Fuel subsidy to Caribbean Airlines ends, no fare increases expected

The Trinidad & Tobago-based Caribbean Airlines has confirmed that it will not be increasing ticket prices after the Persad-Bissessar administration announced this week that it was ending its fuel subsidy to the state-owned carrier.

The twin-island nation’s finance minister Larry Howai said the subsidy, which was estimated at US$40 million last year, would come to an end on October 1.

Caribbean Airlines said the trigger price level for the subsidy has been increased each year over the last 2 years.

“In other words, if the price of fuel remained the same over the years, the subsidy per gallon was decreasing each year. Secondly, Caribbean Airlines has not used the fuel subsidy as a competitive pricing tool,” the airline said in its statement, adding it had no intention to change the broad pricing strategies.

“The caveat, of course, is that there are no significant increases in market fuel prices. These strategies recognize seasonal demand, consumers’ demands for value for money fares, as well as the potential increased competition.”

Howai had told legislators that the new airlines board had completed the first phase of a revised business plan for the airline to achieve financial viability.- (CMC)