Air Jamaica continues to bleed red ink under new ownership, and was among the biggest drags on Caribbean Airlines Limited’s (CAL) bottom line in 2011.
Still, Air Jamaica’s US$38 million loss was a 75 per cent improvement over the previous year when the airline lost some US$150 million, according to the project manager on the divestment committee and a union expert.
Jamaica continues to own a piece of Air Jamaica by way of its 16 per cent stake in Caribbean Airlines – a connection that Bustamante Industrial Trade Union (BITU) representative Kavan Gayle says will require the Jamaican Government to address the airline’s loss to protect jobs and passengers.
On the weekend, Trinidad Express reported that Trinidad’s transport minister disclosed in parliament that Caribbean Airlines made a US$58 million loss and that Air Jamaica lost US$38 million.
Several efforts to clarify the figures with Caribbean Airlines were unsuccessful.
Fuel costs and administrative expenses were factored into the loss.
Former CAL chairman George Nicholas III was quoted as stating that the Trinidad government’s withdrawal of a fuel subsidy put CAL’s profit trajectory into a loss position.
“I can’t verify those numbers, but it would be a significant improvement,” said Air J project manager Dennis Chung on Tuesday.
“In the last year of operation I believe Air Jamaica made around US$150 million loss. It was averaging over US$100 million loss per year,” Chung told Wednesday Business.
The Air Jamaica divestment committee was headed by Dennis Lalor, and included Cheryl Lewis from the Attorney General’s Department, and Chung as project manager.
In December, Chung told the Gleaner that Government’s minority stake in CAL comes without debt obligation.
Air Jamaica historically made some US$400 million annually between 2004 and 2006, but recorded a US$112.8-million loss in 2004; US$135.9 million in 2005, and projected US$74 million in 2006, according to Jamaica Public Bodies documents published by the Ministry of finance.
Subsequent publications omitted Air Jamaica, and the Economic and Social Survey published by the Planning institute of Jamaica only records revenues and passenger load factors. Over the past decade, Air Jamaica racked up more than US$1 billion in losses.
Gayle met with management last month but was not briefed on the financial performance or prospects for gliding the airline into profitability, he said. The airline, however, has conducted a series of job cuts over the year in an effort to consolidate its operations with its Trinidad parent.
Gayle questioned the reason for the continued losses, saying there ought to be a strategic plan to change its trajectory. The BITU represents 150 flight attendants and 75 pilots affiliated with Jamaica Airline Pilots Association.
“If you have a 16 per cent stake in the national carrier, then you should speak about it. They have been silent on it,” Gayle said.
CAL officially acquired majority stake in Air Jamaica in May 2011.
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