Andrew Green, Staff Reporter
Dr. Vincent Lawrence (left), the executive chairman of Air Jamaica, and O.K. Melhado, chairman of the airline's finance committee, at a press briefing yesterday at the Air Jamaica Building on Harbour Street, downtown Kingston. - RUDOLPH BROWN/CHIEF PHOTOGRAPHER
EXECUTIVE CHAIRMAN of Air Jamaica, Dr. Vin Lawrence, is calling on all its stakeholders to help keep the airline flying.
Staff and management are being called on to accept salary cuts, while its creditors are being asked to make concessions so that a refinancing plan can be put in place, Dr. Lawrence said yesterday. One of the biggest stakeholders in the airline is the Government of Jamaica.
"We have about US$800 million (J$49.3 billion) worth of liability," Dr. Lawrence said. About US$395 million (J$24.3 billion) of that must be paid back to the Government and its agencies.
"We have made submissions to the government and we think there is some preparedness to look at how that is dealt with," the executive chairman said at a press conference at the Air Jamaica headquarters, Harbour Street, downtown Kingston.
What is being considered is, "some methodology where it may be capitalised and turned to equity," he said.
Another US$365 million (J$22.5 billion) is owed to overseas creditors while approximately US$35 million (J$2.1 billion) is owed locally. This has been accumulated for fuel, aircraft leases and bank borrowing.
Air Jamaica is cutting its fleet from 20 to 15 aircraft, Lawrence said. This is a 25 per cent reduction.
Staff will be cut by a further 10 per cent which will see 300 jobs going.
A big issue now is with the well-paid pilots where 40 of the 220 crew members are slated to go. This amounts to an 18 per cent cut.
Negotiations were under way yesterday with The Jamaican Airline Pilots Association (JALPA) about a pay cut. "Based on what is being negotiated to date and the compromises the company is attempting to make so we can move forward, the base pay factors involves less than a six per cent reduction."
OTHER FACTORS AFFECTING PILOT INCOME
A number of other factors that affect the income of the pilots are also being negotiated. These include work rules, overtime, allowances and payment during leave of absence.
"I am appealing to all staff to come to the table so we can solve our problems now," Dr. Lawrence said. "The time for talk is over. The time for action has to be now."
A March deadline to put the airline's refinancing plan in place was missed because negotiations were incomplete with staff, the groups from which it leased its aircraft and its other creditors. There were also problems caused by new regulations requiring enhanced maintenance of its aircraft.
"In dealing with those issues we may have some tough times at hand," said Dr. Lawrence. "If we can't get the cost structure in line then we have to take the hard decisions."
