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Stabroek News

The case against Air Jamaica
published: Friday | November 17, 2006

THE EDITOR, Sir:

Congratulations on your perceptive editorial on Air Jamaica in The Sunday Gleaner, November 5. I share your concern that Air Jamaica in its present structure and ownership may not be salvageable as a viable economic entity - it is a small fish in a big ocean with huge debts, the deadening hand of state ownership and on a steady downward trajectory.

Air Jamaica's history since privatisation in 1994, and over the past couple of years under government ownership, is powerful evidence to this effect - life as a small, stand alone airline is clearly not an economically viable option.

You make the point that in this age of globalisation, the raison d'etre for the creation of Air Jamaica - the protection of airlift for the tourism industry against the potential withdrawal of service by foreign airlines - is no longer valid.

New 'open-skies' regime

Again, the facts support your position. The Dominican Republic - with no national airline - has experienced stronger traffic growth in the United States market over the three years leading up to and including 2005, than has Jamaica (19.5 per cent 2003 - 9.3 per cent - 2004 - 8.4 per cent - 2005 vs Jamaica at respectively two per cent - four per cent and 3.4 per cent Source: US DOT International Air Passenger and Freight Statistics http:// ostpxweb.dot.gov/aviation/usstatreport.htm#Data).

Air Jamaica was established in 1968 in a regulated airline environment with only one airline from each country authorised to operate on any route, raising the very real possibility that that airline's economic priorities and problems could cause it to withdraw service from Jamaica with potentially devastating consequences. That is no longer the case. Now, we have an 'Open-Skies' regime under which any airline from either country can operate on any route between Jamaica and the U.S. It's the same with Canada, the United Kingdom and the European Union. The facts are there: history clearly shows with close to 40 years of consecutive, substantial losses funded by the hard-pressed Jamaican taxpayer under both state and private sector ownership - that the basic structure of Air Jamaica as a stand-alone airline is flawed and that it is a structurally non-viable entity.

It is time for a radical rethink of alternatives - but with an election in the offing and your recent Air Jamaica poll showing continued (though inexplicable) public support for continued government support to keep Air Jamaica aloft - what realistic chance is there of this Government taking the hard decisions required to stem the obscene losses as Jamaica tumbles down the Human Development Index.

I have long been a proponent of a regional airline combining the best of BWIA, LIAT and Air Jamaica and open to Cayman Airways and Bahamasair. Such an airline would have a good shot at commercial viability and private sector involvement. If that is not possible, the best alternative would be for an ownership involvement by a major U.S. airline - though they may be reluctant, given historical losses.

Re-election is paramount

Failing a structural solution along those lines to provide traffic feed and permit route rationalisation - the only option to avoid continuing losses in the hundreds of millions annually is closure - which would be a sad day indeed for Jamaica.

Radical cutbacks at Air Jamaica - as mooted - to a Miami/New York only operation with half a dozen aircraft - while they will reduce the losses - they will also remove Air Jamaica's raison d'etre - the support of the tourism sector - and will end up providing subsidised airlift to the better-off Jamaicans who can afford to fly overseas. The time for rational decisions has long since passed - unfortunately, political considerations seem to preclude such rational decisions - re-election is paramount!

I am, etc.,

JOHN P.T. GILMORE

2070 Boulevard De

Maisonneuve Ouest

Montreal, Quebec

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