Caribbean Airlines operations in Jamaica have been hit hard by increased competition on its routes and rising fuel prices. Clive Forbes, general manager of Caribbean Airlines, has admitted that the entity is trying to remain viable amid what he described as a difficult environment. “We face difficult climate, competitive pressure…we continue to fight for market share and, given the nature of the fuel price and everything which eat into our margin and the competitive nature of other routes out of Jamaica and that is where the crunch is coming in. But we still have customer loyalty, we appreciate the support of our customers from the Diaspora, the tourism sector and all those who continue to support Caribbean Airlines in and out of Jamaica,” said Mr. Forbes.
Fly Jamaica airways one of the new competitors in the CARICOM marketplace started flight operations on Feb 14, 2013, and are a source of pride for Jamaicans in the skies. With service to John F. Kennedy International, New York, USA, four times per week from Kingston. A year later, the airline is operating seven days per week from KIN to JFK, Toronto, Canada (YYZ) and Georgetown, Guyana (GEO). Their route structure offers direct flights from Kingston, Jamaica (KIN) to Georgetown, Guyana (GEO) (Approximately Three hours flying time) and is expected to increase tourism and trade between the two CARICOM countries.
In mid-December, Fly Jamaica airways commenced service between Kingston and Toronto, using its B-757 aircraft. Air Canada and West Jet have also increased service on the route. The success of the Jamaican carrier have been celebrated by the islanders tourism interests who have been working for several months to reinvent their marketing and promotions machinery in response to the withdrawal of the name Air Jamaica from key destinations.
The challenges facing airlines in the Caribbean region is one of economic sustainability and efficiency. Greater economic integration requires airlift, routes and capacity issues to positively impact CARICOM countries trade and tourism. Regional governments have heavily criticized Trinidad and Tobago government for applying unfair subsidy to Caribbean Airlines, violating CARICOM rules. Negotiations among heads of governments have led to T/T’s government having to withdraw fuel subsidy. Low cost start up carrier RED jet, a privately owned carrier in Barbados suspended service and closed its operations because of financial troubles and not being able to benefit from state sponsored subsidy.
Caribbean Airlines Ltd (CAL) was launched in 2007 after the failure of BWIA (British West Indian Airways).In 2010 the airline merged with Air Jamaica and soon unveiled plans to restructure its operations. Coping with over US 200 million in losses since the takeover due to rising fuel cost and administrative expenses, cost cutting measures have led to the termination of staff, including pilots represented by the Jamaica Airline Pilot Association (JALPA). The government of Jamaica which holds a 16 % stake in the airline has been tested by the new relationship. In the wake of decisions to cut back the number of Caribbean Airlines flights to Jamaica. Prime Minister Portia Simpson Miller called for the withdrawal of the Air Jamaica brand from Caribbean Airlines. New foreign air partners have been invited to take over the reduction in airline capacity on the affected North America to Jamaica routes. The Trinidad and Tobago and Jamaica mutual cooperation in the skies have been consolidating into a single Caribbean airline for English speaking CARICOM member countries. Talks are underway for the privatization and merger of Caribbean Airlines with BahamasAir, LIAT and Cayman airways.