send us information about another airline's problems. This week, in response to our editorial on the sell-off of financially troubled BWIA International and LIAT Ltd., basically owned by the government of Trinidad and having lost some US$160 million in the last five years, we received cuttings from the Caymanian Compass of Monday, June 29, about problems with Cayman Airways. That airline is called "technically insolvent''.

Shadow Minister of Tourism Mr. David Allen has repeatedly suggested a Bermuda airline as a solution for Bermuda's airline seats problem and as a boost for tourism, implying that if only we had a local airline our visitor problems would be eased. He has suggested that Bermuda should have its own seat availability because places like the Cayman Islands and the Bahamas have their own airlines.

The Caymanian Compass, the leading paper of the Cayman Islands, said the audited financial statements of Cayman Airways were tabled in the legislative Assembly on June 26, over six months late, and showed an operating loss of just over US$8 million for the year ending June 30, 1991.

The Cayman government issued guarantees to the airline's bank to secure credit of US$8.4 million and to the company from which the aircraft are chartered for US$6.6 million. Mr. David Allen has repeatedly stressed that Bermuda need not invest huge amounts of money because the local airline could operate with leased aircraft. He told this newspaper that this is a very good time for leasing aircraft because the airline industry in general is weak. Leasing aircraft to save big bucks appears to be what Cayman Airways did but perhaps Mr. Allen does not think the millions quoted are large sums. Cayman Airways is a hot political football in the Cayman Islands and one which causes constant controversy. The Compass says that the airline made a total loss for that year of US$14.3 million when interest, the cost of terminating aircraft leases and other expenses are included.

The liabilities of Cayman Airways exceed its assets by US$16.5 million and it is "technically insolvent''.

The Compass says the airline is totally dependent on the financial support of the government if it is to be able to discharge its obligations and continue as a going concern.

An airline industry analyst who helped to do an independent study of Cayman Airways has said in Cayman that the airline needs about US$20 million to recapitalise. The analyst has called the future of Cayman Airways "bleak'' if it is not recapitalised.

The truth is that Cayman Airways, like any other airline, has to compete with the big boys in a declining market and the going is tough. It would not be any different for a Bermudian airline no matter how we structured it.

We think that Bermuda should be thankful that we have never bowed to political pressure and are not in the airline business, private or government run, because the drain on Bermuda would be enormous.