Air J declined while new owner soared
LAST January would have marked the twenty-eight consecutive month of decline in revenue passenger miles (RPMs) to and from the US for Air Jamaica, even while its new owner — Caribbean Airlines (CAL) — saw a near doubling of its passenger carriage over the same period.
What’s more, according to the US Bureau of Transportation Statistics (BTS), the former national carrier, which was enjoying increases in the amount of plane seats filled up to March 2010, has since only seen decline in its load factor — the number of passegers carried as a percentage of seats available.
The Government commenced planning of its divestment strategy for Air Jamaica in late 2008 and two years later agreed to sell the airline to its Trinidadian counterpart.
But during that time, Caribbean Airlines was undertaking an aggressive expansion thrust into the US from the region, increasing its RPMs — the number of miles travelled by paying passengers and a reflection of potential revenue — from 416 million in 2007 to just under a billion by the end of 2009.
Conversely, Air Jamaica saw its RPMs fall from 1.4 billion in 2007 to 1.1 billion by end of 2009. However, during 2010 — the year that CAL took over Air Jamaica — the former national carrier saw its RPMs plummet to 744 million by the end of 2010, even while its new owner increased its passenger movement to the US from the region and back by a further 10 per cent to 1.1 billion RPMs.
The increase for CAL involved a considerable increase in flights to and from the US — from 1,752 in 2007 to 4,005 in 2010 — which meant that the Trinidadian-based airline was able to move more passengers over longer distances, given that it primarily serviced the eastern Caribbean before taking over Air Jamaica. Air Jamaica, on the other hand, saw a cut in flights — from 9,508 in 2007 to 5,862 last year — coupled with a reduction in passengers from 1.4 million in 2007 to 744,000 last year.
But the reduction in flights didn’t actually improve a fundamental performance measure — load factor. Air Jamaica’s load factor, which climbed from 70.29 per cent (meaning 70 per cent of the seats were filled) in 2008 to 76.64 per cent in 2009, fell again in 2010 to 70.59. Over the same period, CAL did manage to maintain a much higher load factor for its own fleet — 86.67 per cent in 2008; 86.01 per cent in 2009 and 85.48 per cent in 2010.
Since July 2010, CAL had been carrying more passengers under its own brand than Air Jamaica, although, in a press statement issued in April 2011, Air Jamaica said “there was a 15 per cent increase in passenger numbers for March when compared to the same period in 2010”.
In January 2011, however, the passenger count for Air Jamaica was 50 per cent lower than a year before while load factor was at 62.4 per cent.
At least one performance measure (not measured by the BTS) has improved since CAL took over the airline — “Air Jamaica’s On Time Performance (OTP) increased by an average of three per cent each quarter since Caribbean Airlines acquired Air Jamaica operations on 01 May 2010”, according to CAL.
“Year-to-date OTP average for Air Jamaica in 2011 is 78 per cent; a 14 per cent increase for OTP recorded for the same period in 2010. Caribbean Airlines continues to excel in pursuit of excellence and to be the preferred airline of choice for the region,” said a April release.