At the Public Accounts Committee hearing on June 6, 2024, Fabian Whorms, the President and CEO of Cayman Airways, explained the arrangement between Cayman Airways and the Barbados Government (through Barbados Tourism Marketing Inc.). This was during the discussion of the Auditor General’s report entitled “Efficiency and Effectiveness of Cayman Airways Ltd.”

He seemed to be very upset of the public’s persistent perception of Cayman Airways having to carry a heavy financial burden in flying the route and no due diligence was executed before it went ahead. He wanted this perception to stop as it “plagued” him.

He said, “The issue with Barbados from the very beginning in my mind was that there would be perception issues. There would be issues with optics, and I knew it would be a challenge to address those issues with the public because the only way to address it is to actually come out and say how much money we are making.”

Whorms emphasized that the agreement between Cayman Airways and Barbados was not entered into blindly. 

“In fact,” he said, “it was reviewed and approved by members of the board of directors of Cayman Airways.  We went into it with five or six key objectives, that those criteria had to be met.

“I can say what they are.  One of which is, because it fits into what we call the surplus category of our airlift framework, it means that we would not do it to the detriment of the rest of our service. There should be no opportunity cost. So operating these flights should not in any way hinder any of our current service or our future plans.

“So, you will find that these flights were scheduled on days of the week and times of the day when it had no impact. There’s nothing else we would have done with the aircraft or our crews. So putting the aircraft and crews to use in a scenario where we’re guaranteed to cover our variable costs and also guaranteed to cover our fully allocated costs. And many of our routes do not cover their fully allocated costs, so they operate profitably when you look at the direct variable coverage, but not profitably when it’s fully allocated.”

There was a lengthy discussion on payments Cayman Airways received from BTMI. It was not exactly clear whether payments were delayed, or payments were not accepted, or excessive.

“The payments were in good order,” he said. “There is a quarterly payment schedule. When we look at the duration of time that the service will operate, we have already collected 70% of the revenues that are to be generated from the root. And bear in mind that the revenue comes from two places. 

“It comes from the actual ticket sales first, and if that number falls short of the specified revenue target, which guarantees us a profit, then BTMI tops that up.”

He added that BTMI “has contributed positively to Cayman Airways.””It was all done to the same high standard that we do everything, and we have entered into much more sophisticated contractual arrangements than this one. So it was not a challenge for us to put in place the terms that we wanted. We built into it a margin of profit that was consistent with the margins that we build into any charter service that we do. So although it was not officially called a charter, in essence, the application of it was no different from a charter.”

“We have made a level of profit from this venture,” he continued, “which assures us that if we find ourselves in a situation where we need to go to the Cayman Islands government  and say we have a shortfall that we need to bridge, for whatever reason for this fiscal year, we know that that number is now going to be so much smaller because we can apply the profits that was earned from this.

“The contribution made to Cayman Airways relieves essentially some of the burden that the Cayman Islands government was solely carrying” in relation to the cost of operating Cayman Airways.”

We ensured we went into a contract that was secure in every way possible.

This is to protect our ability to receive payment.