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Air Jamaica: Time's up
published: Friday | June 13, 2008
Dennie Quill, Contributor
Notwithstanding the fact that Air Jamaica representatives kept up a brave front during a recent event to celebrate daily Orlando flights, one cannot help sensing that the end is near for the national carrier. No, it's not just the soaring fuel bill which reportedly eats up nearly 30 per cent of the airline's operating cost, nor is it the fact that the powerful unions are yapping at the heels of management to secure better wages for employees. It's not just the fact that the airline which has been haemorrhaging for years chalked up losses of more than US$170 million last year.
Stinging passenger reviews
Nor is it because there have been stinging passenger reviews of deteriorating service, including delays, cancellations, lost baggage and poor customer service. The truth is the time has come for Government to decide whether its primary responsibility is to protect the taxpayers or the Air Jamaica board and employees.
Yes, we get all sentimental when we talk about the, oh so smooth Air Jamaica landings. And many Jamaicans feel a sense of proprietorship when they settle into their seats on an Air Jamaica airplane. However, the drag on the budget has made the airline one constant sigh-inducing issue for every administration since 1966.
Flirting with insolvency
It is recognised that air travel is an instrument of economic and social development, and further that Jamaican is highly dependent on tourism. Many ask: without a national airline how does the Government guarantee more frequency and cargo capacity to and from Jamaica? And with its more than 300 flights weekly, Air Jamaica now ensures the movement of agricultural and other produce, as well as people. Fact is, Air Jamaica has been flirting with insolvency for a long time.
I had a long discussion on the future of Air Jamaica with a young economist. He was unequivocal in his response. Government has no business running an airline, nor should it expect the hard-pressed taxpayer to prop up a money-losing entity. He said the chronic inefficiencies of Air Jamaica have gone unpunished and a company that cannot cover its out-of-pocket operating costs should be out of business.
The young man argued forcefully that air transport is a luxury, and that the majority of Jamaicans who have never seen the inside of an aircraft are making the ultimate sacrifice when their tax dollars are used to subsidise the ailing carrier.
Fighting for survival
He scoffed at Air Jamaica's boast that it still allows two free pieces of luggage, provides free meals and earphones (when they work). He said airlines fighting for survival have had to put in these measures, but since GOJ is always there to cushion the runway for Air Jamaica, it feels no pressure to find creative ways of slashing expenses. There was a time when airline passengers dressed up and were served dinner on china by white-gloved attendants. Those days are gone. Passengers are now seeking reliable, secure and cheap means of getting to their destinations. All this coming from someone who is under 30, which means the massive public subsidy of Air Jamaica has been going on before he was born.
Airlines in bankruptcy
The roster of bankrupt airlines is growing. One recent example is Aloha Airlines, which was founded in 1946 to give the Hawaiian people a choice in inter-island travel. Like us, tourism is Hawaii's top business, but competition by more efficient carriers drove the carrier out of the passenger business while they continue to operate a cargo service. Industry analysts predict that more airlines will seek shelter in bankruptcy courts or fold.
My economist friend cited the rise of an agile class of discount airlines, Spirit being one of them, who under the current Open Skies regime will go to any destination once demand justifies airlift. He declared that any decline in capacity will be offset by these savvy operators. Guyana which buried its national airline years ago, recently lost the service of North American Airline too, but three carriers have stepped in to fill the breach.
Groundswell of support
So, Air Jamaica is to be divested again. As the March 2009 deadline comes along I expect a groundswell of support from the local community and the diaspora. But will Air Jamaica last until a qualified buyer is found? And given its perilous state will it ever find an investor?
What is plan B? The old merger argument is back on the table, and one expects that when the regional heads meet for their CARICOM summit in a few weeks they will talk about reduced airlift to the Caribbean and the way forward. They have been talking like this for years - without action. So could there be a regional solution?
Dennie Quill is a veteran journalist who may be reached at denniequill@hotmail.com. for feedback columns@gleanerjm.com
published: Friday | June 13, 2008
Dennie Quill, Contributor
Notwithstanding the fact that Air Jamaica representatives kept up a brave front during a recent event to celebrate daily Orlando flights, one cannot help sensing that the end is near for the national carrier. No, it's not just the soaring fuel bill which reportedly eats up nearly 30 per cent of the airline's operating cost, nor is it the fact that the powerful unions are yapping at the heels of management to secure better wages for employees. It's not just the fact that the airline which has been haemorrhaging for years chalked up losses of more than US$170 million last year.
Stinging passenger reviews
Nor is it because there have been stinging passenger reviews of deteriorating service, including delays, cancellations, lost baggage and poor customer service. The truth is the time has come for Government to decide whether its primary responsibility is to protect the taxpayers or the Air Jamaica board and employees.
Yes, we get all sentimental when we talk about the, oh so smooth Air Jamaica landings. And many Jamaicans feel a sense of proprietorship when they settle into their seats on an Air Jamaica airplane. However, the drag on the budget has made the airline one constant sigh-inducing issue for every administration since 1966.
Flirting with insolvency
It is recognised that air travel is an instrument of economic and social development, and further that Jamaican is highly dependent on tourism. Many ask: without a national airline how does the Government guarantee more frequency and cargo capacity to and from Jamaica? And with its more than 300 flights weekly, Air Jamaica now ensures the movement of agricultural and other produce, as well as people. Fact is, Air Jamaica has been flirting with insolvency for a long time.
I had a long discussion on the future of Air Jamaica with a young economist. He was unequivocal in his response. Government has no business running an airline, nor should it expect the hard-pressed taxpayer to prop up a money-losing entity. He said the chronic inefficiencies of Air Jamaica have gone unpunished and a company that cannot cover its out-of-pocket operating costs should be out of business.
The young man argued forcefully that air transport is a luxury, and that the majority of Jamaicans who have never seen the inside of an aircraft are making the ultimate sacrifice when their tax dollars are used to subsidise the ailing carrier.
Fighting for survival
He scoffed at Air Jamaica's boast that it still allows two free pieces of luggage, provides free meals and earphones (when they work). He said airlines fighting for survival have had to put in these measures, but since GOJ is always there to cushion the runway for Air Jamaica, it feels no pressure to find creative ways of slashing expenses. There was a time when airline passengers dressed up and were served dinner on china by white-gloved attendants. Those days are gone. Passengers are now seeking reliable, secure and cheap means of getting to their destinations. All this coming from someone who is under 30, which means the massive public subsidy of Air Jamaica has been going on before he was born.
Airlines in bankruptcy
The roster of bankrupt airlines is growing. One recent example is Aloha Airlines, which was founded in 1946 to give the Hawaiian people a choice in inter-island travel. Like us, tourism is Hawaii's top business, but competition by more efficient carriers drove the carrier out of the passenger business while they continue to operate a cargo service. Industry analysts predict that more airlines will seek shelter in bankruptcy courts or fold.
My economist friend cited the rise of an agile class of discount airlines, Spirit being one of them, who under the current Open Skies regime will go to any destination once demand justifies airlift. He declared that any decline in capacity will be offset by these savvy operators. Guyana which buried its national airline years ago, recently lost the service of North American Airline too, but three carriers have stepped in to fill the breach.
Groundswell of support
So, Air Jamaica is to be divested again. As the March 2009 deadline comes along I expect a groundswell of support from the local community and the diaspora. But will Air Jamaica last until a qualified buyer is found? And given its perilous state will it ever find an investor?
What is plan B? The old merger argument is back on the table, and one expects that when the regional heads meet for their CARICOM summit in a few weeks they will talk about reduced airlift to the Caribbean and the way forward. They have been talking like this for years - without action. So could there be a regional solution?
Dennie Quill is a veteran journalist who may be reached at denniequill@hotmail.com. for feedback columns@gleanerjm.com
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