Stewart THE EDITOR, Sir:
AS A founding member of the Air Jamaica Acquisition Group that negotiated the purchase of Air Jamaica from the Government of Jamaica, I have watched the development of the airline industry in the Caribbean region with interest. The present situation is clearly unsatisfactory losses all round funded by the taxpayer with no prospect of profitability. I would like to suggest an approach towards a solution.
The current problems being experienced by Air Jamaica, BWIA and LIAT all requiring immediate and substantial government support to sustain/ extend loss making operations may present an opportunity to get those airlines (through pressure from their government 'minority' shareholders) to agree on a first step towards an integrated airline system for the region, both internally and externally increasing efficiency, eliminating duplication and generating profitability.
An umbrella management integration an "Airlines of the Caribbean" grouping a step up from an alliance involving co-ordinated planning, scheduling, systems, purchasing etc. while leaving the operational identities intact could work well. It would need an experienced CEO, draw on existing management and function under the direction of a board drawn from the airlines and governments involved.
It would operate through agreement but would hold the government direct shareholdings and be able to vote them on commercial lines in conjunction with other shareholders - it would in effect have 'effective control' through that shareholding and over time bring a measure of rationalisation and integration to internal and external air services as well as significant economies from the enhanced scale and elimination of duplication.
The difficulty, as always on these regional matters, is that the opportunity arises because of the problem creating the opportunity: however, the problem is immediate and once the cheque is issued to fix the immediate problem, the opportunity is lost.
Decision making at the senior level here required generally involves lengthy and extensive analysis and compromise so that the eventual decision is too far delayed in time and watered down by compromise to be effective thereby tainting the solution initially proposed and indeed the overall objective in this case regional airline integration
The opportunity this time is clear: Air Jamaica needs US$70 million now; BWIA is on the brink and in need of immediate government funding; LIAT has just received government financial support but will need more. All the governments in the region have stated their support for 'integration'. The governments have the leverage.
The problem in a nutshell. There is a solution on which the governments agree integration. There is a mechanism "Airlines of the Caribbean" that will be politically acceptable and start the process in motion. There is a chance to make a decision.
The question is how to get an executive decision out of a non-executive body the heads of the various governments while the opportunity exists through the leverage provided by the current financial problems.
This problem has confounded better minds than mine. However, all the ingredients are there for a solution. Absent a solution, the citizens of the region will continue to cover he inevitable continuing losses and suffer from a fragmented airline system.
My thought would be that the "Airlines of the Caribbean" management be based in Barbados - which would give it geographical independence from the airlines involved in a country with good airline connections, an excellent infrastructure and no substantial economic interest in the airlines which are the subjects of the integration process.
I am etc.,
JOHN GILMORE
jptgilmore@hotmail.com
