Fri | Apr 10, 2020

Air Jamaica: rescuing a treasure

Published:Sunday | January 31, 2010 | 12:00 AM

Wilberne Persaud - Columnist,

Last week one morning, I woke up to find in my inbox a copy of an open letter from the staff of Air Jamaica Holdings Limited to Prime Minister Bruce Golding, indicating "full support of the initiative presently under way by the Jamaica Air Line Pilots Association (JALPA)".

It was a moving appeal, a plea to keep alive "the little piece of Jamaica that flies!"

The letter identifies changes experienced over the years: "change in its truest sense; change of management, owners, operating plans and even Government. Today, however, we stand as one united voice to say: 'It's ours, our sweat, tears, labour - our family, our heritage and more so our Jamaican pride".

I must confess to sharing their pain, emotionally, almost like anticipation of a loss in the family. Sometimes in such matters emotion must be suppressed.

Actually, however, there is no need to abandon, or make the case based purely on emotion. Emotion buys no bread at the supermarket. The case can be convincingly made from the bald facts of Air Jamaica as a business - private-sector style - versus Air Jamaica as government supported, yet ultimately taxpayer-funded provider of subventions to the tourism industry.

Effectively, taxpayers fund losses while private tourism interests take the profits. Consider this: Would the IMF insist that the Government abandon or sell off the Tourist Board? What profits does this entity generate, for and to whom?

Who pays for its operations? Which non-Bellevue inmate would purchase it?

Entities such as these exist because of external benefits to society and economy as a whole. The businesses they support provide employment, pay taxes and so on.

From its 1969 inception, Air Jamaica has never been fully, not even adequately capitalised.

This is not a disputed issue.

Furthermore, operationally, Air Jamaica, for several years of its existence, provided profits, performing in an internal bottom-line sense, better than many US airlines. Always, however, with debt service factored in, the airline made a loss - with inadequate capital the only possible outcome.

Yet, Jamaican and foreign travellers alike value the service, the 'feel' and pleasant, unique experience flying the national airline generates.

Air Jamaica's contribution to the economy and people is also not in dispute. Higglers became international travellers, sourcing goods to satisfy the needs of a wide cross section of Jamaicans. Their drive, ingenuity and initiative are legendary, though their behaviours sometimes jolt the sensitivities of business and holiday travellers - not too high a price to pay for the service rendered.

During the 1980s, as today, the multilaterals World Bank, Inter-national Monetary Fund (IMF) and others advocated the airline's closure.

Eventually, pressures led to privatisation.

But the bleeding continued for the same reasons. Our tourism industry required airlift from destinations that would not, on pure bottom-line business decisions, make sense.

In the mid 1980s, this columnist advocated in discussion with Air Jamaica's finance committee and board, sharing the cost incurred in promoting tourism.

If bread and butter routes - New York, Miami, Toronto - subsidised Los Angeles, Atlanta, Frankfurt and other gateways required for tourism, then taxpayers should not foot the whole bill.

Surely, an acceptable cost-sharing mechanism could be hammered out.

Sadly, the idea was an absolute non-starter. The result: Air Jamaica's chance of showing a profit scuttled.

If the proposed sale is to be effected, after more than 40 years, some entity will be allowed to run Air Jamaica as a purely private business for the first time at last.

The problem must be fixed.

Successive governments, having decided airlift was a priority for tourism, didn't reduce state expenditures in other areas to facilitate that decision.

top heavy management

It also appears that the airline operated with a top heavy and costly management structure.

Be that as it may, the Jamaican Government will now absorb Air Jamaica's debt and, presumably, the company sold for a dollar!

Question is, to whom? How will the sale impact Jamaica's travelling public that relies heavily on its operation? Will 'high technology jobs' afforded Jamaicans by the presence and operations of an international airline disappear? Will external benefits delivered also disappear? What of foreign exchange outflows required for payment to non-Jamaican carriers for travel and freight? Will the Air Jamaica brand be maintained? We don't know; rumours suggest not.

But, why not sell the company to the staff for one dollar? Attach strings.

The staff themselves, according to their letter, propose some strings.

There should be a public offering to Jamaicans willing to buy into the new company. Its routes must be further rationalised, top-heavy management structure made lean and efficiency become the ultimate operational driving force.

Transparency should be the hallmark of the new entity. Especially at this time of uncertainty, recall and reduction of interest rates on government debt, new and promising vehicles for investment opportunities become attractive.

All redundancy payments should become part of the capital of the new new-Air Jamaica. These monetary entitlements of staff shall become mandatory shareholding. All the higglers who use the airline will presumably be happy to invest, for they know they will find similar accommodation nowhere else. The talent, skills, ingenuity and capital for such an enterprise exist in Jamaica.

The letter, fully accepting change is inevitable, includes this quote: "You are the catalyst of your own change and the pathway of your success - Arise and Stand".

Borrowing from the Obama campaign and Jamaica's flag, they say: "We know we can! Indeed Hardships there are, but the land is green and the gold in our national carrier still shines."

I should like to add a quote from the poem 'Invictus' (translation: unconquered), a hand-written copy of which Nelson Mandela kept on his Robben Island prison cell wall. In troubled times he recited some of these lines:

"I thank whatever gods may be

For my unconquerable soul

I am the master of my fate:

I am the captain of my soul."

Air Jamaica has many captains. They alone can't achieve rescue of an invaluable treasure which, once lost shall, perhaps, never be regained.

EDITOR'S NOTE: Since this column was written, Prime Minister Bruce Golding has said he will consider JALPA's plea but only if the deal with Caribbean Airlines falls through.

An Air Jamaica plane sits on the tarmac at the Norman Manley International Airport, Kingston. - File