As the news circulated that 88 Seaborne Airlines employees could lose their jobs because the company was pulling its corporate headquarters out of St. Croix to move to San Juan, Puerto Rico, Seaborne President and Chief Executive Officer Gary Foss said that it was meeting the Government Employees Retirement System’s demand to pay back by the end of Thursday the loan GERS made to Seaborne.
Foss said the airline wired on Thursday “in excess of $4 million” to GERS to settle its loan obligations. GERS put the amount owed at $4.3 million. Foss later phoned to say he wasn’t sure of the exact amount repaid since Seaborne was disputing “a few hundred thousand” in consulting fees.
Additionally he said that since earlier this year, Seaborne and GERS have been involved in negotiating a restructuring of a 2009/2012 loan agreement as part of broader discussions with the territorial government.
Foss said in the press release that those talks broke down last week and Seaborne promptly requested a payoff amount.
With the payment, the return on investment to GERS is more than 30 percent during the loan period, in keeping with their fiduciary obligations to their shareholders.
In 2009, GERS loaned Seaborne Airlines $3.3 million, with $1.3 million in the form of an ordinary loan and $2 million in a convertible loan; GERS had the option of converting the loan to a 40 percent ownership stake in the company. The loan had a five-year term.
It’s still too early to tell if the 88 Seaborne administrative employees who could be out of a job will relocate when Seaborne completes moving its corporate headquarters by March 22, Seaborne’s director of business development, Mike Ritzi, said Thursday.
Ritzi said that all 88 were offered jobs in San Juan and added that Seaborne will comply with the territory’s laws regarding severance for those who won’t make the move.
Ritzi stressed that Seaborne will continue to operate service from both Christiansted Seaplane Terminal and Henry E. Rohlsen Airport.
Foss later said that Seaborne will continue to provide sponsorship tickets to the territory’s organizations to use in fundraising. He said that last year, the airline provided 1,300 tickets to 290 organizations.
Ritzi said it makes administrative sense for Seaborne to make San Juan its corporate headquarters since it is the main hub for the airline. He also said the Puerto Rico government offered incentives.
In the Wednesday press release announcing the move to San Juan, Seaborne Puerto Rico will take an equity position in the airline and have two seats on the board of directors of the parent company of Seaborne, Coastal International Airways.
“Puerto Rico is rolling out the red carpet,” Foss said.
Seaborne said Wednesday it will create 400 jobs in Puerto Rico. A total of 150 of the 400 positions will be added in Puerto Rico in the first quarter of 2014. This will bring total Seaborne employment in Puerto Rico to 250 people.
Ritzi said 12,000 passengers a day move through San Juan airport, with many of them connecting to Caribbean destinations.
Seaborne has spent the past year taking up the slack left when American Eagle pulled out of the Caribbean in April.
“Those were mature markets,” Foss said.
Ritzi said the Seaborne expanded or has announced expansion to 10 new markets since December 2012.
“And we have more to announce coming up,” he said.
According to Ritzi, Seaborne is rebranding itself to bring things like its logo and uniforms more in line with national carriers American and JetBlue. Seaborne has interline agreements with those airlines, and Wednesday said it would soon start code sharing with Delta Airlines.
Again with this it shows how Gary Foss and Mike Ritzi have absolutely no bad feelings for their dedicated corporate employees. These employees work hard and long hours everyday to keep the airline operating. It is nice that they are offering them jobs in San Juan, however these people have families here and those that have school age children that don’t speak Spanish this really isn’t an option. Not sure what the severance by law is. But fully expect Gary and Mike and Dave Ziemer to only give the minimum required. Also the employees have until Jan 15th to decide if they will move. As of yesterday they were not advised of any assistance from Seaborne if they do decide to move. How can they make a proper decision without the exact options to them?
I heard yesterday that there might be a move by the Senators to not use Seaborne for any Government travel as they do today. I fully support this to show that there are ramifications when Seaborne, who has been supported by the people and Government of the VI for years is treated in this manner. There are other options for Government Travel and think they should be looked at by the Government.
Travel contracts should be bid out, and to exclude a company or person is only going to bring a lawsuit. Then again, most contracts are given to friends…
You should change your handle from “SaveSeaborne” to “KillSeaborne”…
By the way, I lived in PR for a very long while.. There are English speaking schools… and you will be surprised as to how willing people are to speak English… They are required to learn both in school… all it takes is will and some sense of adventure… So you see, there are options, maybe not for you, but for others who are not so negative, yes…
I also did fly with Seaborne a lot and had to call their office… Quite a few of their employees do speak Spanish or some Spanish…
As for how Seaborne got the money to pay GERS, well, it is none of our business…
Try to be nice… I had to relocate thanks to Hovensa’s closure… and I constantly travel back and forth to STX…
areuseriousstx?
Bias?It seems that any company or business that leaves or closes on STX after years of service suddenly becomes the enemy of the territory. First, your comment “these employees work hard and long hours everyday to keep the airline operating” makes them any different than any other employed person. That is what employees do for the company they work for, or do they just sit on their arses. Second, all around the world families relocate if they are willing to do so. If not, then you start updating your resume to look elsewhere for a job to replace the current one …it is not strange to do so. As far as the language barrier, pick up a second language considering a large part of your community does speak a second language…English or Spanish. We do teach Spanish in our schools, correct? I am sure “these school age children” may already have that part figured out…a no brainer.
Business decisions are made to benefit the bottom line, not a handful of disgruntle individuals on STX. In regards to the “gossip and hearsay”, our Senators are always on the retaliation when it comes to their “perqs and lined pockets”. Maybe now, the 6.9 million that went missing we be partially recovered due to all the personal flights made to PR/STT and wherever Seabourne landed. Why not try supporting entrepreneurship among our community, decreasing crime, government transparency, better health and farming…the list is long. Also, think about this; stop being so negative and outlandish…get the facts before “showing your full support”.
As for your statement that PR people like to speak English. That is not a true fact. I have been to PR many times and when you venture outside the airport people give you the cold shoulder when you speak English to them. Most of them just say “No English”.
Yes there are schools in PR that teach in English but they are private schools. Employees who do move there will have a large expense to make the move then add the cost of a private school. Would you not have an issue with this? As for my name I have for a long time been a supporter of Seaborne Airlines. Now with the change in their Management (Gary Foss) the Airline is no longer the Airline of the Virgin Islands. It’s the new rebranded American Eagle. Including moving to PR where American Eagle was based. Gary does not care about the Virgin Islands or its people because he knows he has all the former American Eagle people there he can employ. As with American Eagle I would fully expect Airfares to increase as they did with American Eagle when they flew to the VI. Bottom Line American Eagle left PR and the Caribbean. American Eagle and Gary Foss are the people to blame for this entire mess. As a resident of the VI I always have the interests of my fellow Cruzans in my heart. Which Gary Foss, Michael Ritzi and Dave Ziemer don’t. Please remember this affects 88 people here. Not to mention the timing….
Merry Christmas