Edmond Campbell, Senior News Coordinator

O.K. Melhado

Top executives of Air Jamaica will have to go back to the drawing board to devise a more credible business plan for the national airline, which has been faced with mounting debts.

The Air Jamaica board, led by Chairman O.K. Melhado and Chief Executive Officer Michael Conway, met with a Cabinet subcommittee on Air Jamaica, chaired by Finance and Planning Minister Dr. Omar Davies, earlier this week, to sell its latest business proposal aimed at keeping the airline afloat.

An effective scheme

However, at the end of the discussions the subcommittee instructed the Air Jamaica team to modify its recommendations and return with an effective scheme.

Addressing the weekly post-Cabinet press briefing at Jamaica House yesterday, Information Minister Donald Buchanan said the Government has maintained that the closure of Air Jamaica, which transports nearly 50 per cent of Jamaica's passengers and about a third of all tourists to the island, was not an option at this time.

Air Jamaica accumulated losses amounting to US$136 million in 2005. This prompted the International Monetary Fund (IMF), in its July report, to suggest radical decisions including closure.

"If Air Jamaica's restructuring plan failed to improve finances, the authorities may need to reconsider the merits of maintaining a flag carrier," the IMF said.

Downsizing

Mr. Buchanan, however, made it clear that the airline would have to work on a new business plan aimed at downsizing and eliminating unprofitable routes.

As part of its amended proposal, Air Jamaica is expected to provide options with respect to a change in the airline's fleet, and also to examine its current lease and sublease arrangements with a view to renegotiating new and more competitive rates.

The Information Minister told journalists that Cabinet is insisting that the board of Air Jamaica must minimise the airline's operating cost in keeping with the Government's annual commitment of US$30 million to the national carrier.

"What in effect the airline is being told is that you have to rationalise and reorganise to come within this ballpark figure," Minister Buchanan maintained, adding that the taxpayer would not be spending more on the airline.