Cayman Airways is setting its sights on a string of possible new gateway cities including San Francisco, Seattle, Phoenix and Austin.
The airline is also considering investing in a third smaller Saab aircraft that could be used for regional short haul routes to the Dominican Republic or Montego Bay.
The plans were outlined by Tourism Minster Gary Rutty as he answered questions from MPs Wednesday, about his ministry’s budget.
Asked which new destinations the ministry was interested in for strategic tourism developments Rutty said, “Austin is on the radar screen”. He also highlighted the west coast cities as a potential area for expansion and said Cayman was aiming to reach 550,000 annual visitors from air arrivals in the medium term.
“Based on market research that we receive, we are looking also at Seattle, San Francisco and Phoenix,” he said.
Finance Minister Rolston Anglin clarified that those were “areas of interest” and more work would need to be done to make a final decision on which routes were viable.
Despite voting a total of $56.2 million over two years to the airline – a mix of tourism focused routes, domestic services to the sister islands and an equity injection – legislators expressed concern that Cayman Airways was underfunded given those ambitions.
Rutty acknowledged that in previous years budgets had been slightly larger but insisted “Cayman Airways is a business and we have to run it like a business.”
He did not rule out new revenue measures for the airline, despite concerns over the unpopular baggage fees.
“CAL has areas to create revenue other than selling seats. We have to look outside the box and implement them,” Rutty said, adding that management would be incentivised to find new income streams.
Flights less than 60% full
The airline’s CEO Fabian Whorms indicated that flights had an average load factor of 58%.
While he acknowledged this was well below many commercial carriers, he said the nature of some of Cayman’s routes was such that they were often full one way and almost empty coming back. He highlighted additional seasonal flights to Kingston, Jamaica as an example. Whorms said that some routes would never be commercially viable for CAL – even if they were full – while others make a profit at 40% load factor. He suggested the sweet spot would be an average of around 63%.
Those are routes that government effectively purchases from the airline to help support the tourism sector. Asked specifically about the Los Angeles route, he said it was covering its costs but could be doing better.
“When you look at the opportunity cost, it takes up an aeroplane essentially for a whole day… we would like to see better performance from that route,” Whorms added.
Rutty also referenced the possibility of purchasing a third Saab – the 34-seat turbo prop plane that operates between Grand Cayman and Cayman Brac. Under questioning from MP Chris Saunders he indicated it would be considered for short range routes within the Caribbean as well as back up to the two aircraft on the domestic route.
It wasn’t clear from the debate if the purchase or rental price of a new aircraft was included in the budget or if a supplementary appropriation would be needed.
Kenneth Bryan, the former tourism minister and now deputy leader of the opposition, was among those to express doubts over whether the airline had been allocated enough funds. He said Cayman Airways was an “economic necessity” for the island and questioned the ability to expand into new areas with less money.
The total budget over the next two years is just over $2million less than the previous two-year budget period.
“The money you are giving Cayman Airways right now, I don’t see how you can expand,” said Bryan.