250m to park - Air Jam plane accumulates fees in France

[evanovitch]

250m to park - Air Jamaica plane accumulates fees in France
published: Wednesday | March 19, 2008

Janet Silvera, Senior Gleaner Writer

WESTERN BUREAU:

After five months of sitting in a hangar in France, an Airbus 340 leased by Air Jamaica will cost the country US$3.5 million (J$250 million), payable to International Leasing and Financial Corporation (ILFC).

The airline has confirmed that the Airbus, which should have been returned to ILFC upon the sale of Air Jamaica's Heathrow slots to Virgin Airways, has been sitting in the maintenance facilities at Sogerma in Bordeaux, France.

Air Jamaica Chairman Shirley Williams said the plane is to be released next week. She said the airline was at odds with the airbus maintenance facility where the aircraft was sent for a C-Check.

[evanovitch]

Re: 250m to park - Air Jam plane accumulates fees in France

Air Jamaica pays an average of US$690,000 (J$49 million) per month for the leasing of an airbus - a total of US$3.5 million (J$250 million), plus unknown amounts in insurance costs.

The revelation comes at a time when Air Jamaica is about to commence a fight, in the US courts, with Federal prosecutors who have sued the airline, alleging that it failed to immediately correct damage to a plane and, consequently, flew the plane 58 times in "an un-airworthy condition".

It also comes at a time when the airline is anxiously searching for an investor to grab its proposed divestment and in the midst of losses amounting to $100 million annually.

In the last three months, the airline has been forced to cut staff in its overseas offices and is currently in the market searching for a company that can maintain its fleet.

[evanovitch]

'Open skies' devalues Virgin deal

'Open skies' devalues Virgin deal
published: Wednesday | March 19, 2008

WESTERN BUREAU:

With the dawn of 'open skies', air carriers at London's Heathrow Airport are fetching more than four times the amount that Air Jamaica reportedly received when it sold its slots to Virgin Atlantic Airways approximately eight months ago.

Continental Airlines has reportedly paid US$209 million (£105 million) for four pairs of slots, according to a United States Securities and Exchange filing cited by a report in The Mail on Sunday, while Air Jamaica is said to have earned £5.1 million (approximately J$700 million) on the sale of seven slots.

The Air Jamaica route was sold to cut annual losses of US$25 million, making the London route the national carrier's top lossmaker.

It was reported in the Financial Times that GB Airways, Air France and Alitalia sold the slots to Continental which will pay US$116 million for the summer season and an additional US$93 million for the next winter schedule.

Commenting on the new developments, Air Jamaica Chairman Shirley Williams noted that while in opposition, the Jamaica Labour Party (JLP) said the slots ought not have been sold, and "we maintain our stand, and are now vindicated because we could have gotten more than US$209 million for the seven slots".

Value should have been anticipated

She said the decision to sell was a precipitous one, "Everybody in the industry knew the open skies agreement was coming, so we should have anticipated the value of the slots."
However, a former member of the Air Jamaica board said the slots were irregular and did not have the same value. "The Air Jamaica slot wasn't a prime slot. It wasn't in the morning, they had different arrival and departure time each day. Air Jamaica slots had different arrival and departure on different days."

The board member said it, therefore, consumed a lot of plane hours, sitting and waiting for take-off, while reducing available flying hours.

"We could just not afford to continue to lose what was then US$2.5 million per month."

The European Union-US Open Skies Agreement comes into effect on March 30, after being signed in Washington, DC on April 30, 2007.

The agreement allows any airline of the European Union and any airline of the United States to fly between any point in the European Union and any point in the United States. Airlines of the United States are also allowed to fly between points in the European Union.

The near-bankrupt Italian airline Alitalia has sold some of its coveted landing slots at London's Heathrow Airport for a record £30 million, said a report from the Financial Times in December 2007.

[sistactry]

Re: 'Open skies' devalues Virgin deal

dyaaammmm, dats a lot of money to pay to park~~ [img]/forums/images/%%GRAEMLIN_URL%%/70392-silly.gif[/img]

[Magician]

Re: 'Open skies' devalues Virgin deal

When you lease an airplane from a leasing company, at the end of the lease you have to return it back in the same exact condition that you got it in.

Well the plane in question is "Mike Charlie" that was one brukdung ting that always need sintn fi glue-back. So mi not surprised at all that ILFC nuh waan it back.

So it might can take a few more months to get it back into decent shape.

[andronian2]

Re: 250m to park - Air Jam plane accumulates fees in France

If a mi dem kuda kippi.
Fi dem breed a money de yu no kyan get new plane.

[Magician]

Re: 250m to park - Air Jam plane accumulates fees in France

Well AirJ trying to get rid of the plane anyway. After London service finish last year they don't need the two A340's. The other one they still keeping in the KIN-JFK service and occasionally on the KIN-YYZ (T.O.) flight.

I'm sure the powers that be didn't expect the leasing company to give them grief.

That's what happens when you have government running an airline. [img]/forums/images/%%GRAEMLIN_URL%%/eek2.gif[/img]