After an on-and-off courtship lasting almost a year, Air Jamaica and Caribbean Airlines have officially taken the first step towards initiating consolidation among airlines in the region. The Jamaican government has been shopping Air Jamaica around to various buyers since former president Bruce Nobles returned to head the carrier in October 2008.
Those discussions culminated in 2009, first with Caribbean and then with Indigo Partners, the majority owner of privately-held US low-cost carrier Spirit Airlines. Ultimately Indigo walked away from the talks, and the Jamaican government early this year resumed acquisition discussions with Caribbean.
While the government was courting potential buyers for Air Jamaica, the carrier has pared down its network and its fleet, from 15 to six Airbus narrowbodies operating to just five international destinations: Fort Lauderdale, New York, Baltimore, Philadelphia and Toronto. It will also keep operating between Montego Bay and Kingston.
Coinciding with the latest pare-down, Air Jamaica is set to begin transitioning some of its operations to Caribbean Airlines as the latter continues talks with the Jamaican government to firm up a purchase of Air Jamaica.
Air Jamaica expects the transition to Caribbean to last roughly a year, and Nobles has advised Air Jamaica's employees they will be made redundant once the transaction is complete. In the interim, Air Jamaica is operating its Airbus narrowbodies under contract to Caribbean, which is largely a Boeing 737 operator.
If Caribbean reaches a deal with the Jamaican government, former Air Jamaica alliance manager and current managing partner of Airline Information, Roger Williams, believes it offers a chance to exploit each carrier's respective strengths. Caribbean brings an operations efficiency lacking at Air Jamaica, while the latter's marketing team has demonstrated innovative and creative strength, says Williams.
And while Caribbean might have to bear short-term pain in running a contract Airbus operation and determining an optimal fleet scheme if it seals a deal, Caribbean chief executive Ian Brunton took the helm late last year with a focus on regional consolidation. Sizing up a pro-consolidation outlook, Brunton told Airline Business shortly after he took the helm that Caribbean was constantly seeking consolidation and growth opportunities. Referencing the first round of Air Jamaica acquisition talks, Brunton said: "Had this gone through, it would have grown our operations significantly."
Source: Airline Business
