Air Jamaica management gets high marks for new business plan

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Air Jamaica management gets high marks for new business plan

Unread post by bimjim » Mon Feb 02, 2009 ... lead2.html

Air Jamaica management gets high marks for new business plan
Published: Sunday | February 1, 2009
Arthur Hall, Senior Staff Reporter

A VETERAN international airline executive has given the management of Air Jamaica high marks for the new business plan announced last week.

Canadian David Banmiller, who served as chief operating officer at Air Jamaica between 2003 and 2004, says the route cuts and other changes announced by the airline are a step in the right direction.

"What they are generally doing - and I support that - is they are trimming things down. they are going to their strengths and they are deciding between routes," Banmiller tells The Sunday Gleaner in an exclusive interview. "My thought process is go to where your strengths are, perhaps increase your frequency, and take a hard look at expenses."

Union worries

Banmiller's endorsement came hours after the National Workers' Union (NWU) expressed fresh concerns about the business plan.

According to the NWU, "There is an absence of comparative and analytical data which would provide the basis for understanding the decisions taken."

But Banmiller, who had been selected to return to head the airline last year, but turned down the offer at the ninth hour, is well aware of the challenges facing the airline and believes that the management had little option.

"I was aware of the recommendations made nine months ago by the consulting group, GRA, and some of these changes are now being implemented," Banmiller states.

He agrees with the Air Jamaica executives who decided to include Miami in the routes being cut, despite the controversy which this decision has generated

"American flies into Miami as its strongest hub and that gives it a lot more flexibility in terms of pricing. The same with Delta in Atlanta, and Air Jamaica doesn't have the same structure; they are mostly origin destination. The second problem with Miami is that you have Fort Lauderdale, which is close by. So, if you had to choose between the two, you would choose Fort Lauderdale over Miami," Banmiller argues.

He suggests that Air Jamaica should instead focus on some key routes, including Toronto, Boston, New York, Philadelphia and Baltimore.

Fleet reduction

While backing the plan to cut flights to Miami, Banmiller is less sure about Air Jamaica's decision to reduce its fleet from 15 to nine aircrafts, but accepts that a reduction was necessary.

Says he: "Whether the right number is nine, 10 or 12, I haven't looked at the numbers. Nine seems on the low side because, in addition to those flying, you are generally going to have a maintenance airline that is off the line."

Having recently led the Hawaiian airline Aloha through Chapter 11 bankruptcy, Banmiller is well aware of the challenges which the management of Air Jamaica will face in terminating the leases of aircraft.

While Air Jamaica has not said how much this will cost, industry experts say the airline could have to come up with approximately US$10.8 million over the next six months to pay the companies from which it leased the airlines However, the company's business plan puts the figure at US$6 million.

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