The compensation package for the roughly 450 Caribbean Airlines employees who will be terminated in a restructuring exercise, is estimated to be somewhere in the vicinity of $110 million.
This is according to Finance Minister Colm Imbert, who told the Senate on Tuesday afternoon that the Airline does not have the funds to pay the severance packages, which will as a result, be managed by the Finance Ministry.
It follows an announcement by the company on Monday, that roughly 450 employees- which represents 25% of its workforce- will be axed as the company moves to “make itself sustainable for 2021 and beyond.”
Minister Imbert confirmed on Tuesday that the retrenchment exercise was currently at the consultation stage with the relevant stakeholders.
In addition to the compensation packages, Caribbean Airlines will also provide counseling services, outplacement services to be coordinated with the Ministry of Labour, as well as transition training, according to Minister Imbert.
How will CAL’s operations be impacted by reduced workforce?
Once CAL resumes its full service, it is expected that the reduced workforce and fleet will complement a projected decline in passenger demand.
Minister Imbert told the Upper House that he has been advised by the board of Caribbean Airlines, that passenger demand on its routes, as projected by IATA and its external consultants Amadeus, will decrease in the near future.
“I am advised that traffic is expected to return to pre-Covid levels in or around 2023- and this is based on advice from IATA and Amadeus,” Imbert explained.