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Airlift crisis looms

Air J at the mercy of US Department of Transportation

BY INGRID BROWN SENIOR STAFF REPORTER browni@jamaicaobserver.com

Thursday, April 01, 2010    

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AIR Jamaica could be forced to shut down prematurely, leaving a major gap in air seats to the island, if the United States Department of Transportation (DOT) turns down an urgent request the national airline is making.

On March 24, the airline wrote to the DOT asking for permission to continue to operate on the terms of its existing authority during the six-to-12-month transition period expected under the divestment agreement with Caribbean Airlines Limited (CAL), which is to take effect on April 12, 2010.

Failing that permission, the airline is asking the Americans for an urgent waiver of the DOT's standard ownership and control policy, in order for it to maintain services for the one-year period under its Transitional Services Agreement (TSA) with Caribbean Airlines.

It was not clear what led Air Jamaica to make the request at the eleventh hour, but the airline left no doubt that it needed a decision immediately.

"Air Jamaica respectfully requests the Department's expedited consideration of the matters raised in this letter, with a definitive DOT determination by no later than April 5, 2010," the airline's Washington-based counsel, George Carneal, wrote.

"Absent the economic support derived from such an interim structure, Air Jamaica would face the prospect of a near-term shut down, which would have a catastrophic impact on the approximately 1,900 personnel employed by Air Jamaica/Air Jamaica Holdings, countless booked passengers, and the vital tourism industry in Jamaica which relies so heavily on adequate air transportation services," the letter warned.

It was not immediately clear how the US would react, given the stand-off between Kingston and Washington over the stalled extradition of Tivoli Gardens strongman, Christopher 'Dudus' Coke.

The Bruce Golding Government said it would not bow to US demands for Coke whom they want to face trial on gun and drug-trafficking charges. Jamaica said the US evidence against Coke was obtained in breach of his constitutional rights.

Reached last night by phone overseas, Chief Executive Officer of Air Jamaica Bruce Nobles confirmed the contents of the letter, a copy of which was obtained by the Observer, but would not speculate.

As part of the transit agreement, Air Jamaica would continue to operate under its existing authority under the contractual agreement with Caribbean Airlines and "we are asking the Department of Transportation for their concurrence with that strategy", Nobles said.

Asked what the implications would be if DOT does not return a favourable response by April 5, Nobles admitted "it is unclear".

"There are different opinions about what might happen or not happen if the determination has not been made and it is premature to try to speculate," he said.

But in the letter to DOT, Carneal noted that prompt implementation of the required interim structure was essential to ensure Air Jamaica's continued commercial operations during the transition period, until such time as CAL was able to take over key Air Jamaica routes.

"In the event the department nevertheless concludes that as a result of this arrangement Air Jamaica no longer satisfies the "effective control" requirements, Air Jamaica hereby requests a limited, short-term waiver of DOT's ownership and control policy to the extent necessary to allow Air Jamaica to continue operations for up to one year under its DOT exemption authority," Carneal asked.

The letter stated that pursuant to a TSA beginning on or about April 12, 2010, Air Jamaica planned to continue to operate under certain Jamaica-US routes authorised by its "open-skies" DOT exemption authority.

This includes continuation of Jamaica-US routes under its JM designator code, homeland Operating License, Air Operator Certificate, and US operations specifications and economic authority.

"The carrier's key management personnel (as required and approved by the Jamaica Civil Aviation Authority), as well as a limited number of other personnel necessary to maintain Air Jamaica operations, will remain direct Air Jamaica employees for as long as Air Jamaica continues air transportation services under its licence and AOC," the letter stated.

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