The Editor, Sir:
I encourage the new management team not to pursue the strategy of turning our national airline into a "discount", no-frill, low-cost carrier. The AJAG management did an excellent job building a strong brand image for Air J in the North American and U.K. market ... albeit at some huge unbearable financial losses. The new management should seek to build on that brand image.
The airline industry has a unique cost structure and heavy reliance on fuel costs. Over the next 20 years we will experience per barrel costs of oil between US$50 to US$100, because of the current OPEC production levels, oil reserves and support for alternative energy/fuel sources. The industry has a low variable cost per passenger and high fixed costs per ASM (available seat mile). Hence, any strategy of being a
discount carrier will fail, given the market volumes of Air J's main routes.
In this industry, if your PLF ( passenger load factor) is less than 68 per cent, that airline will be very vulnerable. Discount carriers do well in high-volume, short-distance, domestic markets. Even then, that's no guarantee for success as we see this week in the JETSGO airline failure in Canada.
Air J needs to develop a 10-year long-term strategy and communicate and agree with the four labour bargaining units (pilots, stewards, ground and admin. staff) in order for the airline to go forward
successfully. An expatriate CEO or management team can help with the execution of the strategy, but should not be a prerequisite for an effective turnaround strategy.
Air J needs to focus on the eight main routes and develop service products to suit the three market segments business, tourists and ethnic. These customers will pay for the value of services.
For the Caribbean market, Air J should look to using fuel-efficient aircraft like the CRJ 50-seater aircraft from Bombardier or equivalent. CRJs have low maintenance, are fuel-efficient and have excellent cockpit technology, not to mention, there should be no compromise on maintenance and safety.
I am yet to hear what the strategic direction of the company will be. Right now it is just focusing on survival, I guess.
I am, etc.,
LENNOX PARKINS
allan_parks@yahoo.com
P.O. Box 871324
Stone Mountain,
Atlanta, Georgia
Via Go-Jamaica
