Aleong says BWIA needs US$500,000 more for release of planes
-T&T government claims BWIA has not been candid in negotiations
Stabroek News
May 25, 2003
BWIA Chief Executive Officer Conrad Aleong has said that the airline only needs an additional US$500,000 to secure the release of its two aircraft which were seized in Miami by their owners, International Leasing Finance Corporation (ILFC) this week.
However, the Trinidad government is contending that BWIA has not been forthright with it in negotiations and a cabinet sub-committee is looking at the issue.
The first aircraft was seized on Tuesday while a second was seized on Thursday as BWIA was negotiating for the release of the first.
Stranded passengers, which included some en route to Guyana, were accommodated at a Miami hotel at the expense of BWIA.
The Trinidad Government had provided a US$5M letter of comfort to secure the release of the Boeing 737 seized by ILFC on Tuesday, and according to the Trinidad Guardian Aleong has said that the airline now needs only an additional US$500,000. However, Trade and Industry Minister Kenneth Valley said on Friday morning that Aleong had told him on Thursday, the ILFC would not release the two aircraft unless the corporation received US$8 million for a maintenance reserve.
The Guardian quoted Valley as saying that on Wednesday BWIA had assured the Government that a US$5 million letter of comfort was all that was needed to clear its debt with ILFC.
Aleong on Friday told the newspaper that ILFC had agreed that day that US$5.5 million would be accepted with other payments in the next few months.
Aleong did not specify how BWIA would acquire the additional US$500,000 but Valley who was interviewed by the daily after Parliament on Thursday said no additional state funds would be available to BWIA to clear its debt with ILFC.
Nevertheless, a cabinet sub-committee was due to meet to discuss the matter and to decide whether any additional state funds would be used to help BWIA.
Aleong maintained that the negotiations for the two aircraft were changing daily and Valley had jumped the gun when he informed the Guardian on Tuesday that the US$5 million letter of comfort would be enough to keep ILFC from seizing any more BWIA planes.
Meanwhile the Trinidad Express quoted Prime Minister Patrick Manning as saying following the seizure of the second plane that the government’s position on BWIA was becoming a case of “enough is enough.”
Manning was reported as commenting that, “Those reporting from BWIA to Government have not been as forthright as they ought to be; it is clear that the facts are not known to us, when we are being told that US$5 million is to be applied to one particular problem and then the following day being told that US$1.5 is for that and US$3.5 is for another... their tune changes with the weather.”
According to the Express when the first airplane was seized on Tuesday, the government was told that the airline needed US$5 million to secure its release. They were on Thursday told by BWIA that US$3.5 of the US$5 million had been applied to outstanding lease payments and US$1.5 million to severance payments.
Manning made it clear that a BWIA bail-out was not a done deal.
The Prime Minister, the Express said, also did not rule out the possibility of it happening again, as he did say that Government needed further information and he was awaiting the report from the sub-committee before responding. Manning was reported as even wondering whether the crisis was not being strategically timed.
In a one-page press release, BWIA Corporate Communications Manager Clint Williams assured passengers that the airline had the situation in hand and negotiations were continuing for the release of both aircraft.
The Express said that the airline owes ILCF approximately US$16 million in outstanding maintenance reserves and another US$5 million in lease rentals, US$21 million in outstanding payments and well over the US$18.5 April bailout requested by the Conrad Aleong management.
ILFC is a wholly owned subsidiary of the American International Group (AIG), which is also the parent company of American Life and General Company Ltd (ALGICO).
