A sectional view of the Tinson Pen aerodrome. The property is being acquired by the Port Authority of Jamaica and the Airport Authority is seeking other investors for domestic strips in Portland, Negril and St. Mary. - File
John Myers Jr., Business Reporter
THE AIRPORTS Authority of Jamaica (AAJ) will not give in to pressure from business interests to upgrade the island's domestic airports, according to chairman, Dennis Morrison, who says the capital expenditure could not be justified by the small incomes they generate.
Instead, the authority favours going after private investors who might be interested in redeveloping the facilities into centres for luxury jets and other aircraft, or partners willing to take over the management of the facilities under lease.
Morrison said the four aerodromes - Negril, Boscobel, Ken Jones and Tinson Pen - were big lossmakers that had to be heavily subsidised by the AAJ.
According to figures from the airport authority, it costs almost $90 million annually to operate and maintain the four aerodromes, while they generate only $9.3 million in revenues, a $80.7 million drain.
The AAJ's capital budget will cap $2.9 billion this year - $2.7 billion of which is for Norman Manley International's expansion - but its budgeted expenditure on its domestic airports will remain at $9.87 million for a third year.
Tourism interests in Portland in particular have been banking on the AAJ expanding the Ken Jones aerodrome in Port Antonio, allowing them the option of transporting their guests by air, and bypassing the problematic roads that are often cut off when big storms hit.
Importance of aerodromes
But Morrison said it would cost the AAJ US$12.9 million ($877.2 million) to lengthen the runway by 500 feet and install the necessary instrumentation to allow for night flying.
He acknowledged that the aerodromes were important for intra-island linkages, and that their operation meant jobs for local pilots, but said the huge expense to keep them operational could not be justified by the small income.
But, the AAJ is willing, he said, to consider other options.
"There are at least two approaches that we can take: one is we do a public/private partnership in which the Airports Authority would lease our facilities to private operators (and) we would make the aviation infrastructure available; (or) go entirely private and have the private operator invest to upgrade the infrastructure, collect all revenues and comply with the relevant regulations."
The sale of Tinson Pen, the largest of the four with a runway of 4,300 feet, a fuelling station and facilities to accommodate night flights, is already pending.
It's to be acquired by the Port Authority of Jamaica, which wants the property for a logistics centre under its multibillion dollar expansion of the Kingston ports, now in its fourth phase.
Waiting on the AAJ
Morrison said the Port Authority of Jamaica (PAJ) has submitted a proposal, but the AAJ has not yet accepted the terms.
Part of the negotiations involve relocation for the businesses still operational at the aerodrome, located in proximity to the Kingston Free Zone, a subsidiary operation of the PAJ - among them Tara Couriers, AirPak, and AirLink.
Wednesday Business understands that one proposal is to provide operational space for the courier companies at Norman Manley, but the parties are worried that being placed further from New Kingston, the city's main business district, could add to delivery times and hurt efficiency.
"There have been consultations with stakeholders there (at Tinson Pen) and out of all of this a decision will eventually come," Morrison said last Wednesday at a forum hosted by Mayberry Investments Limited.
"It may turn out at the end of the day that the land will be sold to the Port Authority but as of now no such decision has been made."
john.myers@gleanerjm.com
