AIR JAMAICA had expected to be in a loss position this year, even before the events of September 11 in the USA, but was looking to break even in 2002. Now it says its losses will be three times the original projections.
On Thursday, the airline told an investment forum that projected losses of US$18 million have been recast to US$45 million, throwing out its other projections which had been on target up to June.
Air Jamaica is "setting sales for recovery," said William Rodgers, senior vice president for Industry Affairs, referring to plans by the airline to regain ground, as he addressed a seminar on tourism hosted by Mayberry Investments Ltd..
Later, he told The Gleaner that the plan also included a cut in the number of flights on some routes, for example Houston, where the six flights are to be reduced to four. This strategy is expected to lower operational costs relating to expenses like fuel and landing fees.
Savings in this area, Mr. Rodgers said, are projected at US$12 million during October to December this year. "We have been holding costs pretty much on target." Gross revenues for the year are about US$380 million, or little below that, he said.
The airline's other strategies, aimed at carving out share in a now jittery market, involves: taking its current flights back to full capacity by the end of this month, having reduced operation by 15 per cent post-September 11; and taking an aggressive sales and marketing pitch to the ethnic market. Also, it is seeking to hone in on and exploit expected changes within the market.
From March 2002, British Airways will fly into Kingston only, discontinuing stops in Montego Bay. When it announced the decision in April, BA had cited "weak yields and high operating costs."
But, Air Jamaica sees it as an opportunity to expand its Montego Bay hub. According to Mr. Rodgers, it will take up the slack, with plans to expand its London Heathrow service, add a new flight from Heathrow via Havana to Sangster International, Montego Bay, and another from Manchester into Sangster, using the new A340 transatlantic aircraft on order for delivery at the same time BA pulls it flight.
July and August yielded profits for Air Jamaica, but overall revenues came in below expectations because of the slowed American economy as well as the July events in west Kingston. In September, the market into Montego Bay dropped 30 per cent; in October the drop was 15 per cent, showing some recovery. But revenues suffered even more as the airline was forced to do heavy discounting in order to recoup business, Rodgers said.
Jamaica's visitor arrivals for the year to-date are down 1.9 per cent, and Air Jamaica is still facing the reality that worldwide travel is down, and the airline industry is reeling.
The airline said it has raised some money on its own, backed by Government guarantee, to finance its operations, but has not discounted going to government, a 45 per cent shareholder, for help, Mr. Rodgers said.
Answering questions about the possible impact of the American Airlines A300-600 crash, he said the aircraft was an older version of the Airbus series, and used a different engine from the CFM 56 used on Air Jamaica's larger five-year-old planes.
