Air Jamaica in Jeopardy of Closure

The cash-strapped airline Air Jamaica could be closed down as part of the restructuring exercise, warned Vin Lawrence, chairman of the restructuring group, who did not rule out a recommendation of that sort when the team presents its findings to Prime Minister Percival J. Patterson at the end of next month.

Mr Lawrence said recent checks by aviation restructuring experts have shown that the airline is in a worse position than had been originally thought and its present losses cannot be sustained.

While the airline continues to enjoy the goodwill of many passengers, he said, keeping it flying at a huge financial burden might not be practical.

Last year the airline had operating costs of US$530 million, a figure that

exceeded its revenue of just over US$460-million. Air Jamaica said it was seeking to cut expenses to US$470-million, while keeping revenue almost constant.

The airline is also struggling to deal with debts of US$ 13

million US$6.4 million owed to the Jamaica government alone.

Air Jamaica is also seeking to refinance its US$280 million debt, but

officials say this would depend on the management´s ability to convince

investors that it has a workable plan to move the airline into

profitability.

Last week, Air Jamaica sent home 40 pilots under its restructuring

program.

On the other hand, the National Workers Union (NWU) has said it will initiate major protests if the Jamaica government accepts a recommendation for the financially troubled Air Jamaica to cease operations.

The union, which represents various categories of Air Jamaica workers, said the airline´s closure would result in at least 3,000 persons losing their jobs.

The NWU blamed the airline´s interim management for not doing a good job in restructuring the financially plagued airline.

The Idea of a Caribbean Regional Airline is on the Air

The idea of a Caribbean regional airline popped up at the 7th Sustainable Tourism Conference taking place in Scarborough, Trinidad-Tobago, as the best way to solve air transportation problems.

Trinidad-Tobago´s Tourism Minister Howard Chin Lee told the conference that he believes a viable regional carrier is necessary, and the region could not have a sustainable tourism industry without a sustainable Caribbean airline.

"Such an airline or alliance, whatever its name or composition will link us with each other and be the umbilical cord between the region and the rest of the world," the minister stressed.

The Chief Secretary of the Tobago House of Assembly (THA), Orville London, suggested to the STC-7 that a regional airline is the best solution as the existing carriers in the Caribbean have failed.

"BWIA has failed, Air Jamaica has failed, LIAT has failed, and the governments of the region has a responsibility to fix the problem, and fix it quickly for the people"s sake," London said.

The Jamaican government said Thursday it is still committed to keep Air Jamaica flying, but the airline´s chairman Vin Lawrence had forewarned on Monday the company was on the brink of closure.

In the past, there have been proposals to merge Air Jamaica with other regional carriers, like LIAT and BWIA, but the attempts were in vain.

Another leading voice calling for the establishment of a regional airline is political scientist Professor Neville Duncan.