MIKE Conway, Air Jamaica’s president and CEO, defended the change of the national airline’s fleet from A320 to Boeing as part of a loss-reducing measure, saying the Boeing aeroplanes cost less, carried greater payload and offered a wider range for travel.

Air Jamaica which has racked up a loss of $100 million annually for the past 12 years, has a new business plan to cut losses and put the airline on a profitable path.

Maintaining the current Airbus fleet had become a problem as “the supply chain to Air Jamaica has been difficult”, Conway said Wednesday at a forum titled “National Airline – Benefit or Burden”, convened by the Institute of Chartered Accountants of Jamaica (ICAJ) at the Knutsford Court Hotel in Kingston.

Patrick Lynch, Sandals Group finance director and member of the former Air Jamaica Acquisition Group (AJAG) which operated the national airline from 1994 to 2004; Dennis Chung, financial analyst; Ralston Hyman, journalist; and McHale Andrew, research and development advisor to the Caribbean Tourism Organisation (CTO) also spoke at the forum.

Air Jamaica’s financial performance was brought into question after 12 years of losses. Its audited financial statements for 2005 indicate that the airline lost just under US$l20 million for the calendar year and US$99 million in 2004.

Conway insisted, however, that the national airline’s future was “bright” but that there had to be a resolve to see it through.

Rising fuel cost, he said, was severely affecting operations, explaining that each increase of one cent in fuel cost translated to an additional cost of $500,000 per year.

The success of the airline rested with collaborative efforts between carriers within the region, as well as capitalising on Jamaica’s geographic position at the heart of the region, he told the forum.

According to Conway, Air Jamaica would have to rationalise the route system to fit the current landscape and optimise the unique attributes of the region, while at the same time operate aircraft that are affordable and better suited to the mission, hence the Boeing.

He suggested there were possibilities of making arrangements with carriers out of Venezuela and other South American territories to use Kingston as a hub to enter the US.

“That’s where the industry is going and nobody is better able to take advantage of it than Jamaica. Jamaica is at the heart of the region,” he said.

Lynch who represented Gordon ‘Butch’ Stewart, the AJAG chairman who was unavoidably absent, emphasised the group’s marketing thrust which he said tremendously increased customer loyalty.

In recounting achievements during AJAGs tenure, Lynch referred to an MIT study which concluded that Air Jamaica over the 10 years contributed $5.5 billion to the nation’s economy.

Air Jamaica’s development was linked with the development of the country, Lynch said, adding that programmes such as the Air Jamaica Vacations helped smaller properties that did not have marketing capabilities of their own.

According to a 2005 study conducted by MIT’s International Centre for Air Transportation, Air Jamaica contributed US$5.5 billion ($1.8 direct and $3.7 indirect) to the Jamaican economy. For every dollar invested there had been a return of $4.50 to the economy.

However, Conway said that the airline had traditionally been viewed and subsidised as a critical arm of Jamaica’s “tourism model” but at a great cost.

“Notwithstanding the overall net contribution to the country, nobody at Air Jamaica, nobody at AJAG relishes the prospect of getting on the queue asking the government for assistance when you are competing with hospitals, schools.”

Whether in private or public hands, the taxpayers of Jamaica had picked up the tab, a position that was not sustainable for an emerging economy, he added.