No turning back for Air Jamaica

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No turning back for Air Jamaica
By Linda Hutchinson-Jafar (Trinidad Guardian)

It is almost a phenomenon that while most airlines worldwide, including
local carrier BWIA, are engaged in various cost-cutting exercises, Air
Jamaica seems to be flying in the opposite direction in aggressively
expanding routes and going into new aspects of business. Although Air
Jamaica was affected by the slowdown in the US economy and the effects of
last September's terrorist attacks, it has managed to keep on all its
workers at various offices in the Caribbean, North America and the UK. Air
Jamaica, instead asked Caribbean governments for temporary reductions in
landing fees and taxes, it discounted fares between 30-35 per cent while
the Jamaican government pumped an additional US$22 into Jamaica's Tourist
Board for winning back tourists who were reluctant to get on an aircraft.
Even prior to September 11, Air Jamaica, seeing a slow down in the US
economy began putting marketing strategies in place, said Allen Chastanet,
Air Jamaica's Senior Vice President of Marketing and Sales.

At that time, Air Jamaica was heavily involved in working with the
Caribbean private sector and also with the Caribbean Hotel Association
(CHA) in putting together a regional marketing campaign for the region.
"Since September 11, immediately and after, business dropped. A lot of us
in the industry had to cutback on our services but we were back to full
services by November of that year. I would say that Jamaica and some of the
other countries were not badly impacted in terms of total numbers," he
said. Chastanet said the advertising campaign which included an US$11
million for television in the US by the Jamaica Tourist Board worked very
well in maintaining a certain level of demand for Jamaica as a vacation
destination. Prior September 11, Air Jamaica was averaging a load factor of
between 70-72 per cent. The airline is currently around 60 per cent and it
expects to have an improved average in March. "What we're seeing is that
our total number is slightly below where they were last year, revenue is
slightly down while although we made budget for January and for February
and it looks like we'll make budget for March.

"September 11 has clearly had a major impact on the airline but we're being
aggressive.Our budget calls for US$50 million increase in revenue over last
year's," said Chastanet. In the first few weeks following the terrorist
attacks, Air Jamaica was off by US$11 million. Prior to September 11, Air
Jamaica was well on its way to expanding its services to the UK. Jamaica is
now going to have for the first time a daily service to Heathrow from both
Kingston and Montego Bay, two non-stop from Manchester and a
Heathrow/Havana flight. Curacao has been added to its flights with four a
week and by mid-June, Air Jamaica will be commencing services back to
Antigua with three non-stop a week out of New York and by September, a New
York non-stop to Montego Bay. It has also expanded services to Barbados
with daily flights to New York and in the works are two non-stop from
Montego Bay to Barbados. Chastanet said prior to September 11, there was a
general recognition of a slow down in tourism in the Caribbean brought on
by several factors.

One was that the European and Asian currencies were being heavily devalued
against the US dollar which made Caribbean vacations extremely expensive.
It meant that Europeans and Asians were seeking out destinations that were
not pegged to the US dollar. On the other hand, it was also more
cost-effective for Americans to travel to Europe and the Far East. Cruise
ships were also growing substantially and moving their home base from
Europe to American cities, to allow people to drive to the ports instead of
flying. "So you're talking about going on a seven-day cruise for US$399 per
person. There's no hotel in the Caribbean that can compete against that,"
said Chastanet. While the debate is still on-going as to what contribution
cruise ships make to the Caribbean economy, Chastanet said the level of
incentives given to this sub-sector based on their contribution to the
economy is much greater than what airlines get. He said there needs to a be
a change in policy concerning the cruise industry. Chastanet also believes
that Caribbean governments need to develop a better coordinated aviation
policy.

"If we didn't know it before, we know it after the events of September 11,
the need for regional carriers is more apparent than ever before but its
because of the size of our economies and the cost of flying jets, there's
going to have to be an evaluation on how governments are going to play a
stronger role. "Having open skies in the Caribbean may sound like a good
idea but at the end of the day, may not be the right concept for the
Caribbean," he said. Chastanet said Caribbean airlines were not making
money although they were flying all over the place. "I think there ought to
be a more coordinated schedule and we support each other," he said. He
hopes that when the regional marketing campaign comes about and the call by
Caribbean Governments for a Strategic Development Plan for the Caribbean
put into action, the Caribbean could become a most sought-after holiday
destination. Air Jamaica is also working aggressively with the Caribbean
private sector to get more business out of the over five million West
Indians living in North America. "It offers a tremendous opportunity to
sell our goods and if we can increase the economic activity and there's
more business for everyone, we all could benefit," he said.



The owner of Roger's Trinbago Site:
Roj (Roger James)

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email: mailto:triniroj@yahoo.com
Trinbago site: http://www.tntisland.com
CBSC Website
http://www.tntisland.com/caribbeansocabrassconnection/
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