PART THREE
The formal privatisation of BWIA kicked off with a lavish dinner function at the Trinidad Hilton ballroom in February 1998.
In attendance were representatives of the investors, the government, the four trade unions representing the BWIA employees and other stakeholders.
At the dinner, it was announced that Acker was selected as the chairman, president and CEO of the new BWIA.
It was also announced that Edward Wegel will be BWIA’s chief operations officer.
Conrad Aleong, the former CEO and a veteran airline executive who had expressed doubts about elements of the restructuring and business plan developed for the new BWIA, in particular, as it related to the proposed route structure and aircraft re-fleeting, was not named for a position.
The business plan incorporated a new schedule creating hubs in Port of Spain, Antigua, Barbados and London with distinct banks of flights allowing for on-line connections as well as connections to LIAT and other carriers. Unprofitable routes such as Frankfurt and Zurich would be dropped.
The plan also proposed to replace the Lockheed L1011-500 and the McDonald Douglas MD83 fleets with Boeing 757-200 and Boeing 767-300ER aircraft.
By the year 1999, the new fleet would have comprised of two Boeing 767-300ER, seven to nine Boeing 757-200 and two MD83 aircraft, primarily to serve smaller markets and/or develop new markets.
The new BWIA business plan projected a net income of approximately US$10.5 million and operating cash flows of US$21.0 million for 1995.
On September 30, 1994, an update to the business plan was issued. According to the update, discussions commenced for Boeing 767 and 757 airframe and engine orders. Further, a proposal was made to create a special purpose company (SPC), the shareholders of which will be Boeing, Pratt and Whitney and new BWIA to own two Boeing 757 and two Boeing 767 aircraft which will utilise manufacturer and the US Eximbank financing to lower BWIA cost of ownership.
Negotiations also commenced with ILFC and GECAS for leasing the additional Boeing 757 needed by the new BWIA.
The update stated that to ensure that all options were explored, a proposal was requested from Airbus for the procurement of a fleet of Airbus A320/A340 aircraft. This proposal was expected to be received in quick time in New York.
While the official head office was in Port of Spain per the privatisation agreement, a quasi-head office operated in New York.
Ex-Pan Am employees were hired including a manager, aircraft sales and acquisition. He brokered the sale of the BWIA-owned MD83 aircraft for US$16 million.
During the new BWIA’s first year of operation, several decisions were made that had a negative impact on its financial performance.
The first was a decision to acquire a used Boeing 727 passenger aircraft and convert it to a cargo freighter.
While the aircraft was undergoing conversion to a freighter at an aircraft modifications centre in Miami, the local BWIA Boeing 727 chief pilot did some route analysis studies.
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