Surinam Airways renewal plan and CEO’s challenges

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Surinam Airways renewal plan and CEO’s challenges

Unread post by bimjim » Tue Oct 09, 2018 ... hallenges/

Surinam Airways renewal plan and CEO’s challenges
Ray Chickrie Caribbean News Now contributor
October 8, 2018


Minister of public works, transport and communication, Patrick Penge, has told the Suriname Star News that the government expects to receive Surinam Airways’ (SLM) renewal plan in two weeks, which will demonstrate how the management plans to turn around the state-owned airline that has been unprofitable for decades and surviving on government subsidies.

The plans are painful because there will be layoffs. The airline has had an inflated staff. Also, SLM will sell unprofitable holdings like the Residence Inn Hotel in Paramaribo and some services will be outsourced.

The minister does not expect SLM to become profitable but wants to see losses cut. The government is the biggest creditor of SLM. The indirect subsidy that is given to SLM can’t continue, Penge said.

CEO Gerard La, new at the helm of the company, has been given three years to make a profit but, with too many unofficial “directors” behind the scenes, the atmosphere and ability to act fast and decisively will demonstrate how Lau will push ahead and be his own man. The board and its head is part of SLM’s “backward thinking”, according to many residents.

The board doesn’t “see outside the box; they do not know what is going on in the outside world of aviation and tourism,” one source said. “They all think they know it all.”

There is finally certainty that SLM’s fleet will be expanded and renewed. Only through expansion and use of more efficient aircraft and with government’s financial backing of the Renewal Plan 2018 can the airline be turned around. It is not yet public what the government has promised the company; however, it is the government’s backing of securing funds for fleet renewal and route expansion that the airline needs.

A renewal plan existed before but was not given a chance due to random changes and political interference, as well as interference from the board. How strong Lau is to push back against strong personalities on the board and his ability to act without having a “de facto CEO” looking over his shoulder will determine how long his future at the airline will be.

The company had a plan to double its fleet with more efficient aircraft and there have been ongoing discussions about increasing frequency by adding two smaller feeder aircraft to the Paramaribo hub.

The airline has struggled to market the Amsterdam route in Guyana, Trinidad and elsewhere the airline flies. It’s been a goal of the company to connect the network smoothly. However, this will require more aircraft and a modern airport.

Passengers coming from India and China to Suriname, Guyana and Trinidad must spend long hours or days to connect from PBM to GEO or POS and the airport is very “Spartan”. However, there is ongoing rehabilitation and there are plans for expansion and modernization of the airport to be completed by China Harbour Engineering Company (CHEC).

The airline intends to move to twin-engine (E-TOPS) on the mid-Atlantic route to Amsterdam and is eyeing the Airbus A330 or Boeing 787. SLM is expected to receive another Boeing 737-700 in November and will add up to three more aircraft to bring the total fleet to six by the end of 2019. By 2020, the company expects to see its losses cut.

The airline wants to market Suriname as a tourism destination and plans to collaborate with tour operators, the transportation minister said.

The foreign minister of Suriname, Yldiz Pollack-Beighle, is working hard to help SLM realize its dream and is forging ahead to conclude many air agreements. Pollack-Beighle became the first Suriname foreign minister to take on the task of working with SLM, aviation and transportation and the private sector to grow tourism in Suriname.

She discussed the issue during an address at last month’s United Nations General Assembly. She is also taking measures to bring more tourists to Suriname by removing visa requirements for many countries. Suriname expects to have an e-visa platform operational soon to boost the tourism sector.

Pollack-Beighle is also working to seal some important air agreements with Ghana, Panama, Morocco, Russia, Serbia, Turkey, Ethiopia, South Africa, Kenya, Qatar, the UAE, China, Colombia and Brazil, and also to modify existing agreements.

New York City is one of SLM’s future destinations, and it did fly to NYC decades ago but did little marketing. But now the airline is looking at the Guyana market to increase its revenue and traffic. SLM also plans to increase frequency and expand routes to other places in Brazil, the Caribbean and, with two aircraft on the mid-Atlantic route, it could expand the European route to Port of Spain, Guyana, the ABC islands (Aruba, Bonaire and Curacao) and North Brazil. It could also transport passengers from Miami and NYC, via Suriname or Guyana, to West Africa.

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