Lawrence
Al Edwards, Financial Editor
THE NATIONAL carrier is having a rough time of late with one executive reporting that it is losing more money than it did last year and that there seems to be no definitive strategy to get it out of its current predicament.
Only last weekend the airline lost approximately US$500,000 as a result of delays and cancellations on its long haul route to London. New EU regulations stipulate that if an airline has long delays or cancels its flights it has to make a payment to each passenger in the region of 400 pounds.
The executive speaking under anonymity said "Things are going from bad to worse and morale is very low. We now operate under a more autocratic regime. When the new management team came in they immediately slashed some 35 maintenance crew personnel and the upshot of that is that we couldn't get aircraft in the air because we didn't have service personnel to attend to them. All this talk of the FAA grounding the planes doesn't tell the full story. I can tell you that Air Jamaica is now losing between US$25 million to US$30 million a month. The number of cancellations and delays is not helping the airline's reputation.
Only last month John Lewis, one of Air Jamaica's most reputable executives left the airline to join Butch Stewart's operations. The Financial Gleaner now understands that the national carrier's Chief Financial Officer Stephen Swordy will be demitting that position.
Last month the new executive chairman of Air Jamaica Dr. Vin Lawrence said that the Government is thinking of writing off US$398 million of the US$837 million of loses it racked up in private ownership. The airline is now seeking to raise US$255 million in long term financing from financial institutions.
The executive continued: "Air Jamaica is petrified of finding itself back in Category 2 and right now many travel agents are not impressed with its performance. As I understand it, the pilots have hammered out an agreement that will save the airline some US$12 million. I don't know at this time whether the executive management team has signed off on it."
Unaudited accounts for Air Jamaica for last year shows it incurred a loss of around US$76.5 million. Before privatisation it was running at a loss of US$140 million. At the end of last year Information Minister Burchell Whiteman placed the losses at US$680 million but last month Dr. Lawrence maintains Air Jamaica losses over the last ten years stand at US$837 million.
"Air Jamaica needs mangers and executives who have experience in the airline industry. You have to know this business. I'm going to say what everyone is saying " Isn't the guy now heading the airline the same guy who was part of the finance team watching when Butch had it? You got to ask yourself, should he really be the man at the helm?
Is Air Jamaica going to be a low cost carrier? Is it going to continue with flying chefs, red carpet and champagne or will it just stick to core routes? No one knows, that's for sure."
