Thoughts on Caribbean Airlines decision to purchase the Boeing 737 max

The Covid-19 pandemic brought with it many lessons, one of which is, we must be willing to think ahead and be innovative in our business models if we are to remain resilient. This, I believe is partly the reason behind the decision Caribbean Airlines took by going ahead with the acquisition of the Boeing 737 max.

I am in agreement of the decision to purchase the aircraft, once the acquisition is supported by certain actions. The current market, due to covid-19 has slowed air traffic. Travel and tourism have declined, which resulted in persons losing jobs and most business trying to stay afloat. However, this is expected to change, with a significant increase in air traffic expected to take place towards the end of 2023 into 2024.

This means that though now it may seem like a burden or added cost to Caribbean Airlines to go through with the purchase, due to the stress of the fixed cost of operation, that is, having to find money to continue operation of the current fleet, pay salaries and incur other cost, they must plan ahead and look to the future with a business mindset that, after what may be considered now as a recession, what comes next is the expansion phase and they must choose to be prepared for that or be left behind. The perks of being equipped with better, more reliable, and cost-efficient aircraft will soon prevail.

It’s also expected that when we are back to some sort of normalcy, especially with the introduction of the several COVID-19 vaccines and testing available, that persons are going to take the opportunity to travel more. This increase in demand would do good for Caribbean Airlines as it could mean more revenue.

Caribbean Airlines can also look into expanding by introducing more routes, this increases the level of connectivity offered which could be the beginning of acquiring a greater market share. The added benefit of these newer aircraft is the reduction in maintenance cost which would consequently benefit the net profits earned. The new aircraft also promises to be more fuel efficient, boast new technology and design with upgraded comfort.

These upgrades from what they currently have, would then give them the freedom to create new products within the airlines and extract more revenue. They can offermore quality seating (probably first class) and in-flight dining options. This in my opinion should be Caribbean Airlines prime marketing product.

Now, I believe that though Caribbean Airlines has the greatest intentions by acquiring these new aircraft and have the potential to stand out as the better competitor consequently earning more revenue, they must start working on convincing us the customers. The stigma surrounding the aircraft if not addressed can negatively affect Caribbean airlines traffic and consequently, revenue. This can affect the entire company as it can become costly to maintain aircraft that are not being used to gain revenue thus reducing the company’s net profits. However, my advice to combat this would be to develop a proper marketing strategy.

Marketing is one of the most crucial strategy to acquiring customers and ensuring your business is successful when undertaking new ventures, and I believe that is what this time can be used for. Caribbean Airlines should use this time when people may be more attentive to invest in educating the customers about the new fleet, reassuring them that it was a well thought of decision to acquire and that their safety remains priority. It would be good to start seeing polls on the various social media, question and answer segments by Caribbean Airlines maintenance engineers and pilots, and videos of the upgraded product. This I believe, would reassure customers.

Tavio Simmons