Dr. Davies Announces Restructuring of Air Jamaica

Finance and Planning Minister, Dr. Omar Davies, today announced a major restructuring of the operations of national carrier Air Jamaica, which will involve the appointment of an interim board to oversee operations until June 2005.
Dr. Davies, who made the announcement at a press conference held at his National Heroes Circle office in Kingston, said the decision comes in the wake of recommendations by international airline consultants, Sabre Airline Solutions, which identified six critical operations-related areas that must be restructured, from which expense savings of approximately US$32 million can be realized in 2005 and subsequent years.
The areas slated for restructuring are: fuel conservation, maintenance and engineering, aircraft lease arrangements, crew and staff remuneration and network/route rationalization.
Meanwhile, Dr. Vincent Lawrence has been named as executive chairman of the new board, which has been given a six-month time frame to put the necessary measures in place to return the national airline to viability. Supporting Dr. Lawrence will be former National Commercial Bank executive, Aubyn Hill, who will head the restructuring office to be established.
Other members of the board are Bank of Jamaica Governor, Derrick Latibeaudiere; Executive Director of the Jamaica Tourist Board, Paul Pennicooke; Accountant General, Millicent Hughes; O.K. Melhado, director of Air Jamaica; Senator Noel Sloley; President of the Port Authority of Jamaica, Noel Hylton, and Keith Senior will serve as government’s representative on the board.
Dr. Davies underscored the government’s commitment to the restructuring of the airline, to serve as a catalyst for economic growth.
“Our objective is to restructure the entity, such that it will be able to attract equity capital from private investors. Our action at this time has been taken in the interest of the national economy,” he stated.
Furthermore, he assured that there would be no disruption of any sort of operations during the restructuring phase.
Dr. Lawrence, said the mandate of the new board, was to maintain the airline’s position as a world-class carrier, “while pursuing viability through rightsizing, in order to realize operating surpluses and overall cost savings”.
The new executive chair said that as part of the financial restructuring, all stakeholders, management, crew, ground staff, creditors, suppliers and government would have to make significant sacrifices and adjustments in the bid to bring viability and competitive market arrangements to the airline.
Dr. Lawrence informed that the restructuring would be conducted in tandem with new management arrangements for the airline.
In the interim, the airline will continue to honour its obligations to the travelling public. Dr. Lawrence assured that all schedules, ticket purchases, agreements with travel agents and other partners remain valid and will be honoured. “Air Jamaica will continue to fly during the restructuring process,” he emphasized.