Fabian Whorms, president and chief executive of Cayman Airways since 2009, will retire in December, the government-owned airline said on Tuesday, 29 September, the day before publication. The airline's board has not named a successor and said it would give details of the leadership transition "in due course".

Whorms joined the airline in 1995. The release said his retirement follows 31 years with Cayman Airways and a 43-year career in aviation, and described him as the longest-serving chief executive in the airline's history. It did not give his last day in post, say whether an acting chief executive will be appointed, or say whether the position will be advertised.

David Ritch, chairman of the Cayman Airways board, said in the release: "On behalf of the Board of Directors, I extend our sincere appreciation to Fabian for his exceptional service to Cayman Airways over the past 31 years. His dedication and leadership have made a lasting contribution to the National Airline and to the Cayman Islands. We congratulate him on an extraordinary 43-year career in aviation and wish him and his family every happiness in his retirement."

What the next chief executive inherits

Cayman Airways Limited has been wholly owned by the Cayman Islands Government (CIG) since 1977, and its board is appointed by Cabinet under the Public Authorities Act, according to the Office of the Auditor General's (OAG) March 2024 report on the airline's efficiency and effectiveness. Whoever succeeds Whorms takes charge of a company that the OAG found had reported deficits in each of the five years from 2018 to 2022, totalling around CI$34 million, and whose liabilities exceeded its assets by CI$25 million at December 2022. Over the same five years, the report said, the Government paid the airline CI$114.3 million in output funding for the routes it purchases and a further CI$34.0 million in equity injections. The OAG reported its figures in Cayman Islands dollars, converting the airline's US dollar accounts at CI$0.84 per US$.

The airline that Whorms leaves is larger than the one he took over. At December 2023, the OAG said, Cayman Airways flew non-stop from Grand Cayman to five U.S. cities, Miami, Tampa, New York, Denver and Los Angeles, and to six regional destinations, Kingston and Montego Bay in Jamaica, Havana, Bridgetown, Panama City and La Ceiba in Honduras. Its fleet of eight comprised four leased Boeing 737-8 MAX jets, two Saab 340 turboprops it owns, and two Twin Otters owned through its subsidiary Cayman Express, which serves Cayman Brac and Little Cayman. The report noted that the airline had told Parliament's Finance Committee in December 2023 that it planned to replace the Saabs, a decision that now falls to the next chief executive.

The auditors examined how the newer routes were chosen. They found the process used to select Los Angeles, launched in 2022, to be effective, but said the same process was not applied to Barbados in 2023 because that route sits in the surplus category of the Airlift Framework, which is not government-funded. The airline told the OAG that Barbados was added at the request of the Barbados Tourism Marketing Inc, which agreed in July 2023 to refund any shortfall against a minimum revenue threshold, and that it therefore expected the route to be profitable.

The auditors' central finding was about money. Cayman Airways operated 16 routes between 2018 and 2022, two of which consistently lost money. Counting each route in each year separately, 57 of 69 covered their variable costs, but only seven produced a net profit once fixed costs were included. The Government pays for what the report called strategic domestic, strategic tourism and core routes under an Airlift Framework agreed in 2009, but the OAG said the framework does not specify what the funding is meant to cover, that the airline requests the same sum every year despite its losses, and that it was "unclear why CAL is not fully funded for strategic domestic routes, which provide essential lifeline services across the three islands".

Whorms' own account of the framework

Whorms defended that arrangement, and explained its origin, when he gave evidence to the Public Accounts Committee on 6 June 2024. He told the committee that before 2009 the airline received output payments "often referred to as a 'subsidy'" with no framework for how the money should be used, "so it was a total fog; and that was a situation that existed for many years". He continued: "I'm very familiar with this because the airlift framework was born in 2009 when I first became the CEO, at a time when Chairman Jude Scott and the head of our financial sub-committee, Mr. Philip Rankin, both qualified accountants, probably did, at that time, the deepest dive that was ever done to look into this issue."

The framework, he said, put the emphasis on what the airline calls strategic operations, routes "that are not for profit, because they could not be profitable if we operated them and charged the fares that we should". He described the Sister Islands service as "probably the clearest example of a strategic service. It's an air bridge that requires a level of service where the revenues that can be generated from that level of service would not fund its operations, so it needs to be subsidised".

Asked why the airline should continue to be supported, he told members that other state-owned airlines had "gone by the wayside because they were not profitable" and that their economies had suffered as a result. "I think it is that overarching theme which has justified Cayman Airways' existence," he said, adding that the Government "has to continue to support Cayman Airways. To not do so would be foolhardy."

The fleet, the pandemic and the board

The same OAG report set out much of what happened on Whorms' watch. In 2016 the Government approved a fleet modernisation plan under which the airline's four Boeing 737-300 jets were replaced with the four leased 737-8 MAX aircraft, and the OAG found that all nine benefits the airline had expected from the new fleet, including more seats and lower fuel use, had been realised. Cayman Airways was the first airline in the world to ground its 737-8 MAX after the crashes in Indonesia and Ethiopia, the report said, and later negotiated compensation from Boeing for the period the aircraft were out of service between March 2019 and January 2021. During the COVID-19 pandemic the airline flew only repatriation flights between March 2020 and November 2021 and cut its workforce by around 20% through voluntary separation packages; it employed 360 people at December 2022.

Whorms told the committee that the MAX leases had been the subject of "a continuous perception that we entered into lease agreements that have taken away the birth-right of our grandchildren", and that the airline was "paying half the rent that the market dictates". He said he was "very happy that the Auditor General's Office decided to actually look at the Max procurement and the favourableness of the deal", and called the leases "good deals for Cayman Airways, good deals for the people of the Cayman Islands".

The OAG also found gaps in how the board oversaw its chief executive. It had recommended in 2013 that the board evaluate the president and chief executive's performance every year; the March 2024 report found that the board did not formally assess the chief executive between 2018 and 2022 and had started but not finished an assessment in 2023. "Therefore, it is unclear how the Board holds the CEO accountable for CAL's performance," the report said. The board endorsed the recommendation in its written response, dated 30 April 2024, and said it would be implemented. The report also recorded that the board was involved in drawing up the airline's two strategic plans between 2018 and 2022 but did not formally approve either; it approved the current Business Plan 2023-2028 in May 2023.

Pay, pensions and a retiring workforce

The auditors found no overarching workforce plan at an airline whose staff were mainly Caymanian and ageing, with around two-fifths of employees and more than a third of pilots aged 50 or over. Cayman Airways committed to adopt a workforce plan by 30 June 2024. Asked about it at the June 2024 hearing, Whorms told the committee: "We do exercise proper workforce planning," adding that "as we think about our threats to future operation, manpower planning is a big deal. How do we deal with retirements, turnover; so, we readily embrace that." Later in the same hearing, discussing staff pensions, he told the committee: "I, myself will be approaching retirement at some point."

Pay had already been reset. The OAG said Cabinet approved revised pay scales for the airline under section 47 of the Public Authorities Act from 1 December 2022, and a separate pilot pay scale in May 2023, applied from the same date, to keep pilots' pay competitive with other carriers. By December 2023 the airline had spent CI$2.6 million implementing the Act and estimated that full implementation of section 47, covering pensions and health insurance, would cost a further CI$3.5 million a year, subject to affordability.

The board that now has to replace Whorms was appointed by Cabinet in August 2021 for two years and extended in August 2023 for a further two, the OAG report said. Its chairman when Whorms appeared before the Public Accounts Committee in June 2024 was John-Paul Clarke; the release names Ritch as chairman, a role in which he also spoke at the airline's Austin route launch on 24 May 2026. Under the arrangements the OAG described, the airline signs an ownership agreement and a purchase agreement with Cabinet every two years as part of the budget, and the Ministry of Tourism and Ports approves the monthly output payments.

Cayman Airways told the OAG that it would work with the Ministry to revise the 2009 Airlift Framework, which the auditors said does not make clear what the Government's funding is intended to cover, and that the revision would be incorporated into the 2026-27 budget documents. That is the budget cycle, and the framework Whorms helped write, that his successor will inherit.