Air Transport World

'Rightsizing' in the tropics. (Cayman Airways)(Company Profile)

Government cuts Cayman Airways' losses, cuts the airline's capacity in half and issues a profitability mandate

GRAND CAYMAN--Three years ago, Cayman Airways was a small airline--a David--gearing up to face off against the Goliaths coming down from the U.S. Today, it still is tiny, though its role appears to be to fly the Cayman flag, support government programs, bring in what tourists it can and --hopefully--lose no more money than necessary.

The shift in philosophy occurred in November, 1992, when a new government essentially altered the physical makeup of the airline and its role relative to the islands it serves.

At that time, the airline was losing $12-15 million per year trying to stay competitive with the likes of United and American. Capt. Kel Thompson, its managing director, was trying to expand the airline by adding aircraft, opening up its marketing activities in the U.S. and forming a code-sharing agreement with USAir (ATW,, 3/92).

The new government, however, decided to cut its loses. Thompson was forced out and replaced by Ray Wilson, who had retired as CEO of Aer Lingus Commuter and been brought in by the previous government as a consultant. As managing director, Wilson's mandate was to place the airline in a "least cost" mode. Once that was accomplished, he stepped down--though he retained his seat on the board--and was replaced by Senior Manager-Operations Michael T. Adam. The position at the head of the airline was downgraded from managing director to general manager. …

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