Air Jamaica Defends Closure of M


Air Jamaica Defends Closure of Miami Route

Fort Lauderdale route maintained to cover South Florida market

By Antonio Percy


KINGSTON, January 30,2009 - Air Jamaica President and Chief Executive Officer, Bruce R. Nobles, says a continued low load factor, unsustainable losses and strong competition on the Miami route were the major issues influencing the airline’s decision to close the route. While expressing regret that some customers might be impacted negatively by the closure, Mr. Nobles added that the decision was supported by the findings of a due diligence review of Air Jamaica’s operations conducted by well-known and reputable international airline consultancy, GRA Inc., which also recommended an action plan aimed at taking advantage of both short-term and long-term opportunities in the marketplace.


With service from the Miami gateway set to end on February 25, 2009, Mr. Nobles emphasized that “closure of this loss-making route will enable the airline’s management to focus on our operations at the Fort Lauderdale base, which is more cost efficient, and offers the prospect for stronger growth.”  For example, average airport charges associated with operating from Fort Lauderdale airport – that is, $5.22 per passenger – are much lower than the $15.82 charges from the Miami airport. Importantly, too, the majority of Florida’s Jamaicans in the Diaspora live in and around the Fort Lauderdale area, as evidenced by the passenger growth experienced in recent years on this route. This growth is also attributed, in part, to the re-location of thousands of Jamaicans to Fort Lauderdale in the wake of the devastating Hurricane Andrew in Miami. Additionally, Mr. Nobles said that Fort Lauderdale is less than 30 miles from Miami and will strategically serve more passengers in the entire South Florida region from Miami to West Palm Beach.

He added that customers will find the new schedule to and from Fort Lauderdale more convenient – allowing the airline’s business passengers to travel to Fort Lauderdale early morning, spend a full day in the South Florida area and be back home by late evening. The schedule also allows passengers from South Florida to spend a full day in Kingston and return the same day. “Essentially, the schedule accommodates the needs of our customers in these markets very well,” Mr. Nobles said. The airline’s President also pointed out that business results for the 5-year period 2003 to 2008 showed a 51% decrease in the number of passengers carried for the Miami gateway, as against a 52% increase for those at the Fort Lauderdale gateway.   He added that while the heavy competition from American Airlines in the Miami gateway contributed to the declines recorded, this was compounded by the negative impact of the economic recession in the United States, which resulted in a reduction in passenger traffic.

In comparison to the Miami route, Mr. Nobles said the Fort Lauderdale gateway has averaged consistently higher margins.  “While the impending closure of the Miami route will create some dislocation for some of our loyal customers in Jamaica and the USA, it was a necessary business decision, as we seek to maintain our  service standards and protect the airline’s viability in today’s challenging economic environment and increasingly competitive aviation sector,” the Air Jamaica CEO said


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