Air carriers in the Caribbean are slipping deeper into a debt trap and most of them may take many years to recoup the losses they suffered following the outbreak of the COVID-19 pandemic.
From Bahamas Air to Suriname Airways, and LIAT to Caribbean Airlines, most of the air carriers are feeling suffocated under a mountain of debt, with governments in the region continuing to show reluctance in bailing them out.
Some carriers are raising fares to scramble out of the crisis quickly. Bahamas Air, for example, has already increased ticket prices. The Airlines, owned by The Bahamian government, claims to have lost more than US$50 million.
“As COVID-19 and the effects of this pandemic have unfolded and Bahamasair has been grounded, yet still paying all of its expenses – payroll, debt service, leases, and rent – the estimated losses for Bahamasair are going to mushroom to well in excess of $50 million,” the country’s Aviation Minister Dionisio D’Aguilar told reporters recently.
Suriname Air is struggling to pay taxes, let alone repay loans. The Airlines owes at least $88 million (approximately US$6 million) to various bankers, according to a local news portal Caribbean Life. The company is hopeful that four good years would be enough for it to clean up its balance sheet.
Another large and old carrier, LIAT, owes millions of dollars to its employees as well as creditors. Its financial situation was already in dire straits. And the pandemic added salt to its wounds.