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by Ross Sheil Online Co-ordinator rsheil@jamaicaobserver.com
Sunday, November 23, 2008
Low-budget Caribbean airline Airone Ventures Limited has criticised the Government for delaying its licence application to protect the divestment of the loss-making Air Jamaica, comparing the situation unfavourably with the previous People's National Party's (PNP's) administration liberalisation of the telecommunications sector
in 2000.
Airone have enjoyed cordial relationships with members of the current Jamaica Labour Party (JLP) Cabinet but have begun to publicly air their frustration in recent weeks.
Executives at the carrier, which is owned by Caribbean and Irish investors, told Sunday Finance that Government handling of the situation reflected narrow-minded economic policy that in their view could make Jamaica un-competitive and unattractive to foreign investors. Chairman Ian Burns, his son, Business Development Director Robbie Burns and Commercial Director Tara Playfair comparing their situation to a 'what if' scenario: had then telecommunications monopoly Cable & Wireless been allowed to use its monopoly status to prevent the liberalisation of its market.
Responsible for the Air Jamaica divestment, Minister of Finance (without portfolio) Don Wehby - Airone said that their comments came in response to his recent Senate State of the Nation address - told this newspaper that it would be inappropriate for him to comment.
"The position is that the issue of licensing airlines is with the Ministry of Transport and we have asked our international consultants to look at it and give to the Minister of Transport to review and until such time that we sit to discuss the report then I would prefer not to comment to the press," said Wehby. "This is a very unique situation and I'm not an expert about the airline industry and so I have to take advantage of the best experts and the likes of the World Bank to advise me."
Airone had previously been informed by Government that they could not be granted a license until the divestment of Air Jamaica, set for March 31,2009, so as not to deter potential investors in the loss-making national carrier. Airone then relocated its headquarters to Barbados from where it will launch service on 10 routes in the second half of 2009 and has modified its Jamaican license application to propose a launch at least year after the divestment deadline.
However Airone remains concerned that their application will still not be given a fair hearing given the political sensitivity of Air Jamaica, which is
the national flag carrier and preferred by many air travellers here and in the Diaspora.
"It's very much to me like the situation that happened with C&W. If C&W had even a quarter of the opportunity, position or power that Air Jamaica has then and mind you the taxpayers weren't keeping C&W afloat - C&W was bringing revenue back to Jamaica. But they were not allowed; can you imagine if they were on the Office of Utilities Regulation (OUR) board or allowed to make decisions that involved competition coming in, licenses being granted. Do you think that a Digicel or a MiPhone or any of the other ones here, any of the Internet companies, a Flow, anything that would have allowed for competition would have been allowed in and how fair would that have been to the public?" said Tara Playfair, commercial director of Airone.
Ian and Robbie Burns came to the Caribbean from their native Republic of Ireland, whose so-called 'Irish Tiger' model of economic success, which was referenced by Wehby. The Irish example previously inspired the tripartite 'Partnership for Progress' between Government, employers and trade unions, which helped inform the process of signing successive public sector wage restraint memorandums of understanding (MoUs). But the two Irishmen cautioned that Government would have to take similar steps to improve education and liberalise the economy in order to achieve such success.
""Obviously the airline issue is key but its just one of the cogs in the wheel to get the economy moving. There are so many issues that he (Wehby) is not even addressing or talking about and that if this is his thinking now, then where is this going to lead us in five years time? In the exact same state where we are now, where growth is running at about 1 per cent and really the economy is not going anywhere and Jamaica is in long need of a real boom time of between five and 10 per cent growth over a period of years to try and bring it back to where it was!" said Robbie, a former intern with Digicel, the Jamaican-based Irish-owned telecommunica-tions company.
He said that as an island economy both telecommunica-tions and airlift would prove critical for future economic growth in Jamaica. He also criticised the Government's plans to establish an international financial services centre (IFSC) as unrealistic and likely to prove un-competitive against more established competition from the likes of the Cayman Islands and the Bahamas.
Wehby said in his address that projections for economic growth next year have been cut from 3 to one per cent due to the impact of Tropical Storm Gustav and the global financial crisis. Wehby has projected growth rates of five per cent in several years. Concerning foreign direct investment (FDI) he has projected that the current level of US$866 million will rise to US$2 billion in several years.
Meanwhile losses at Air Jamaica are this year expected to exceed the US$170 million incurred in 2007, with the national carrier having already cost the taxpayer over US$1 billion.
Airone said that they shared the concern of the Bustamante Industrial Trade Union (BITU), which represents Air Jamaica workers, that there exists no 'plan B' should divestment fail. Air Jamaica has a 44 per cent share of airlifts to and from Jamaica. Their share includes 50 per cent of all Jamaican passengers and 31 per cent of all visitors.
"The deliverables for the divestment are clear. The Air Jamaica brand must be maintained; adequate airlift must be provided for the island; and the selected partner must have extensive airline experience, matched with the appropriate capital," said Wehby in his address.
Air Jamaica President and Chief Executive Officer, Bruce Noble has reported that the airline is in talks with several overseas companies that are interested in buying the state-owned carrier. Saying that Jamaica's two airports of Norman Manley in Kingston and Sangster in Montego Bay are operating beneath their current capacity Airone claim that it can bring 600,000 additional passengers to Jamaica during its first year of service.
http://www.jamaicaobserver.com/magaz..._APPROVAL_.asp
Sunday, November 23, 2008
Low-budget Caribbean airline Airone Ventures Limited has criticised the Government for delaying its licence application to protect the divestment of the loss-making Air Jamaica, comparing the situation unfavourably with the previous People's National Party's (PNP's) administration liberalisation of the telecommunications sector
in 2000.
Airone have enjoyed cordial relationships with members of the current Jamaica Labour Party (JLP) Cabinet but have begun to publicly air their frustration in recent weeks.
Executives at the carrier, which is owned by Caribbean and Irish investors, told Sunday Finance that Government handling of the situation reflected narrow-minded economic policy that in their view could make Jamaica un-competitive and unattractive to foreign investors. Chairman Ian Burns, his son, Business Development Director Robbie Burns and Commercial Director Tara Playfair comparing their situation to a 'what if' scenario: had then telecommunications monopoly Cable & Wireless been allowed to use its monopoly status to prevent the liberalisation of its market.
Responsible for the Air Jamaica divestment, Minister of Finance (without portfolio) Don Wehby - Airone said that their comments came in response to his recent Senate State of the Nation address - told this newspaper that it would be inappropriate for him to comment.
"The position is that the issue of licensing airlines is with the Ministry of Transport and we have asked our international consultants to look at it and give to the Minister of Transport to review and until such time that we sit to discuss the report then I would prefer not to comment to the press," said Wehby. "This is a very unique situation and I'm not an expert about the airline industry and so I have to take advantage of the best experts and the likes of the World Bank to advise me."
Airone had previously been informed by Government that they could not be granted a license until the divestment of Air Jamaica, set for March 31,2009, so as not to deter potential investors in the loss-making national carrier. Airone then relocated its headquarters to Barbados from where it will launch service on 10 routes in the second half of 2009 and has modified its Jamaican license application to propose a launch at least year after the divestment deadline.
However Airone remains concerned that their application will still not be given a fair hearing given the political sensitivity of Air Jamaica, which is
the national flag carrier and preferred by many air travellers here and in the Diaspora.
"It's very much to me like the situation that happened with C&W. If C&W had even a quarter of the opportunity, position or power that Air Jamaica has then and mind you the taxpayers weren't keeping C&W afloat - C&W was bringing revenue back to Jamaica. But they were not allowed; can you imagine if they were on the Office of Utilities Regulation (OUR) board or allowed to make decisions that involved competition coming in, licenses being granted. Do you think that a Digicel or a MiPhone or any of the other ones here, any of the Internet companies, a Flow, anything that would have allowed for competition would have been allowed in and how fair would that have been to the public?" said Tara Playfair, commercial director of Airone.
Ian and Robbie Burns came to the Caribbean from their native Republic of Ireland, whose so-called 'Irish Tiger' model of economic success, which was referenced by Wehby. The Irish example previously inspired the tripartite 'Partnership for Progress' between Government, employers and trade unions, which helped inform the process of signing successive public sector wage restraint memorandums of understanding (MoUs). But the two Irishmen cautioned that Government would have to take similar steps to improve education and liberalise the economy in order to achieve such success.
""Obviously the airline issue is key but its just one of the cogs in the wheel to get the economy moving. There are so many issues that he (Wehby) is not even addressing or talking about and that if this is his thinking now, then where is this going to lead us in five years time? In the exact same state where we are now, where growth is running at about 1 per cent and really the economy is not going anywhere and Jamaica is in long need of a real boom time of between five and 10 per cent growth over a period of years to try and bring it back to where it was!" said Robbie, a former intern with Digicel, the Jamaican-based Irish-owned telecommunica-tions company.
He said that as an island economy both telecommunica-tions and airlift would prove critical for future economic growth in Jamaica. He also criticised the Government's plans to establish an international financial services centre (IFSC) as unrealistic and likely to prove un-competitive against more established competition from the likes of the Cayman Islands and the Bahamas.
Wehby said in his address that projections for economic growth next year have been cut from 3 to one per cent due to the impact of Tropical Storm Gustav and the global financial crisis. Wehby has projected growth rates of five per cent in several years. Concerning foreign direct investment (FDI) he has projected that the current level of US$866 million will rise to US$2 billion in several years.
Meanwhile losses at Air Jamaica are this year expected to exceed the US$170 million incurred in 2007, with the national carrier having already cost the taxpayer over US$1 billion.
Airone said that they shared the concern of the Bustamante Industrial Trade Union (BITU), which represents Air Jamaica workers, that there exists no 'plan B' should divestment fail. Air Jamaica has a 44 per cent share of airlifts to and from Jamaica. Their share includes 50 per cent of all Jamaican passengers and 31 per cent of all visitors.
"The deliverables for the divestment are clear. The Air Jamaica brand must be maintained; adequate airlift must be provided for the island; and the selected partner must have extensive airline experience, matched with the appropriate capital," said Wehby in his address.
Air Jamaica President and Chief Executive Officer, Bruce Noble has reported that the airline is in talks with several overseas companies that are interested in buying the state-owned carrier. Saying that Jamaica's two airports of Norman Manley in Kingston and Sangster in Montego Bay are operating beneath their current capacity Airone claim that it can bring 600,000 additional passengers to Jamaica during its first year of service.
http://www.jamaicaobserver.com/magaz..._APPROVAL_.asp
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