Spirit Airlines reportedly buys Air Jamaica

Some interesting rumors are circulating around the tropics - acccording to the Jamaica Gleaner, US ultra-low-cost-carrier and Ryanair-wannabe Spirit Airlines will purchase perennially unprofitable state-owned flag carrier Air Jamaica, which could be renamed "Spirit of Jamaica." The news comes only days after Radio Jamaica reported that the Jamaican government's Privitisation Committee, set up to find the best buyer for the airline, recommended that either Trinidad-based Caribbean Airlines or British charter airline Thomas Cook should be the one to make the purchase. Spirit Airlines spokesperson Misty Pinson refused to confirm or deny the story, only saying to The Airline Blog, "We don't comment on market rumors."

In preparation for the sale, the government installed Bruce Nobles, the same person who oversaw restructuring at Hawaiian Airlines, as president and CEO. Nobles realized, pretty quickly, that Air Jamaica's fleet utilization was poor and vowed "to fly the airplanes as much as you can to generate revenue." He also dropped routes to Atlanta and Miami, and instead used the aircraft on routes where they made money. Nobles also noted that one of Air Jamaica's main problems was that it lacked capital; "Air Jamaica spends too much money because it does not have any," he said, and has since secured more cash for the carrier.

Evidently, he's done a pretty good job of fixing up the airline; those who thought that there would be a mid-summer snowstorm in Montego Bay before a profitable Air Jamaica might be surprised. Nobles says that the airline, which has never made a profit, could break even as soon as December and may actually become profitable in 2010. Especially given the current economic environment, that's quite an accomplishment. The fact that Spirit's owners, Indigo Partners and Oaktree Capital, are interested in buying Air Jamaica has to be a testimonial to the airline's improved financial condition.

Of course, if the sale turns out to be true, it does raise a few unanswered questions. Would Air Jamaica turn into an ultra-low-cost-carrier, along the lines of Spirit? Many in Jamaica would probably cringe at the thought of their national airline becoming another Spirit, which is known for its Ryanair-like disregard for passenger service (according to the Department of Transportation, Spirit had the most complaints in 2008, with 14.3 per 100,000 passengers; US Airways, with 2.0, came in second). Perhaps Spirit might run the carrier separately, keeping its existing (and newly-profitable) business philosophy and using it to feed Caribbean traffic into Spirit's US operations (and vice versa). But here, the 'feed' strategy might not be successful - for a start, the two airlines serve different airports in New York (Air Jamaica at JFK, Spirit at LaGuardia). And the discrepancy in the current levels of service offered by the airlines might be off-putting to some travelers, too.

photo by Matt Coleman - BNA-Photo on Flickr


Anonymous said...

As a concerned citizen of Jamaica, an aspiring pilot finishing a Master's program within Professional Aeronautics with a specialization in management and safety, I find the notion to "sell" the one thing that we are somehow recognize for as far as the world of aviation is concerned, very disturbing and quite upsetting.
We have sold everything in Jamaica to foreign immigrants and businesses, and therefore we own nothing due to our greed and corruption. We have sunk our flagship and have stoop to levels of no coming back, bending over to whoever, whenever without a backbone to kneel for everything and stand for nothing.
Is this the move we want to make as a people, as a government, as a society? I am ashamed, I am very disappointed with a mixture of rage to see what we are becoming, " a country of sell outs". No future for our youths, nothing to use as a reference point in a conversation for our past.

Anonymous said...

From a managerial standpoint, it may be feasible to some individuals pockets and bank accounts, but for a country, by selling this airline we will not be able compete in aviation as so many countries are not able to, we will not have a say in the a direction or anything that has to do with the airline, any revenue will be used for other purposes than that of our own to help build our country and knowing the track record of Spirit for commitment, service, fees and management, we are surely doomed.