The delivery of four 160-seat fuel-efficient Boeing aircraft late next year will at last allow Cayman Airways to consider new routes throughout Canada, the U.S. and potentially South America and Central America.

Cayman Airways will lease the new 737-8Max aircraft rather than pay the US$110 million purchase price, counting on economies from their 15 percent fuel savings compared to the airline’s aging 737-300 and single 737-800 fleet. In fact, says CAL President and CEO Fabian Whorms, the 8Max’s 160 seats – 40 more than in the 300 series – will ultimately yield fuel savings “in excess of 30 percent – on a per-seat basis.”

He explains the acquisitions: “In 2016, Cayman Airways was operating a fleet of B737-300 aircraft, which would need to be retired between 2017 and 2020. The airline was therefore tasked with finding a replacement fleet and it was concluded that the larger ‘next generation’ B737-800 was the logical choice to replace the B737-300 aircraft.”

The “next generation” designation is Boeing’s third generation of 737 aircraft and includes the 800 series. Produced since 1996, the new aircraft are narrow-body, short- to medium-range jets, seating between 110 and 210 passengers.

“The airline then embarked on a search for the most affordable and suitable used B737-800 available for lease,” Whorms says.

The effort turned up a “once in lifetime” opportunity for a used B737-800 on a 2016-2018 lease, to be followed by the introduction of four new Boeing 737-8Max aircraft between 2018 and 2020, marking retirement of the B737-300s.

The calculations are complex, but mark the slow evolution of Cayman Airways from a tiny carrier flying a DC-3 turboprop to the Sister Islands in 1968 to a greater enterprise connecting a dozen cities in North America, Jamaica and Cuba, and newly ambitious plans for expansion.

Whorms hinted at 2018 and 2019 plans: “The new fleet will bring with it excellent opportunities for route expansion as the new fuel efficient B737-8Max aircraft have tremendous range, which puts most of North America, all of Central America and much of South America within the airline’s nonstop reach.”

He did not name destinations, but on Jan. 3 this year, the Department of Tourism announced “development of a Latin America business strategy to promote tourism to the Cayman Islands,” studying potential gateways in Bogota, Panama City and Rio de Janeiro.

A 2014 document by the Cayman Islands Airports Authority, which operates Grand Cayman’s Owen Roberts International Airport, Cayman Brac’s Charles Kirkconnell International Airport and the Little Cayman Airport, names 737-800 routes to Toronto, Calgary and Sao Paolo.

Whorms said Cayman Airways wants to determine “which new gateways will benefit our tourism industry the most, so as to take maximum advantages of the new fleet’s capabilities.”

Cayman Airways’ inaugural 737-8Max flight, he said, could come on Dec. 1 next year and would “likely combine … with an inaugural flight to a new gateway.”

The airline occupies a major slot in Cayman’s transport mix, making the islands a world-class tourist destination, boosting an industry that contributes approximately 70 percent of the island’s $2.5 billion GDP.

Whorms says CAL earns “approximately US$60 million/year in [passenger] revenue, $10 million in other sources and $20 million in services provided to, or on behalf of, government.”

He cites studies indicating Cayman Airways “on average, contributes in the region of $200 million to the local economy, from its local direct and indirect spend and from the expenditure of tourists that Cayman Airways brings to our shores.”

Government annually subsidizes the airline with a similar sum. Whorms notes that Cayman Airways “serves as a strategic competitor to most if not all of the airlines serving the Cayman Islands,” ensuring strong price competition and preventing “the monopolistic airline pricing that many small Caribbean nations struggle with. This in turn helps to keeps our tourism product competitive with other Caribbean tourist jurisdictions and also benefits our local consumers at the same time.”

The airline’s annual economic contribution, he says, justifies government’s annual subsidy as a “tenfold” return on its “investment.”

The airline also employs some 400 Cayman residents, he says, 95 percent of whom are Caymanian, in a variety of specialized professions “which would not be otherwise available within the Cayman Islands.”

CAL’s origins are anchored in the October 1945 creation by Pan American World Airways, the Costa Rican government and local private interests of Costa Rica’s national airline, LACSA, based in San Jose. LACSA launched operations June 1, 1946, and was designated Costa Rica’s national carrier in 1949.

In the mid-1950s, LACSA served Grand Cayman as an intermediate stop on its route between San Jose and Miami and occasionally Havana.

Whorms picks up the narrative: “In 1955, LACSA started a subsidiary company, Cayman Brac Airways, operating domestic passenger air service between Grand Cayman and Cayman Brac.”

In the early 1960s, LACSA added a Little Cayman “flag stop” – only when needed to service passengers or freight – on the 10-square-mile island’s grass airfield.

Cayman Brac Airways later added limited service between the Brac and Montego Bay, Jamaica, its sole international flight, Whorms said.

In August 1968, the Cayman Islands government bought 51 percent of LACSA, “as part of a strategic plan to improve connectivity to/from the islands. Limited service had been provided over the years … but only through the airline becoming truly Caymanian-owned could the focus of the airline be to strategically benefit the islands,” Whorms said. It boosted traditional seafaring links among regional, Central American and U.S. ports, encouraging trade, tourism and family connections.

Cayman Brac Airways was renamed Cayman Airways, operating a single DC-3, later serving Kingston, Jamaica, with an 119-seat British Aircraft Corp. 1-11, leased from LACSA.

In 1972, CAL inaugurated services to Miami; in December 1977, government bought LACSA’s remaining shares, designating CAL as the national flag carrier.

The airline acquired its first jet in 1978, launched service to Houston, and in 1982 gained its first Boeing 727-200, allowing introduction of first-class service.

During the 1980s Cayman Airways offered scheduled and charter service to Atlanta, Baltimore, Boston, Chicago, Detroit, Minneapolis, Newark, New York, Philadelphia, St. Louis, Kingston, Montego Bay and later, Panama City.

Through the years it has also served Miami, Tampa, Fort Lauderdale, Washington, D.C., Havana, Honduras’s La Ceiba and Roatan and, at one point, non-George Town-based services linking Miami and the Turks and Caicos. On Jan. 5 this year, CAL launched 737-800 charter service to Los Angeles.

Cayman Airways Express operates two Twin Otters and two Saab 340Bplus turboprops to the Sister Islands. Introduced between 2015 and 2016, the Swedish-built aircraft will ultimately replace the older Canadian-built planes, joining the 8Max aircraft as part of CAL’s fleet modernization.

“The importance of the air bridge to the Sister Islands should also not be underestimated,” Whorms says, “as this is an essential service necessary to keep the islands connected with each other,” providing both employment and economic activity.

The longer range of both the 8Max and 737-800 – compared to the 737-300 – has implications for Owen Roberts International Airport’s 7,008-foot runway.

The Cayman Islands Airports Authority planning document for 2014-2032 says the runway “is poised for a major redevelopment for completion in 2018,” indicating a preference for a 1,000-foot, $20.5 million westward extension and accommodating the longer hauls and heavier loads of the next generation aircraft.

A further 1,200-foot extension, creating a 9,200-foot runway, would mean an additional $21.5 million construction into North Sound.

Whorms said Cayman Airways “looks forward to this infrastructure improvement, which will allow the new B737-8Max fleet to capitalize on the aircraft’s long-range capabilities to the fullest while using lower thrust levels for takeoff, which has the economic benefit of reduced fuel consumption and extended engine life.”