
More politics, less Air policy WIGNALL'S WORLD |
Mark Wignall Sunday, November 09, 2008
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If we should begin the trek to discover one of the best examples of pointless politics trumping sensible policy, we need look no further than Air Jamaica. In earlier times Air Jamaica was placed on the board of Jamaica's Air Policy Committee and it still remains there.
Air Jamaica's Chairperson Shirley Williams is not just a political appointee. She knows next to nothing about the airline business. And yet it is my understanding that up to the present time airline proposals which emanate from entities which would be considered competitors to Air Jamaica are routinely passed, as policy, to the Air Jamaica board for vetting and, of course, the usual rejection.
What would have happened if Cable and Wireless, the monopoly in the telecoms market not too long ago, had had Digicel's business plan passed to it by the government? Like any conglomerate, C&W would have loved to have the playing field all to itself, but at that time no such morbid cross-pollination existed in the telecoms policy as now exists in our air policy.
Williams, for all her loyalty to the political fraternity of her choice, must ask herself if her tenure in the long run yield any good fruit to the very politics which pivoted her to the top post on the Air Jamaica board.
In early 2007, a colleague of hers, Ruddy Spencer, then head of the BITU and Opposition MP, said, "Nobody is aware of what Air Jamaica wants to achieve, but the airline has potential, if only there was a clear vision." One would have thought, now that they accupy the seat of power, that 22 months after Spencer made that statement and 14 months since the JLP government took the political reins of this country, the vision would have been more clearly defined. As it is, Spencer, now the Minister of Health, needs to whisper something in Williams' ears like, 'Shirley, have you developed that vision yet?'
The airline's divestment investor presentation produced by the IFC and Air Jamaica admitted to two areas of mismanagement. First it said that 'the current problem of air Jamaica is cost control.' Second, it said that Air Jamaica leads the market in high fares, extracting one of the highest revenues per passenger per mile - US$0.185 as against AA at $0.165 and Spirit at $0.11.
The airline consortium known as Airone has announced its intention to bring in US$400 million per year. Air Jamaica racked up losses of US$170 million in 2007; that is expected to rise to $200 million at the end of 2008. The big difference is that Airone's overriding objective is to provide a no-frills, low-cost airline which would open up the air space to affordable travel for (more) Jamaicans while Air Jamaica is still beyond the reach of most Jamaicans, and it is bleeding the taxpayers dry.
In the last 10 years Air Jamaica has posted losses of US$1 billion. With all the talk of divestment, which seems to be more talk than plan, it would not surprise me if another business plan from Air Jamaica were submitted to government for its approval and an even slower death for the taxpayer.
Let us get one thing clear here. If the government wants to place its political appointees in positions where they have the power to encumber our children and grandchildren with the decisions of today, the very least we expect of those appointees is that they keep us in the loop on policy. So let me ask this. Where are we with the divestment process? Has the board developed a timeline or is the nation being invited to a political charade? Where is the transparency which the Air Jamaica board promised us three years ago? Indeed, where is the transparency that the government promised us 14 months ago?
Lastly, if the March 2009 deadline runs out and we are told that the process is still. in progress, must we take it that the taxpayers of this country will again be asked to foot additional bills, when it is as plain as day that no member of the Air Jamaica board is an expert in the global airline industry, yet this is the same entity intervening to block other players in the market? How does the government seek to define and manoeuvre its way through airline policy by having proposals sent to the Air Jamaica board? That's almost like asking Sarah Palin where in South America Cuba is situated. You will get an answer.
Minister Mike Henry who prides himself on being quite a knowledgeable man must catapult that knowledge into 21st-century thinking and end Air Jamaica's inclusion on the Air Transport Policy Board. Sure we know the government is overburdened with stuff, but we also know that the transport minister would like to see a smooth transition in the sale of Air Jamaica and a lessening of the burden on the taxpayer.
Surely it is not far-fetched to suggest that one of the main reasons for Air Jamaica's problems - cost control, as it has admitted - could be the MAIN cause of its unprofitability. Air Jamaica has one member of staff to 680 passengers, while other airlines are in the ratio of one staff member to 8,000 passengers.
Again, how can the government embrace the sort of archaic thinking that has 'energised' the AJ Board to stick the taxpayers with another US$200 million this year? If the government wants consultancy, all it has to do is open the pages of the World Bank 2006 report on aviation in the Caribbean.
SHIRLEY WILLIAMS MUST GO
In this country, no one holding political office is ever accountable to the people. Persons like Williams are good, decent people who mean well. I am sure that the AJ chairperson has other strengths and she may wish to consider other options at this time, especially after her recent action of ordering the return of a plane taxiing to take off (to pick up a VIP) should have resulted in her resignation.
If the chairperson is honest with herself, she will admit that political appointments to commercial organisations require the person to possess area-specific skills rather than naked loyalty to a political party. Ms Williams must also admit that, when board members of AJ seek indemnity, this sends a signal that the airline is heading from the hospital to the morgue.
While I agree with the indemnity, I cannot help but think of the new freedoms gained by the board to begin digging the grave for Air Jamaica.
With Williams in control of the AJ Board, she actually wields significant power in scripting air policy, and she has the power to block Airone from ever flying over the Jamaican skies.
How in God's name can it be that the board of a commercial entity, headed by a political appointee who has demonstrated that she is out of her depth in running AJ, is at the same time sitting as judge and jury over Airone's proposal? Madness of the hightest order, but in Jamaica, under a 'new and different' JLP, it's par for the course.
I have already stated that as much as we may have wanted to maintain the love affair with nationalism, the fact is that Air Jamaica has decided against asking the public to invest in the ownership of the airline simply because it is easier to suck the blood out of suffering Jamaicans by forcing them to contribute their hard-earned dollars to keeping an albatross around their own necks.
Now that we know we will never be asked to invest in the high-fare-structure Air Jamaica after being told that it is to be divested, why must the nation continue to feel the influence of the AJ board outside of its remit?
Airone has promised the people of this country much, much cheaper fares than those charged by Air Jamaica. Isn't that supposed to be a politician's dream? The Transport ministry has not told us that it has found any faults in Airone's proposal, so why should a board and a chairperson presiding over a continually failing entity be in a position to decide the fate of a potentially profitable airline?
The logic doesn't fit. No one really wants to see Air Jamaica out of the skies. What it needs is new direction and management, something presently absent from its make-up.
Minister Mike Henry has his job cut out for him. He has to take hold of airline policy in Jamaica and wrest it from the sort of politics which dictated our lives in the 1970s and 1980s. It is backward thinking to believe that Airone will not be able to revolutionise air travel as Digicel did to the telecoms market. Is this all happening under the government which promised us 'Jobs, jobs and more jobs?' Which jobs? Those on various boards?
Minister Henry must step in now and end the charade. First, he must end the association of the AJ Board with the Air Transport Policy Board. Surely if and when the airline is sold, such an association will be immediately terminated. So, why not do it now?
Second, he must decide whether the administration he is part of represents the people of this country, or whether it exists to secure posts for political appointees. He must then have his independent technocrats scrutinise the proposal from Airone and make a decision in due course.
Lastly, he must ask himself if the people of this country deserve to be saddled with more taxes, more inefficiency and less transparency after over 18 years of 'runnings' by the last PNP government. Surely the people of this country deserve better, Mr Minister.
observemark@gmail.com
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