Monday, July 19, 2010

Travel agents say Air Jamaica routes not profitable

The Travel Agents Association (TAA) believes the deal between Caribbean Airlines Ltd (CAL) and Air Jamaica Ltd is not a good one.

Both Prime Minister Kamla Persad-Bissessar and Finance Minister Winston Dookeran have said the agreement is a good one and the government will honour the deal made by the Manning administration.

According to the agreement, CAL is taking over Air Jamaica's profitable routes and not acquiring the airline's massive debt that runs into billions of dollars.

CAL chairman Arthur Lok Jack announced in April that the Trinidad and Tobago airline would invest US$50 million in Air Jamaica to cover operating and capital expenditure. The deal gives CAL 84 per cent ownership of Air Jamaica, with Jamaica retaining 16 per cent.

However TAA president Wayne Rodriguez is not convinced that the Jamaican airline has any profitable routes.

He believes that Air Jamaica routes which CAL has acquired are "high risk" and the airline has actually lost money on those routes due to stiff competition from other carriers. And he suggested that will not change any time soon.


In response, CAL admitted that there are challenges ahead primarily because of a slowing in business for the global airline industry.


“CAL is a profitable airline, having declared moderate pre-tax profits for both 2008 and 2009.

"We believe that this is a truly good investment for the region. We have taken over mature routes which would have taken considerable effort to develop and we have also increased our customer base," the airline said.


It added, “We are set to repeat or even improve on this performance in 2010. We have many challenges ahead with acquisition of Air Jamaica routes and operations as of May 1, 2010.”

CAL's statement acknowledged that "the global aviation industry will not pull out of its slump until 2012. We have the effect of high fuel prices and lower yields on our fares which are proving a challenge.”


The local airline has some contingency plans which include a committee to advise on how to generate revenue in other areas of the airline.

"We are confident that these measures, together with our excellent on time performance and customer service will realise the continuing profitable situation,” CAL's statement said.

No comments:

Jai & Sero

Jai & Sero

Our family at home in Toronto 2008

Our family at home in Toronto 2008
Amit, Heather, Fuzz, Aj, Jiv, Shiva, Rampa, Sero, Jai