By Clint Chan Tack Saturday, January 1 2011

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PAL-E-WALS: Minister of Works and Transport, Jack Warner, left, gets a hug from new Chairman of Caribbean Airlines, George Nicholas III, as they show ...

GOVERNMENT will renegotiate a fuel hedging arrangement that is helping to keep Caribbean Airlines (CAL) in the air, and help it with its expansion plans.

This was disclosed yesterday by Works and Transport Minister, Jack Warner. The agreement was entered into in 2007 under the then PNM government, and is due to expire early next year.

Warner told Newsday that CAL chairman, George Nicholas III, had made a request to him to extend the fuel hedge for one year. Warner said he sent a note to Finance Minister Winston Dookeran on Tuesday. Warner added that he expects a “favourable” reply from Dookeran early next week. Government is estimated to have paid an annual fuel hedge of US$10 million over the last three years.

At an earlier news conference at the Works Ministry’s head office in Port-of-Spain with Warner, Nicholas said a fuel hedge was normal in the aviation industry and CAL’s records show that this hedge was offered by Citibank to the previous board, chaired by businessman Arthur Lok Jack.

Nicholas was confident that Government would keep the fuel hedge in place.

Nicholas then disclosed that CAL will lease six Boeing 737-800 jets at a cost of $300,000 for its joint venture arrangement with Air Jamaica. He said the Air Jamaica service will be relaunched January 14, in Jamaica.

Stating that CAL continues to pursue its “one Caribbean airline” approach, Nicholas did not rule out the possibility of CAL partnering with other regional carriers in a way similar to the Air Jamaica arrangement.

Nicholas also revealed that CAL was looking at resuming flights to Heathrow International Airport in the United Kingdom. Local flights to Heathrow were scrapped shortly after the demise of its predecessor airline BWIA.

“We will be going to Heathrow this year. We have already started those negotiations on leasing slots into Heathrow,” Nicholas assured.

Nicholas also said the recent snowstorms in the US did not adversely affect CAL flights to its destinations there. He noted that CAL offered vouchers of US$250 to its passengers who were stranded in Baltimore during those storms.

Warner expressed confidence in the state of CAL’s finances and the airline’s continued financial health under Nicholas’ stewardship. The minister said once CAL continues to exercise fiscal prudence, “I don’t think we shall see the days of BWIA (again).”