Government to Bail Out Financially-Troubled Airline
BRIDGETOWN, Barbados (AP) _ The national government will lend $1 million to Carib Express to bail out the cash-strapped airline which suspended flights last week, an official said Monday.
The loan hinges on the employees of Carib Express agreeing to forgo their April and May salaries and pump 10 percent of their monthly earnings into the airline over the next 10 years, said Ronald Topping, Minister of International Transport.
The workers will be given a five-year grace period before they have to begin repaying the loan.
The Barbados-based carrier employs 120 people and needs $3 million to keep its operation running until it can implement a new business plan.
Paul Lewis, a manager, told The Associated Press the funds sought would keep Carib Express going until May 1, when a revised summer flight schedule goes into effect.
The government agreed to the loan after Carib Express employees outlined plans to invest their money along with private investor funds to help straighten the airline’s finances.
The loan also hinges on the workers submitting a revised business plan for the airline, including a mutually attractive agreement between Carib Express and BWIA International, a Trinidad-based carrier reportedly interested in investing in Carib Express.
Carib Express, which offers flights to eight Caribbean nations, halted operations indefinitely on Thursday.
Industry sources said it lost more than $6.5 million since it started flying Feb. 15, 1995.
Investors put up an initial $15 million in Carib Express. Private investors from the Eastern Caribbean own 70 percent, British Airways owns 20 percent and five Eastern Caribbean governments own the remaining 10 percent. The countries are Barbados, Dominica, Grenada, St. Lucia and St. Vincent and the Grenadines.