Ja's success sparks airlift pacts in EC

Tuesday, March 02, 2010

The success being enjoyed by Jamaica's tourism industry from the Government's revenue guarantee airlift deal with American Airlines has pushed islands in the Eastern Caribbean to do the same, according to leading hotelier Josef Forstmayr.

"The Eastern Caribbean looked at what Jamaica did a year-and-half ago and have now jumped on it in a big way in order to get airlift," Forstmayr told the Observer in an interview on Sunday.

"They're paying for flights. They're paying Delta, British Airways, Virgin to fly into their destinations; they're paying them cash up front," he said.

Forstmayr was commenting on the deal which John Lynch, the director of tourism and chairman of the Jamaica Tourist Board, said had earned the country approximately US$50 million (not US$150 million as reported in yesterday's Observer) and will cost taxpayers US$2.8 million.

Under the deal, Jamaica had guaranteed American Airlines US$3 million to keep flying here from Dallas, Miami and Chicago, three gateways that provided just about 81,000 passengers combined.

But the deal proved controversial, attracting criticism from the political Opposition and was the subject of a probe by the contractor general.

Last weekend, Lynch, in an interview with the Observer, reported that the deal had worked in Jamaica's favour, bringing increased visitor traffic at a time when other destinations in the Caribbean had seen declines in their arrivals and earnings.

Forstmayr corroborated Lynch's report and described the decision to enter into the arrangement with American as brilliant.

"Revenue guarantees are there to ensure that one, there's a sense of protection for the airline to know that they can't sink; and two, it's a sign to the airline that the destination is aggressively engaged in ensuring viability," said Forstmayr.

He suggested that the airlines' main focus in this type of arrangement is not the money paid to them by the destinations. "What the airlines want is to ensure that there is aggressive promotion of the destination that can make their flights profitable," he explained.

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Ja's success sparks airlift pacts in EC