Phillip Saunders, CEO of Caribbean Airlines, is seen in this November 13, 2007, Gleaner photo at a press conference to launch additional flights to Kingston and other destinations, at the Jamaica Pegasus hotel in New Kingston. - File

Caribbean Airlines (CAL) is expected to break even this year, having successfully dodged higher jet fuel prices, in a period when other international carriers have either gone out of business or have been cutting back on routes.

CAL's chief executive officer, Phillip Saunders, said the company had hedged successfully against the rise in fuel prices, acting on a recommendation of the Arthur Lok Jack Task Force that established CAL in 2007, resulting in the fixing of the airline's fuel bill for now.

"The fuel hedging programme provides positive competitive position for a set period of time," said the Caribbean Airlines boss, speaking at a meeting of the American Chamber of Commerce in Trinidad.

World oil prices are currently experiencing extreme volatility, rising above US$147 several times in the past two to three weeks, but swinging as low as US$132 in the same period.

Ratio

"For every dollar increase of oil, airline costs go up by US$1.6 billion," said Saunders.

"Twenty-four airlines have gone bankrupt in the last six months," he added.

But even amid the industry turmoil, Saunders said CAL - which is the restructured and recapitalised loss-making airline that once was BWIA - was placed to make a profit next year.

The Trinidad airline is ahead of its revenue targets, and expects to break even at the end of the year, but as Saunders signalled, there is no room for complacency.

"This is the most challenging market airlines have ever faced and Caribbean Airlines still faces tremendous challenges," the airline CEO said.

He added that while some airlines have cut thousands of jobs to remain in business, CAL would continue to reassess airfares in the periods ahead.

business@gleanerjm.com