[Jamaica Observer] Government needs to stop 'untouchable' JM

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[Jamaica Observer] Government needs to stop 'untouchable' JM

Unread post by bimjim » Sun Nov 23, 2008

http://jamaicaobserver.com/magazines/Bu ... AMAICA.asp

Government needs to stop 'untouchable' reign of Air Jamaica
Simon Tompkins
Friday, November 21, 2008

For over two decades the balance of power between the previous and current governments and the state-owned monopoly carrier Air Jamaica has been in Air Jamaica's court, and the fact that consecutive prime ministers, ministers of finance and ministers of transport have been unable to control the actions of the airline's top executives speaks volumes. It is perhaps surprising to find out that Air Jamaica, not the Government, has determined much of the country's recent air transport policy. Air Jamaica's monopoly over Jamaica's air transport is no accident, but rather is the result of continued obstruction by Air Jamaica of any liberalisation of the skies over the past 20 years.

The 1996 Caricom Multilateral Air Services Agreement, an attempt to open the Caribbean's skies providing for more routes, more services and lower fares, was intended to develop the Caribbean's air transportation services. This was put in place to boost tourism, develop local business and to improve regional integration and was signed by 11 Caribbean countries at a 1996 Caricom meeting. Though this is a sensible and straightforward plan, Air Jamaica moved to protect its long-established monopoly of our skies and forced the government of the day not to ratify the final agreement. To this day Jamaica remains the only major Caribbean country not a part of the Caricom 'open skies' agreement. This remains a damaging example of Air Jamaica's iron fist over Jamaican air policy and its determination to thwart any attempt to open Jamaica's skies to competition in spite of the clear need for a national policy to develop national air services. Air Jamaica had the ability to stop the Government of Jamaica entering the Caribbean Open Skies agreement in 1996, and with a new Caribbean Open Skies being proposed it seems likely that once again Air Jamaica will have the power over the decision, leaving a hapless government struggling to find new foreign investment, new tourists and new employment.

How was the state-owned airline allowed to clearly misuse the power given to it by the people and presided over by our elected and accountable Government? Jamaica has a prime geographical positioning in the heart of the Caribbean and an excellent airport infrastructure. These factors give Jamaica the opportunity to develop itself as the regional hub for air and indeed sea transport, yet Jamaica has seen little development of this vital industry for over 20 years. Imagine if we had a state-owned shipping company with such power.

Goods we need to import like fuel and food would be even more expensive and sparse and indeed so would our vital exports such as bauxite and sugar. The equivalent is occurring in air transport and as long as the insurgent Air Jamaica and its dominant figure heads can exploit their position then we will continue to squander Jamaica's opportunity to utilise air transport to boost the island's economy. It is no easy task but the minister of transport with the full backing of the prime minister needs to take control of the nation's air policy from the state carrier and its monopolistic ambitions. The result will surely be economic growth, new jobs, new air services and lower fares for the Jamaican market.

It's a wonder to think that a proposed air service from a Caribbean-backed airline could be denied by Air Jamaica when Barbados among other countries have for years given access for our national airline to operate out of a number of countries on routes to the Caribbean and US. Surely this is both diplomatically ill-conceived and strategically damaging at a time when we are searching for foreign direct investment and looking to lead the Caribbean in terms of economic growth and social development. To deny Airone access to the Jamaican market can only send out the wrong signals to international investors, ones that say that our developing economy is old-fashioned and prone to a monopolistic mentality. Unless we are truly 'open for business' as this Government has repeatedly pledged then investors will stay away and no amount of rhetoric will distinguish perception from the reality. Therefore when an airline looks to create hundreds of jobs, to invest tens of millions of dollars in equipment and infrastructure and to offer passengers the lowest fares and new routes, then why not welcome this investment with open arms? It appears that again Air Jamaica has triumphed over the Government and caused the prime minister to backtrack on his election promise of ensuring Jamaica as open for business.

Air Jamaica's key personnel have also lobbied abroad in other Caribbean countries to prevent the liberalisation of the Caribbean's air transport market and to block in particular the efforts of Airone. I can only reasonably guess that the minister of transport, the minister of foreign affairs and indeed the prime minister did not approve individuals from the national carrier trying to lobby Caribbean governments in an official capacity against Airone and other air initiatives.

Finally, the most recent example of Air Jamaica trying to dictate to the Government the country's air policy, was in its fervent attack on Minister Bartlett's move to protect airlift by creating a revenue guarantee for American Airlines to fly certain routes. Air Jamaica's Shirley Williams and Paul Pennicook, (Pennicook has subsequently resigned), led a ferocious and widespread public attack on the Government.

This was a clear violation of the responsibilities executives have to their shareholders, the Government and people of Jamaica. This could never happen with a public company, as the management and board would never construct a public attack on its shareholders as they would be brutally and swiftly fired. In such an open attack the tyrannical Air Jamaica has again demonstrated its lack of accountability and duty to the Government. They continue to abuse the position they hold in the region all the while demonstrating all the worst traits of an oppressive monopoly.

See Part II next week

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