BWIA planes released
Stabroek News
May 31, 2003
(Barbados Nation) BWIA’s two aircraft seized at the Miami International Airport have been released.
And, the cash-strapped airline has been given a 120-day grace period to clear off its US$100 million debt. But, with conditions attached.
Following a day of intense talks in Port-of-Spain on Thursday between the Trinidadian government, the International Lease Finance Corporation (ILFC) and BWIA officials, it was also agreed that the airline would pay its arrears of US$5 million for March, April and May immediately.
Trinidad’s Planning and Development Minister Keith Rowley confirmed that officials had reached an agreement with ILFC. The airline owes about US$20 million to the leasing company.
BWIA also has to continue to pay US$2.3 million per month to ILFC to keep its lease up to date. If this fails, the airline could risk having all its aircraft seized by ILFC after September.
This comes after a week of uncertainty as the airline came close to losing all its aircraft after two Boeing 737s were seized last week Tuesday and Thursday at Miami International Airport.
The Trinidad government requested the meeting after the leasing company threatened to seize more planes if the US$5.5 million payment was not made toward outstanding debt. Seven of BWIA’s eight planes are owned by the leasing company.
The seizures caused the airline’s other creditors to demand immediate payment, Rowley added.
The minister said the government, which owns 33 per cent of the airline, would loan BWIA the money for the first payment, and would guarantee the airline’s monthly lease bill of about $2 million over the next four months, he said.
With this assistance, Rowley said BWIA would now be in a position to operate all of its flights throughout the busy summer months, its most profitable period.
Government officials also ordered BWIA to immediately “restructure” its management as a condition of assistance.
The government has also hired consultants to review BWIA’s books so officials could see how the company stands financially, Prime Minister Patrick Manning said.
BWIA has blamed its financial difficulties in part on increases in
security and insurance costs and a drop in passengers that followed the
September 11 attacks.
The war in Iraq resulted in a further five to
seven per cent passenger reduction, the company said.
