wehby. says the Ministry of Finance is working towards creating a more efficient and financially viable airline

The country's two leading trade union organisations, the National Workers Union (NWU) and the (Bustamante Industrial Trade Union (BITU) are actively encouraging certain categories of employees attached to Air Jamaica to continue with their strike action which commenced last Friday.

The wage dispute centres around contracts that expired in December of 2006 and May of 2007 respectively. The trade unions are demanding wage increases of 15 per cent at a time when the government is seeking to divest the airline which is costing tax payers J$10 billion a year. Last year alone Air Jamaica made a loss of US$173 million.

The Business Observer managed to obtain a copy of a letter written by the President of the BITU, Kavan Gayle, dated May 2, 2008 addressed to the Minister without Portfolio in the Ministry of Finance & Public Service, Senator Don Wehby, outlining the union's rationale for its claims and urging the government to proceed with negotiations. The letter reads:
"The Bustamante Industrial Trade Union wishes to once again raise concern relating to the undue delay in commencing wage and fringe benefits negotiations on behalf of certain categories of employees attached to Air Jamaica.

"We have submitted wage claims on behalf of certain ground staff and inflight employees. These claims sought to amend contracts that expired in December of 2006 and May of 2007 respectively."

The strike action comes at a time when the government is now courting bidders for the airline and is actively seeking means to stem its continued losses. The unions counter that with spiralling inflation, wages should match the cost of living regardless of the state of the airline and attempts to sell it. One industry insider speaking under condition of anonymity said: "Why would the unions urge Air Jamaica workers to go on strike at this time when they seek to amend contracts going back to well over a year ago. Can't they see that their efforts at this time will only serve to cripple the airline? How can you negotiate for astronomical pay rises when the airline is bleeding red ink . It just doesn't make sense."

The president of the BITU's letter dated May 2, 2008 continues: "Whilst we understand that the Ministry of Finance gives directives and parameters to Air Jamaica to facilitate their pursuance of these negotiations the Ministry must understand and appreciate the difficulties that these workers face. The Air Jamaica employees have been undergoing harsh economic conditions over a sustained period and are currently overextended financially.

"This union will hasten to point out, that in the past even during times such as these the workers were accustomed to attaining at least a cost of living adjustment to alleviate the pressures."

According to government officials, airline workers went on strike last Friday with the unions giving no notice that strike action was imminent. Inflation and the rising cost of living is affecting the entire country and wage restraint will be a hallmark of this fiscal year as the government attempts to reign in expenditure. Only last week the Governor of the Bank of Jamaica, Derick Latibeaudiere said that with prevailing conditions he is now revising his inflation forecast for fiscal year 2008/2009 from single digits to between 11.5 to 14.5 per cent., a range which many view as very optimistic.

In response to the President of the BITU's letter, Senator Wehby wrote on May 9, 2009: "I wish to assure you that your concern as expressed in your letter, dated May 2,2008, that the employees of Air Jamaica are having difficulties given the prevailing economic circumstances, has not been lost on the Government of Jamaica, indeed we are concerned for all of our citizens.

"We must, however again reiterate the dire financial problems that the airline is now facing. For the twelve months ended December 31, 2007 Air Jamaica sustained a net loss from operations that is before Government of Jamaica subsidies of US$173.93 million. The preliminary figures for the first quarter of 2008 are no better. As you are no doubt aware the global environment, with skyrocketing fuel costs, has been less than ideal for the aviation industry. In fact a number of smaller airlines have had to shut down operations completely over the past three months."

Wehby further points out that any increases to the employees, temporary or otherwise, can only be determined by Air Jamaica's ability to pay.

"The Ministry of Finance is presently pursuing a number of strategies towards creating a more efficient and financially viable airline. As such I am seeking your restraint and patience while we navigate these times. Any industrial action at this time would aggravate these losses, making the situation worse for all stakeholders, wrote Wehby, responding to Kavan Gayle's letter.

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