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Air JA’s Interim Management Team to Examine Route Network

March 1, 2005

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Over the next few months, Air Jamaica’s interim management team will examine the airline’s route network, with a view to rationalising it in some areas, and to determine the viability of expansion into new areas, Dr. Vincent Lawrence, Executive Chairman of the airline has said.
As part of restructuring efforts, over the last three months, Air Jamaica was forced to discontinue flights to some destinations and reduce the frequency of travel to others. Notwithstanding this, the airline performed creditably.
“Even with the discontinuation of flights to some destinations and reductions in frequencies to others, our operating results between December 23 and January 31, show a six per cent increase in revenue over the corresponding period last year,” Dr. Lawrence noted.The Chairman was speaking at a press conference, held at Air Jamaica’s head office on Harbour Street in Downtown, Kingston on February 24.
He pointed out that various stakeholders in the tourism sector have been aggressively lobbying the national carrier to expand its route network to include European destinations, especially in light of the expansion and development in the hotel industry. This, he said, has prompted the interim management team to meet with officials from the Ministry of Transport and Works, the Jamaica Civil Aviation Authority and the Airports Authority of Jamaica.
“It’s part of what we have been looking at. What are the implications? What does it mean with regard to the United Kingdom? What does it mean with regard to the European Union? So over the next couple of months there will be significant analysis and discussion on those issues, and then we’ll have to enter into bilateral discussions with the groupings,” the Chairman informed.
Meanwhile, Dr. Lawrence suggested that in his view and in the best interest of Air Jamaica, and by extension Jamaica on a whole, the Government should maintain control of the airline for up to five years before seeking to privatise it once more.
“For you to have people invest in the airline, you need to demonstrate some level of viability in the operation. We believe that we can show viability in the operations over a two to three year period…We think at that stage, somewhere between three to five years would be an appropriate time to look at divesting interest, and what would be that methodology. I would recommend to the government that the methodology should be to list Air Jamaica on the Stock Exchange,” he said.
He emphasised that this strategy was critical to the survival and success of the airline and the country’s economy.
In December 2004, when Government assumed full responsibility for the management and operation of the airline from the Air Jamaica Acquisition Group Limited (AJAG), Finance Minister Dr. Omar Davies stressed that his administration “has no desire to retain permanent ownership and control of Air Jamaica”.
“Our objective is to restructure the entity, such that it will be able to attract adequate equity capital from private investors,” the Finance Minister said.

Last Updated: March 1, 2005

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