Third world watches as Jamaica's national airline fights to shake off debt
Kingston, Jamaica — Air Jamaica has clipped its wings and sharply curtailed its flights. But there is deep concern here that this major pruning of its admittedly overextended route system last winter will not be enough to save Jamaica's national airline form sinking further into debt.
That debt is in the neighborhood of $28 million -- quite a load for the airline of a country with 2 million people, the size of Massachusetts.
Moreover, Air Jamaica's problems are similar to those faced by national carriers throughout the developing world -- and they have led some Jamaicans to wonder if their Caribbean island nation really needs an airline.
Air Jamaica has been in deep financial trouble for a number of years because of such things as the tremendous jump in fuel oil costs that is hurting all airlines, but is particularly severe for small carriers like Air Jamaica.
Many of the airline's DC-8s, purchased when fuel costs were low and Air Jamaica was expanding its distinctive orange and yellow colors throughout North America, are wasteful fuel guzzlers. They are simply not the sort of aircraft that a small line like Air Jamaica needs.
Then, too, Air Jamaica, in an effort to attract tourists to the island and to serve a variety of far-flung prestige markets, extended its route system from germany and Switzerland to the US Southwest during the late 1970s.
All of this took place as competition on these routes was growing and there was a fall of tourism to the Caribbean. Air Jamaica's service also began to slip, as airline officials admit.
But equally troublesome for the Jamaican airline were instances of payroll padding, the paying of salaries and employee compensations comparable to, or better than, that received by employees of US airlines, and alleged extravagance such as large entertainment expenses.
The new government of Prime Minister Edward Seaga, which came to office in early November, is looking into all these problems and taking a number of corrective actions. It is also trying to learn lessons from other national carriers, such as Trinidad and Tobago's British West Indies Airlines, which went into a financial tailspin early in the 1970s in part because of the overextension of its route system.
Now Air Jamaica has suspended flights to Frankfurt and Zurich and to both Dallas and Houston. It will end London service April 3. And more suspensions -- perhaps including Philadelphia -- may be coming. For the moment, Air Jamaica is concentrating most of its aircraft on flights to Miami and New York, as well as Toronto and several Caribbean destinations.
This slimmed-down route structure has left a number of aircraft idle -- and at Norman Manley International Airport here, three of those DC-8s with their jet pods covered are parked on an old tarmac, readily visible to passengers.
Air Jamaica would like to sell these planes. But there is not much of a market for the craft as US airlines, for instance American, which is trying to sell its 707s, and United, its DC-8s, are discovering.
Air Jamaica is also appealing to the patriotism of Jamaicans and urging them to fly the national carrier.
But during the late 1970s, as its service began to deteriorate, American Airlines and Air Canada, and most recently Air Florida, began to draw passengers away from Air Jamaica.
To draw them back will not be easy. Moreover, in dropping its European service, Air Jamaica has entered into agreements with Air Florida to handle Kingston-to-London passengers via Miami, and with Lufthansa to handle Kingston-to-West Germany passengers, also via Miami.
Whether all this can save Air Jamaica remains to be seen.
If all these economies and arrangements are not enough, the government here may have to decide what value there is in keeping the airline alive.
The Jamaica Daily News, a tabloid morning paper here, said editorially early this month that there is still prestige in having the airline, despite its losses. "The real value of Air Jamaica," it commented, "cannot be measured in terms of viability alone. . . . Maybe the answer lies in accepting Air Jamaica as somewhat of a loss leader." The editorial suggested that the hotel trade, tourism industry, and other related areas of the economy benefit from Air Jamaica.
That may be true, but other carriers, such as those from the United States, can bring tourists here just as efficiently --and do it by integrating their passengers into a broader US domestic system without having to change airlines as much en route.
Whatever the ultimate answer to Air Jamaica's plight, there is little doubt that the airline in the years ahead will be much smaller than in the past, and if it is to recapture a larger share of the market it is going to have to work harder.
That's exactly the view of Tony hart, chairman of the airline, who indicates that his staff is going to have to work hard "to surpass Air Jamaica's heydey reputation" -- and also to overcome the image of poor service of recent years.
What is more, airlines throughout the developing world are watching Air Jamaica as it tries to come out of its financial tailspin. News stories about the airline's plight have been carried throughout Latin America -- an indication of how Air Jamaica is being watche d.