MONTEGO BAY, Jamaica – According to Jamaica’s Minister of Tourism, Hon. Edmund Bartlett, we are at a time when the aviation industry is in turmoil, and destinations are faced with flight reductions, Jamaica has entered an agreement with the US legacy carrier American Airlines, to guarantee well over 2,000 additional seats per week to the island.
This deal comes ahead of the start of the 2008/2009 winter tourist season and at a time when the Caribbean is experiencing severe cutbacks in airlift. It should also be noted that under the arrangement, the government is NOT paying out US$4.5 million to American Airlines, but has ONLY provided a guarantee for additional seats which I am confident will be filled.
Deal Not Unique To Jamaica
As all of our neighbours were aware that the Caribbean was one of the regions marked by American Airlines for reduction in air service to begin in September 2008, we find that many of them have similar arrangements with American Airlines. Thus Jamaica is not the only country with this arrangement. Indeed seven of our regional counterparts (who will remain nameless for obvious reasons) who saw the value of AA service, its frequent flyer mileage clients, its connection across the USA, with Europe and emerging markets in the Far East, have entered into similar arrangements with American Airlines. Other Caribbean destinations are also currently discussing applying this well-established practice to secure their winter airlift.
For many years, JamVac has used this and similar mechanisms to attract airlift to Jamaica and open up new gateways. Over time business models have changed, and many of the charters now flying to Jamaica have functioned in ways very similar to the American Airlines plan. That is to say, charters now fly regular schedules to Jamaica and are subject to various no-fly agreements. Thus, the time has come for JamVac to adopt this new paradigm, if Jamaica is to compete effectively and maintain its leadership position in Caribbean tourism.
Jamaica Set To Benefit
The deal with American Airlines is of tremendous benefit to Jamaica as with nearly 3,000 new hotel rooms to fill this year, additional airlift is critical:
1. The arrangements secured the DFW/MBJ flights critical to our behind the gateway markets of the west, south and northwest USA.
2. The addition of the Chicago route was critical to building our mid-west market using the ORD gateway. Though United Airlines and Air Jamaica serve this route, the uncertainty of United Airlines service and the resistance to Air Jamaica left the market dependent on charters that were once weekly and only on a Monday. Though we are grateful for the Monday service, we could not grow our tourist market on such a frequency.
3. The additional MIA/MBJ flight compensates for the loss of the Airbus 280 seats and we now have two B757/188 seats and a B737/148 seats.
Two things must be reiterated. First, this agreement will in no way undermine the service provided by the national carrier Air Jamaica. As I mentioned last week, “Such a deal with a legacy carrier allows us the opportunity to deliver the world to Jamaica and Jamaica to the world.” A key reason for signing this deal was the access to the feeder markets that American Airlines affords with over 200 flights daily. Last year, over 40 million people travelled through its Dallas hub and over 20 million through its hub in Miami. These numbers are indicative of the extensive reach beyond the gateways and the massive capacity that the airline offers Jamaica. Access to these feeder markets is critical to building the business in Jamaica.
Second, the industry depends on airlift out of the United States. This is true even for Spanish hotels that do not operate flights out of the United States.
Revenue Guarantee A Common Industry Practice
The world has changed and the Caribbean must respond. When American Airlines reduced their Eagle hub services from Puerto Rico to the Caribbean by 75% in addition to cutbacks in service from JFK and MIA to the Caribbean, preemptive action was critical. It comes as no surprise that other Caribbean destinations have also had to enter into arrangements to secure their winter airlift. Those who have hesitated may find themselves short of the seat requirements to meet their needs.
CONCLUSION
The challenges of our market place require that we treat them like opportunities. As Jamaica’s Minister of Tourism it would have been irresponsible to do nothing about the American Airlines decision to downsize their service from our primary market – the United States. Doing nothing was therefore NOT AN OPTION. We had to be proactive to guarantee the tourist industry a network of air service to protect the local tourist industry. Any other decision would have been a disservice to Jamaica.
Key Points
The JTB advertising and public relations efforts will benefit all airlines in the afore-mentioned markets.
American Airlines advertising in gateways will benefit the national carrier.
Air Jamaica remains a point to point carrier with limited/no access to feeder markets.
JHTA endorses the deal to ensure seats to fill hotel rooms.
