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Stabroek News

Air Jamaica spends millions on 'wet leasing' - Airline struggles to cope with summer traffic
published: Friday | August 10, 2007

Susan Gordon, Business Reporter


An Air Jamaica airliner takes off from a foreign airport. - file photos

The national airline, Air Jamaica, has been forced to 'wet lease' a number of aircraft to service several of its North America routes as it struggles to cope with an unusual increase in traffic this summer.

"We are having a bumper summer," Air Jamaica's vice-president of marketing and sales, Paul Pennicook, told the Financial Gleaner earlier this week in a brief telephone interview.

"The summer so far has been incredible, which is due in large measure to our loyal customers and frequent flyers who always continue to support the airline," he later said in a release issued to the media.

The airline said it transported over 200,000 on its North American routes, with the New York route accounting for 53,000 passengers alone. The management says the figure is a nine per cent increase over the number it carried last year over the same period.

"We are wet leasing this summer specifically because we saw the passengers in New York increasing," continued Mr. Pennicook.

He did not disclose exactly how much Air Jamaica has spent to wet lease other planes, but based on calculations by the Financial Gleaner, the national carrier probably spent $136 million to undertake the expensive arrangement in July alone.

Leasing aircraft, staff

Wet leasing is the common term used in the airline industry when one airline leases another's aircraft and its crew, including the pilot and its stewards or attendants in order to service a particular route.

It costs on average between US$4,000 and US$4,500 per block hour to wet lease a plane that flies out of New York, Pennicook said. This means an airline will charge the leasee for the use of the aircraft from the moment it leaves the New York destination until it returns to the point of origin.

On average a flight from New York to Kingston takes between three and three and a half hours. Checking off and aircraft upgrade may add another four to five hours to that time. It would mean, on average, Air Jamaica would be spending US$32,000 (J$2.1million) to lease an aircraft for one single flight from New York.

Long-standing relationship

Air Jamaica usually wet leases from North American Airlines and Ryan International Airlines because, Pennicook said, it was more convenient, based on the long-standing relationship with these carriers, which has been approved by the Jamaica Civil Aviation Authority.

He explained that at least two of Air Jamaica's five flights out of New York per day this summer are serviced by wet lease planes. Air Jamaica normally has three flights per day from New York to Jamaica and the Eastern Caribbean.

"It is on an as-needed basis," Pennicook pointed out when questioned about the frequency of the practice. He noted that it has been paying off for the airline, especially when flights are full. "We wouldn't want to 'wet lease' with a 50 per cent load factor. It works out in the end because when we wet lease, we fly a full plane so we make a few dollars for ourselves."

He said Air Jamaica will continue to wet lease planes when the need arises. "If we have a breakdown in the plane like we did this summer with the 1617 flight from New York to Kingston, we will wet lease. We also wet lease to do some extra flights as well," he outlined.

Pennicook discounted the suggestion that the impending general election to be held on August 27 was impacting on the increased traffic between Kingston and New York. According to him, passengers were making advanced bookings from as early June before the election date was announced.

Air Jamaica operates some 300 flights per week to destinations in North America and the Caribbean.


Pennicook

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