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I am sure that a number of groups are happy that Caribbean Airlines wasn't the successful bidder.
Today 01:42

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The Jamaica Airline Pilots Association has expressed its confidence that it could operate Air Jamaica successfully if its proposal is accepted by the government.

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The Jamaican Airline Pilots’ Association (JALPA) has submitted its business plan “on behalf of the staff” of Air Jamaica to acquire the airline.

The submission made yesterday, follows an open letter to Prime Minister Bruce Golding from the staff of Air Jamaica. In the letter the staff said “let the divestment take place but let JALPA, the representation of Air Jamaica’s staff and the Jamaican people take the reins”.

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Caribbean Airlines to be Jamaica's exclusive national carrier
Published: Friday | February 12, 2010

R. Anne Shirley, Business Writer

The Government has agreed to ensure that Caribbean Airlines is designated the exclusive national carrier of Jamaica under the air services agreements between itself and other states.

This was stated in the non-binding letter of intent signed on January 22 by the Government, Air Jamaica Limited, Air Jamaica Holdings Limited and Caribbean Airlines, a company owned by the Government of Trinidad and Tobago.

Under this agreement, the parties are committed to making best efforts to sign legally binding agreements by March 31. In this regard, the GOJ and Air Jamaica will take all necessary steps to effect the cessation of operations of Air Jamaica on or before July 1, and as soon there-after close Air Jamaica.

Caribbean Airlines will commence its Jamaican operations on or before July 1 upon the cessation of operations of Air Jamaica. Effective as of the consummation of the closing, the Government has agreed that "Caribbean Airlines shall be the exclusive national carrier of Jamaica and, in this regard, will not request designation of national carrier status for any other air carrier for as long as the Jamaican operations maintain a minimum level of service and meet certain other criteria, which in each case will be set forth in the definitive agreements".

Prior to the cessation of operations, Air Jamaica will "implement revenue management and communication measures as determined by Caribbean Airlines and reasonably acceptable to the Government of Jamaica in order to actively manage market share, enhance passenger loyalty to the national carrier, and help preserve the competitiveness of the launch of the Jamaican operations (of Caribbean Airlines)".

Air Jamaica currently flies to five destinations on 13 routes. The destinations are the United States, Canada, Cuba, The Bahamas and Curaçao. Last year, the airline carried 1.1 million passengers on these routes.

In Appendix I, attached to the letter of intent, Caribbean Airlines stated it would start up its Jamaican operations by adding a network of routes to its international network.

Caribbean Airlines will also operate a Kingston, Port-of-Spain, Georgetown (Guyana) route one flight/seven days per week, but this route will not form part of the Jamaican operations.

In addition, Caribbean Airlines has indicated that possible intra-island flight between Kingston and Montego Bay is "to be considered". So the advantage that Air Jamaica passengers had to connect between Kingston and Montego Bay will likely be lost.

For the initial Jamaican operations, it is estimated that the routes will be operated with "five to seven aircraft with an estimated number of cockpit and crew, respectively, of 70 to 90 and 140 to 160".

The agreement expects that there will be "synergies and rationalisation in many areas including ground handling (flight and passenger) and distribution".

The Air Jamaica Frequent Flyer Programme will be integrated and rationalised into the Caribbean Airlines programme. In terms of the management and personnel to be employed to man the Jamaican operations, Caribbean Airlines shall have "absolute discretion in the selection and recruitment of any Air Jamaica employees on new contractual arrangements".

Airline tickets to be honoured

Also, the fuel hedge now enjoyed by Caribbean Airlines will be extended to the Jamaica operations.

Caribbean Airlines will honour airline tickets bought on Air Jamaica on routes which will comprise the Jamaican operation and have not yet flown at the time of the closing of Air Jamaica. On or before the closing, "the Government of Jamaica will pay to Caribbean Airlines an amount equal to 93 per cent of the passenger fare value of the Air Jamaica ticket fares".

In consideration for all of the above, the agreement shall contain an anti-dilution provision "to insure that Government of Jamaica retains no less than a 10 per cent equity interest in Caribbean Airlines after closing, giving effect to any equity funding post-closing needed to meet the requisite cash threshold. Such securities shall be of the same class of securities held by the Government of Trinidad and Tobago and there shall be no securities senior to it".

The Government of Jamaica will also appoint one director to the board of Caribbean Airlines.

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Well, I guess it is, given JALPA's philosphy that having a workforce of 1607 employees to operate 7 airplanes constitutes a "lean but focused workforce."

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Air Jamaica Outlines Wet-Lease Plans

Mar 8, 2010



By Darren Shannon


Air Jamaica CEO Bruce Nobles is proposing a strategy that could terminate the carrier’s scheduled operations on April 11 and revive the company the next day as a wet-lease operator for Caribbean Airlines, which is still embroiled in takeover talks with the Jamaican government.

In an interview with The DAILY, Nobles said the plan is still under negotiation and many key details have still to be agreed.

Despite that, an outline has emerged where Air Jamaica will effectively cease to exist on April 11 just as its winter schedule ends, and all employees will be made redundant.

Nobles explained that an unspecified number of these employees will be rehired on fixed-term contracts to operate six aircraft under contract to Caribbean Airlines on a schedule announced early last month (DAILY, Feb. 3) that drops five city-pairs and three narrowbodies from Air Jamaica’s current network.

“We will be using our fleet, our AOC [air operator certificate], and our bilateral agreements. We will be operating under the Air Jamaica code, issuing the same tickets, and taking bookings through Air Jamaica’s reservation systems,” said Nobles in the telephone interview.

He added that this contracted operation will exist for six to 12 months, while Caribbean Airlines finalizes the creation of a Jamaican subsidiary and obtain the relevant access rights from U.S. authorities.

The Trinidad and Tobago-based carrier, however, will be financially exposed to the wet-lease operation. “If the expenses are larger than the revenue, then Caribbean will have to make up the difference. Conversely, if there is a profit, that will be Caribbean’s,” said Nobles.

But this is only an outline, warned Nobles, who noted that key elements, including the implementation date, can change. “There are accounting issues with ending an operation in the middle of the month, and although it is too early to say, this could affect the date.”

It is also unclear if the new operation will retain Air Jamaica’s tails or convert to Caribbean Airlines’ livery, and the future of this mostly leased fleet is still uncertain.

“What we want to make clear is that we are working to guarantee a seamless transition from one operation to another that ensures our customers will not be inconvenienced, and retains airlift to Jamaica,” said Nobles.

And though the CEO avoided the issue, this agreement also relieves a near-bankrupt Jamaican government of an expensive nationalized company that is hindering the completion of a major loan agreement with the International Monetary Fund.

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