Grounded Planes Cost Air Jamaica Millions 02.24.2005, 04:27 PM The grounding of several Air Jamaica planes to comply with U.S. air safety rules has crippled the troubled carrier's operations, costing it millions of dollars in revenue, the airline's top executive said Thursday. Air Jamaica pulled half of its 20 planes out of service and canceled several U.S. and Britain-bound flights earlier this month after a U.S. Federal Aviation Administration audit raised questions about the airline's maintenance schedule, company executive chairman Vin Lawrence said. Lawrence said the canceled flights and subsequent delays for travelers had battered the airline's earnings as it struggles to recover from financial crisis two months after being taken over by the government. "We have suffered devastation in our revenue for February," Lawrence told reporters. He said the disruption had cost the airline "millions of dollars" but declined to give an exact amount. In an assessment to Jamaica's civil aviation authority, the FAA insisted Air Jamaica carry out major maintenance to planes every 15 months instead of every 18 months, disrupting the airline's repairs schedule and forcing the flight cancellations, Lawrence said. Air Jamaica hasn't said what prompted the FAA assessment, but Lawrence said some aircraft needed "routine maintenance" like replacing worn labels and fixing broken waste bin covers. He said none of the items violated regulatory standards. FAA spokesman Les Dorr declined to comment on the findings of the assessment, but said failure to comply can lead to a country's airline being barred from entering the United States for safety concerns. Three Air Jamaica planes remain grounded and are awaiting clearance from the island's civil aviation authority, Lawerence said. The disruption comes amid increased competition from rival carriers. However, Air Jamaica should be able to resume normal operations by March with a fleet of 15 planes, Lawrence said. The other five planes will be returned as part of cost-cutting measures, he said. The government regained control of Air Jamaica on Dec. 23 from a consortium led by hotelier Gordon "Butch" Stewart, who was credited with modernizing the airline but criticized for failing to stop major losses caused by high fuel costs and fewer customers since the Sept. 11 attacks in the United States. The airline's new board of directors is leading a major restructuring plan that includes cutting employees' salaries, trimming staff size by 10 percent and reducing or eliminating some flights. The government had said it would try to sell the airline this year, but Lawrence said the restructuring would likely keep Air Jamaica under state control for several years, possibly through 2010. Lawrence said the board is seeking US$255 million (Jamaican $15.6 billion) in loans to help finance the airline, which is expected to lose US$83 million (Jamaican $5 billion) in 2004, compared to US$55 million (Jamaican $3.3 billion) in losses the previous year. He said the airline's debt stands at about US$890 million (Jamaican $54.5 billion), slightly less than half of which is owed to the government. The government is considering a proposal to convert the debt into equity, Lawrence said. Roger EWROPS