AIR JAMAICA is projected to lose US$74.18 million this year, according to the Ministry of Finance.
This is an improvement of $61.76 million, or 45.43 per cent on the US$135.94 million loss reported for the previous year, the ministry stated. In 2004, the airline lost US$83 million.
The improvement this year is to be generated primarily from a $45.39 million, or 13.36 per cent boost in passenger revenue, the ministry stated in this year's budget estimates for public sector companies.
Last year, Minister of Finance and Planning, Dr. Omar Davies, had said the airline's losses would be capped at US$30 million per year.
Since resuming control of Air Jamaica in December 2004, the Government has embarked on a major restructuring programme to rationalise route network, reduce costs, inject new capital and refinance short-term bank debts.
SUFFERED SETBACK
The restructuring programme suffered some setback during 2005 with the grounding of the fleet for accelerated maintenance and continuing increase in oil prices.
Following on the fallout suffered in 2005, primarily from the grounding of the fleet, the airline is faced with the challenge of recovering lost passengers and hence improving revenue amid challenges of intense route competition with the entry of low cost carriers out of profitable U.S. gateways into the island, high fuel prices and high fixed costs, the ministry stated.
AGGRESSIVE MARKETING
To overcome these challenges the airline will pursue improved aircraft utilisation from eight hours per day to 12 hours per day, continuing service reliability and route rationalisation.
An aggressive marketing programme will be launched to assist in the recovery of passenger numbers.
Based on the strategies to be pursued Air Jamaica will realise revenues of US$433 million, compared with US$385 million for 2005, while operating expenses are projected to fall by $20.03 million or 4.09 per cent from the previous year.
This change is based mainly on reductions in aircraft lease, costs associated with the grounding of the fleet for accelerated maintenance during 2005, rental of aircraft spares and professional fees.
