"... more than doubled ... "

[Dr.Dudd]

Re: "... more than doubled ... "

If Air Jamaica folds all other air lines would instantly colude to increase their fares to the point where jamaica would become unattractuive to visitors and force the government to pay them to fly there,like many othe countries do,places like Barbados,and Bermuda, Dominican Republic etc etc.

...and i have to do some work too.

[RichD]

Re: "... more than doubled ... "

[ QUOTE ]
Port-of-Spain has taken a majority share of the new Caribbean Airlines (CA), replacement carrier for BWIA, a government official said this week, but without spelling out the ownership stake.

Tourism Minister Howard Chin Lee said the government would maintain its dominant share "for the time being."

He was speaking at a ceremony to mark the arrival of a new Boeing 737, the first of Caribbean Airlines' new fleet.

The new carrier begins operating in January.

Clean slate

Caribbean Airlines chairman Arthur Lok Jack said the new entity was starting with a clean slate as a "fully capitalised airline with a clean balance sheet" that will help it to handle the challenges of the global aviation industry and usher in a "new chapter in Caribbean aviation."

Last year the Patrick Manning administration acquired the airline, injecting new capital of US$250 million, a decade after it had initially privatised it in 1995.

Different reports have put BWIA's indebtedness at or around US$100 million (TT$630 million). The airline's financials for 2004 recorded an accumulated deficit of US$104.1 million (TT$655.9 million), including after-tax losses of US$15.36 million that year ending December 31.

Its current liabilities then exceeded its current assets by US$110.4 million (TT$695.43 million), said auditors PricewaterhouseCoopers.

A rights issue which raised US$40 million, helped pay down some US$33 million of debt, leaving BWIA with net liabilities of US$7.6 million at the close of 2004.

New era

Chin Lee described the arrival of Caribbean Airlines' new plane as "a new era for transportation in and out of Trinidad and Tobago," saying the airline industry was the "lifeline" of the tourism industry.

He said the launch of Caribbean Airlines on January 1 next year would complement government's efforts at increasing visitor arrivals and hotel stock.

Peter Davies, CA chief executive officer speaking with reporters after the ceremony, was unforthcoming with details on the ownership structure.

"As far as I know they (Govern-ment) are the shareholders, " he said. "My business is to make sure we have a profitable airline," he added.

Davies said CA would have a total workforce of some 700, but the carrier's structure is still being worked out.

The airline president said he was unable to estimate how many former BWIA workers have been employed by the new company, noting that nearly 20,000 job applications were still being processed.

Davies also declined to reveal how much money Caribbean Airlines was spending to market itself overseas, but said the campaign was taking place in all of BWIA's current destinations.


[/ QUOTE ]

[Yuriatin]

Re: "... more than doubled ... "

Rich - thanks for sharing this. Is this from today's Gleaner? I thought I saw it today but was so slammed at work, didn't get a chance to go bk and read it.

In relation to a post in this thread earlier today, I was interested to hear the CEO say,

"As far as I know they (Govern-ment) are the shareholders, " he said. "My business is to make sure we have a profitable airline," he added.

[RichD]

Re: "... more than doubled ... "

for the record the Ceo is di same one who was a run BWIA fi di past donkey years

[Dr.Dudd]

Re: "... more than doubled ... "

[ QUOTE ]


In relation to a post in this thread earlier today, I was interested to hear the CEO say,

"As far as I know they (Govern-ment) are the shareholders, " he said. "My business is to make sure we have a profitable airline," he added.


[/ QUOTE ]
That is just political promise to fool those who don't know economics.
If it was so profitable,why is it thatsome smart businessman don't buy it with their own money (unlike Butch who 'bought' Air Jamaica with Taxpayers money.

[RichD]

Re: "... more than doubled ... "

[ QUOTE ]
Air Jamaica head says merger proposals are impractical
published: Monday | December 4, 2006

Dionne Rose, Parliamentary Reporter

President and chief executive officer of Air Jamaica, Michael Conway, last week dismissed as impractical suggestions that the national airline should be merged into a regional airline.

Mr. Conway was responding to questions posed by Opposition Spokesman on Transport, Mike Henry, who had asked about the practicality of a merger.

"There is nothing of substance to back it up," he said. People have thrown the word out: 'Oh, you just sort of merge all the regional carriers and then that would solve everybody's problem.' There is no study to substantiate any merit to that."

Mr. Conway was speaking during a parliamentary sub-committee meeting, which met on Thursday for the first time to discuss the status of the airline.

However, he disclosed that Air Jamaica is pursuing collaborative efforts with other carriers.

"People are aware Air Jamaica led the collaborative effort between the carriers of the region where we are the official carrier of the teams and sponsors for the upcoming cricket (World Cup 2007)," he said.

Fabulous opportunity

But Mr. Conway said the airline was looking outside of the region to form other partnerships. He said one such partnership is being pursued with Latin American airlines, through the introduction of a frequent-flyer programme for all of Latin American and Caribbean carriers.

"There is a fabulous opportunity for the carriers in the Caribbean and the Latin and Central American regions to do something on a collaborative effort," he said.

This, he continued, is because the traffic originating in South and Central America and the Caribbean is growing at a much higher rate than traffic originating in North America.

Last week, Mr. Conway also said the failure of the Air Jamaica Acquisition Group (AJAG) to properly conduct routine main-tenance on the Air Jamaica fleet had contributed to its deterioration over the years.

As a result, he says, it is now more expensive and time consuming to service the planes.

But, in a release, AJAG rejected statements claiming Mr. Conway is casting unwarranted blame on the company to hide the ineffectiveness of the current management.

Proposed intitatives

AJAG also said Mr. Conway had failed to inform the parliamentary committee about the delays experienced in the maintenance of some aircraft.

AJAG returned the management of the airline to the Government in December 2004, having had responsibility for 10 years.

In the meantime, Air Jamaica has proposed several initiatives to be implemented over a two-year period to close a US$100 million financial gap.

The initiatives include the conversion of the current fleet, the upgrading of its maintenance system and the introduction of a cross-island service from the Norman Manley International in Kingston to the Sangster International Airport in Montego Bay.



[/ QUOTE ]

[RichD]

Re: "... more than doubled ... "

[ QUOTE ]
Government of Jamaica considers airline merger
published: Friday | December 8, 2006


DAVIES

Finance Minister, Dr. Omar Davies, says that the Government was willing to explore the possibility of Air Jamaica being part of a merger with Caribbean Airlines.

Dr. Davies made the comments while responding to Opposition Spokesman on Transport, Mike Henry, who, on Wednesday, at the special select committee appointed to examine the financial and operational state of Air Jamaica, had asked whether any serious efforts had been made to find out the practicality of a merger.

Mr. Henry's comments were in response to a Gleaner editorial, which he claimed implied that the management of Air Jamaica had dismissed the notion of a merger.

Dr. Omar Davies, however, stated that he had done his own investigations in CARICOM to find out whether any such study had been done to investigate the cost benefits of such a merger.

"In terms of the establishment of one regional airline, I don't know of any technical work that has been carried out," he said.

"I think that there is obviously scope for us to immediately explore it," he further added.

This he said was especially in light of the recently formed Trinidad-based Caribbean Airlines, which will start flying on January 1.

Caribbean Airlines emerged after the wounding up of the cash-strapped BWIA.

Possibility exists

Michael Conway, chief executive officer of Air Jamaica, also insisted that he had not rejected the possibility of a merger.

"I think the recent comments in today's (Wednesday's) Gleaner editorial seems to think that we dismissed it," he said. "I was merely pointing out that it has just been mostly a notion people have easily throw out, but (with) nothing to back it up."



[/ QUOTE ]

[RichD]

Re: "... more than doubled ... "

[ QUOTE ]
Air Jamaica sanctions new fleet
published: Friday | December 8, 2006

Dionne Rose, Parliamentary Reporter


Michael Conway, chief executive officer of Air Jamaica

Michael Conway, chief executive officer of Air Jamaica, has sought to allay security concerns raised by pilots regarding a proposal to replace the airline's current fleet with Boeing aircraft and 737-300 planes.

The pilots had written three letters to Mr. Conway expressing their concerns about the new fleet being acquired and the long-term implications on savings for the company.

Opposition Spokesman on Finance, Audley Shaw, brought the concerns raised by the pilots to the attention of a special select committee of Parliament appointed to examine the financial and operational state of Air Jamaica.

The committee met at the Ministry of Finance and Planning, on Wednesday.

Dismissed concerns

Mr. Conway, however, dismissed the concerns raised by the pilots. He said that based on accident rates from 1959 through 2005, the two aircraft series being acquired had the lowest accident rate per million departures.

"There is absolutely no safety issue with this transition," he said.

According to Mr. Conway, of the 14 new fleet, six were five per cent less fuel-efficient and eight had a fuel efficiency of more than 15 per cent.

He said the acquisition of the new fleet would allow the company to fill 50 per cent of the US$100 million financial gap that it was now experiencing.

The pilots had further indicated that the transition from the current aircraft fleet to older Boeings would be more difficult.

But, Mr. Conway insisted that the pilots would be successfully transitioned into flying the new fleet as the difference in technology between both was minuscule.

"Particular pilots who for whatever reasons have difficulty making the transition, they will just go through more training until they are actually put in the cockpit, just like they went through when the company made the first transition," he said.

The pilots had also expressed reservations about the company's decision to purchase older planes than it was currently using. But, Mr. Conway said not all the planes would be older aircraft.



[/ QUOTE ]

[Tuff Gong]

Re: "... more than doubled ... "

[ QUOTE ]
Ever thought of if we should demand that roads make a profit and refuse to sink money into their existence,where would the world be??
ever thought that if Air Jamaica was not inexistence to force other carriers to keep their fares down,how expensive it would be to go to jamaic?

[/ QUOTE ]

Another classic bit of nonsensical hogwash.

[Yuriatin]

Re: "... more than doubled ... "

Tuff Gong - what rubbish are you talking?

Don't you know these are simply the basic rules of economics?!

[img]/forums/images/graemlins/704555_dwl.gif[/img] [img]/forums/images/graemlins/704555_dwl.gif[/img] [img]/forums/images/graemlins/704555_dwl.gif[/img]

[ QUOTE ]
[ QUOTE ]
Ever thought of if we should demand that roads make a profit and refuse to sink money into their existence,where would the world be??
ever thought that if Air Jamaica was not inexistence to force other carriers to keep their fares down,how expensive it would be to go to jamaic?

[/ QUOTE ]

Another classic bit of nonsensical hogwash.

[/ QUOTE ]

[Tuff Gong]

Re: "... more than doubled ... "

[ QUOTE ]
Tuff Gong - what rubbish are you talking?

Don't you know these are simply the basic rules of economics?!

[img]/forums/images/graemlins/704555_dwl.gif[/img] [img]/forums/images/graemlins/704555_dwl.gif[/img] [img]/forums/images/graemlins/704555_dwl.gif[/img]

[ QUOTE ]
[ QUOTE ]
Ever thought of if we should demand that roads make a profit and refuse to sink money into their existence,where would the world be??
ever thought that if Air Jamaica was not inexistence to force other carriers to keep their fares down,how expensive it would be to go to jamaic?

[/ QUOTE ]

Another classic bit of nonsensical hogwash.

[/ QUOTE ]

[/ QUOTE ]

More of the same form the Spin....err Medical Doctor!

[ QUOTE ]
If Air Jamaica folds all other air lines would instantly colude to increase their fares to the point where jamaica would become unattractuive to visitors and force the government to pay them to fly there,like many othe countries do,places like Barbados,and Bermuda, Dominican Republic etc etc.

...and i have to do some work too.

[/ QUOTE ]

[Tuff Gong]

Re: "... more than doubled ... "


Speaking of which:

<font color="brown">Eating Dirt</font>
By David P Rowe

Many Jamaicans who reside overseas cannot understand how things are done in Jamaica. We have somehow managed to lose hundreds of millions of dollars, perhaps a billion US dollars at Air Jamaica over a fairly short period, without even a whimper or a judicial inquiry.

Where was the Financial Services Commission when that was happening, as several former pension holders from Air Jamaica ate the dirt, and are still eating it? Current Air Jamaica employees must ponder their ultimate fate.

The Financial Services Commission, in its current form, should be disbanded for that failure alone. It is one of those over-compensated gubernatorial white elephants that morbidly destroy our individual initiative in Jamaica. I agree with the Rev Garnett Roper that many of these new-fangled government agencies only push around the successful little black people, but have little interest in the growth of the economy.

The FSC should be taken off the people’s backs. Despite their attempts to appear prudent, they are obviously making up the rules as they go along in an ad hoc fashion, mostly designed to destroy individual initiative, and with it, Jamaica’s economic prospects.

http://www.sunheraldjamaica.com/editorial5.htm

[RichD]

Re: "... more than doubled ... "

[img]/forums/images/graemlins/70402-thinking.gif[/img]

[ QUOTE ]
Lacklustre Air Jamaica denied tax credits
published: Friday | December 15, 2006


Dr. Omar Davies, Finance Minister with portfolio responsibilty for Air Jamaica, tabled the airline's accounts in Parliament in late November. - File

Air Jamaica Limited has accumulated more than US$220 million of tax credits, which converts to more than $14 billion, but is denied the benefits because of its depressed financial performance.

"The company has a potential tax asset of US$220.2 million," said a note to the airline's financials for year ending December 31, 2005.

"However, this amount has not been recognised in these financial statements, as it is not probable that taxable profits will be available against which deductible temporary differences can be utilised."

The airline also has until year 2015 to utilise US$596.5 million of tax losses accumulated in the past decade, assuming it can return a profit during the period.

Tax freedom

However, given the airline's accumulated losses of US$953 million and no clear sign of it flying in the black in the short-term, it appears unlikely that Air Jamaica's accountants will be called on anytime soon to use these provisions to keep profit in the pockets of its shareholder.

The airline's 2005 financials, released at the end of November, indicate that it still has three years of tax freedom - 15 years less the expired period under the 1994 concession agreement that Government had struck with the Air Jamaica Acquisition Group at privatisation of the airline - meaning it is exempt from corporate tax on any profits or gains made in the period.

At expiration of the concession period in 2009, it has six years to 2015 to utilise the tax losses.

Losses

Another US$64 of tax losses accumulated prior to privatisation are also available for set-off against future taxable profits, but this amount can "be carried forward indefinitely."

Ironically, Air Jamaica's financial losses of US$119.9 million for 2005 were almost equal to the accumulated tax assets.

Those losses - which were inflated by a one-time charge of US$29 million for restructuring that followed government's reacquisition of Air Jamaica from the Gordon 'Butch' Stewart-led AJAG - were partially offset by a US$20.95 million grant pumped into the airline by government, well below the US$30 million cap on new funds committed annually for five years to service the airline's debts.

The carrier's total liabilities of US$642.8 million were also partially offset by a US$6.8 million ($442 million) write off of its debts in 2005, following settlements with creditors, and the conversion of US$416.8 million of debt to 12.84 billion preference shares issued June 2005 boosting the airline's share capital to US$564.1 million in the review year (2004: US$147.3m).

Another US$1.84 million of debt is also due for conversion to redeemable preference shares, but were unissued at balance sheet date.

Government, the sole shareholder, has opted to take zero returns on its preference A shares up to December 31, 2008, after which it will earn a coupon of 3.0 per cent up to year 2013 and beyond that 8.0 per cent, but only if "all previous losses have been eliminated by profits."

Finance minister Dr Omar Davies, who has direct portfolio responsibility for the airline, has the option of converting the shares after 2008.

AirJ's liabilities comprise US$336.7 million of new borrowings, including a US$125 million loan floating rate loan from RBTT Merchant Bank repayable at LIBOR plus 5.5 per cent (the 2005 rate amounted 9.7 per cent); another US$200 million of amortising notes at 9.375 per cent backed by government guarantee; a 7.0 per cent loan of US$11.71 million, the source of which was unspecified but which is repayable in three years up to January 1, 2008.

Other outstanding loans totalling US$65 million plus interest that was owed to National Commercial Bank, US$15 million owed to CLICO Investment Bank Limited of Trinidad, and US$4 million plus accrued interest owed to the National Insurance Fund, totalling US$7.33 million, were all repaid during the review year.

The airline's income/expenditure statement indicates finance costs for the year of US$39.3 million.

As for the airline's financial performance, its largest earner passenger revenues, which totalled US$342 million, was down 19 per cent (2004: US$421.7m), reflecting a loss of market share.

Net revenues were off as a consequence by US$57 million or 16 per cent, ending the financial year at US$305.5 million, compared to 2004's US$362.4 million.

The airline did manage to strip 10 per cent off operating expenditures, but its operating losses of $72.6 million were still higher than in 2004 though only by 1.4 per cent or US$978,000.

Its current liabilities of US$222 million was almost double current assets of US$130 million, resulting in a current ratio of 0.58, which means the airline can only cover 58 cents of each dollar of current liability, if pressed by creditors.

That outturn, however, is substantially better than the 2004 position when the ratio was 0.27.

[email protected]

Breakdown of share issue and paid-up capital

980.78 million ordinary shares US$64.76 million
37.962 million ordinary 'B' shares US$82.52 million
12.843 billion preference shares 'A' US$416.79 million


[/ QUOTE ]