinidad from July 20, 2014. The Greece-based Apollo airline is expected to begin charter flights from selected European cities to Tobago.
According to the Finance Minister, those two new services would complement West Jet’s flights between Toronto and Port of Spain and Caribbean Airlines’ services to North America.