The management of Cape Verde's air carrier Cabo Verde Airlines (CVA) told Lusa it has not yet paid December wages due to unspecified "reasons beyond the company's control."
In a press release sent to Lusa, CVA President Jens Bjarnason confirmed the delay in the payment of December wages, usually settled at the beginning of the month.
"Cabo Verde Airlines regrets that it has not paid its employees their December wages before Christmas," reads the press release.
It further states that this is not the first time December wages are paid after Christmas and that the "company has taken the necessary measures to secure payments before Christmas."
"But these did not materialize, for reasons beyond the company's control. The management regrets the effects this has had on its dedicated workers," Jens Bjarnason's statement reads.
It further states that Cabo Verde Airlines "will honor its contractual obligations to pay December wages before the end of the month" and that "any deviation from such obligations will certainly be communicated to employees in advance."
In March 2019, the government of Cape Verde sold 51% of the then TACV (Transportes Aéreos de Cabo Verde) for €1.3 million to Lofleidir Cabo Verde, a company that is 70% owned by Loftleidir Icelandic EHF and 30% by Icelandic entrepreneurs with experience in the aviation industry. The government had also planned to sell 10% of the company to workers and emigrants, and the remaining 39% to other investors.
For the Cape Verdean government, the alternative to privatization would be the company's liquidation, which would cost more than €181 million.
In an interview with Lusa in July, Cape Verde's prime minister said that this solution, which includes the so-called 'Sal hub', "creates viability" for the company, which before privatization represented a "monthly expenditure" of €3 million for the state.
"No country in the world with 500.000 inhabitants and a GDP of $4,000 per capita has a Boeing [previous TACV situation]. It has no scale, size or yield. TACV's big problem was the market. The 'hub' [in Sal] will create a market, a market of millions of people - in Brazil, Europe, America and Africa," said Ulisses Correia e Silva.
In the first eight months after the privatization process, the number of Cabo Verde Airlines passengers increased to almost 200.000, an 85.4% year-to-year increase compared to 2018.
Between March and October 2018, TACV carried 107.027 passengers, while in the same period this year, Cabo Verde Airlines had 198.457 passengers.
The company's fleet is comprised of three Boeing 757-200 airplanes, which connect the archipelago to Dakar, Lisbon, Paris, Milan, Rome, Boston, Fortaleza, Recife and Salvador. Cape Verde Airlines is now planning to expand the fleet with two additional Boeing 757-200 airliners.
Lusa has previously reported that Cape Verde Airlines expects profits of nearly €82 million this year - a figure that according to the airline's forecast and institutional information prepared for the ongoing sale of 7.65% of the company's equity to emigrants, is expected to multiply five times and reach €422 million by 2023.
According to the same data, CVA's directors expect a turnover of over 9,015 million escudos (€81.9 million) in 2019, which should increase to 23,473 million escudos (€213,2 million) in 2020 and over 46,450 million escudos (€422 million) in 2023.
The company's 2019 EBIDTA forecast (earnings before interest, taxes, depreciation, and amortization, used to gauge a company's competitiveness and efficiency) is still negative, standing at 3,485 million escudos (€31.6 million). However, it is expected to become positive in 2020 (914 million escudos; €8.3 million) and reach 3,491 million escudos (€31.7 million) in 2023.