- RICARDO MAKYN/STAFF PHOTOGRAPHER
From left, Christopher Zacca, deputy chairman ATL/Sandals Group, looks on while lawyer Winston Spaulding addresses the media at a press conference called by the former managers of Air Jamaica at ATL head office, 35 Half-Way Tree Road yesterday.
Dennise Williams, Staff Reporter
"STATEMENTS HAVE been made that give the impression that Air Jamaica was used to benefit the Sandals Hotel.
"We have nothing to hide and we are proud of how we managed Air Jamaica," Christopher Zacca, deputy chairman of the ATL/Sandals Group, one of the principals of the Air Jamaica Acquisition Group (AJAG), and former chief executive officer of Air Jamaica stated at a press conference held yesterday at ATL headquarters.
"We have deliberately refrained from saying anything about Air Jamaica since December 2004 when we turned the airline over to the Government.
"And we have nothing bad to say about the Government, our partner in the management of the airline for over ten years. We also have enjoyed a good relationship with the new board at Air Jamaica and we stand ready to assist them in the present and the future.
"However, people have taken our silence since December to malign the reputation of AJAG. We are prepared to defend our record."
Part of that defence is attorney Winston Spaulding, Queen's Counsel.
UNFOUNDED ALLEGATIONS
He added, "There have been scandalous and unfounded allegations of corruption and unfair trade practices in the operation of Air Jamaica without one shred of evidence to support such accusations.
"These include allegations of misdirecting or channelling funds from Air Jamaica for personal and corrupt reasons when there is absolutely no basis to such grave charges, which have criminal imputations. Gordon 'Butch' Stewart and his team do not consider themselves above criticism or scrutiny. However, the debate must be driven by truth and not untruth."
During the press conference Mr. Zacca outlined some of the accusations they found the most damaging.
Allegation #1 Sandals benefited unduly from the Air Jamaica connection.
"Suggestions that Air Jamaica was used as a loss leader for Sandals or enjoyed preferential status under the management of AJAG are unfounded.
"Apart from being the largest all-inclusive group in the Caribbean, Sandals is one of Air Jamaica's largest sources of business. There is nothing irregular about businesses extending concessions to their large clients.
CONCESSIONS TO SANDALS
"In fact, whatever concessions Air Jamaica offers to Sandals is minuscule, compared to the approximately US$40 million in revenue to Air Jamaica generated by Sandals guests who travel to Jamaica on Air Jamaica. Importantly, Sandals guests do not benefit from any special fare concessions from Air Jamaica."
Mr. Zacca stated that both companies enjoyed a reciprocal relationship.
"Air Jamaica staff stayed at Sandals free of charge whenever they were on duty in any location where there is a Sandals hotel. Air Jamaica Limited as well as its staff enjoyed discounts on cars purchased from ATL Motors.
"Similarly, they were entitled to discounts on air conditioners, appliances and electronic items purchased from Appliance Traders and Business Management Limited. Likewise, Sandals personnel on business travel benefited from a discount on airfare.
"Given the cost of an average Sandals room compared to an airline ticket, it was Air Jamaica that enjoyed the net benefit, not Sandals."
Allegation #2 Route structure designed to benefit Sandals Hotels.
Mr. Zacca insists, "Airlines make money by flying to destinations where people want to go. The fact is that route decisions could not and were not made arbitrarily. They had to be sanction by the board of directors, which included representatives of all the shareholders, including the government.
"Prior to the change in management, Air Jamaica and Air Jamaica Express provided airlift to 12 Caribbean destinations outside of Jamaica. Sandals operate in only five of the 12 destinations.
"SuperClubs also operate in five Caribbean destinations served by Air Jamaica. Significantly, Air Jamaica provides service to Curacao and the Dominican Republic where there are Superclubs resorts but no Sandals resorts.
"This explodes the fallacy that the airline's route structure was manipulated to serve Sandal's interest."
Allegation #3 Air Jamaica offered concessionary fares for Sandals Honeymoon promotion.
Mr. Zacca states, "The issues of contention appear to be the concessionary airfares that are extended to participants and the perception that the promotion constitutes an unfair advantage to some hotels.
"These honeymoon promotions are arranged to coincide with seasonal slow periods and under no circumstances is there any displacement of revenue.
"To the contrary, these promotions fill seats that would otherwise be empty in the first instance; and at the same time ties up future business at the full fare for the airline.
"Clearly, this is a win-win situation for Air Jamaica. Sandals' Test Drive Your Honeymoon or Superclubs Honeymoon and Vacation Headstart promotions are available to all players in the industry, provided they are prepared to absorb the associated costs."
Allegation #4 Improper selection and payment of an advertising agency.
Mr. Zacca stated, "AJAG has noted reports in sections of the media regarding the probity of Hunter Hamersmith's appointment as Air Jamaica's advertising agency. These reports are misleading and malicious. The agency was appointed with the full knowledge and endorsement of the board of directors in August 1995.
"References to the amounts paid to the agency for its services have also been grossly overstated. The total amount allocated to Hunter Hamersmith for its entire 10-year association with Air Jamaica is approximately US$25 million."
