KINGSTON, Jamaica, September 25, 2008 – Jamaica’s Tourism Minister Edmund Bartlett has defended the government’s controversial US$4.5 million guarantee deal with American Airlines (AA), saying that with nearly 3,000 new hotel rooms to fill this year, the additional airlift which the carrier will provide is critical.
The agreement, under which AA will guarantee over 2,000 additional seats to the island, comes ahead of the start of the 2008/09 winter tourist season, and at a time when the Caribbean is experiencing severe cutbacks in airlift. Mr Bartlett sought to make it clear that under the arrangement with AA, “the government is not paying out US$4.5 million to American Airlines, but has only provided a guarantee for additional seats which I am confident will be filled”.
He said that as the country’s Tourism Minister, it would have been irresponsible of him not to do anything to help the island bounce back from the downsizing of airlines like AA.
“Doing nothing was therefore not an option. We had to be proactive to guarantee the tourist industry a network of air service to protect the local tourist industry. Any other decision would have been a disservice to Jamaica,” he said.
Mr Bartlett explained that the arrangements secured flights that are critical to the markets of the west, south, and northwest United States.
“A key reason for signing this deal was the access to the feeder markets that American Airlines affords with over 200 flights daily. Last year, over 40 million people travelled through its Dallas hub, and over 20 million through its hub in Miami,” he said.
“The addition of the Chicago route was critical to building our mid west market using the Chicago gateway. Though United Airlines and Air Jamaica served this route, the uncertainty of United Airlines and the resistance to Air Jamaica, left the market dependent on charters, that were once weekly and only on a Monday. Though we were grateful for the Monday service, we could not grow our tourist market on such a frequency.”
The Tourism Minister pointed out that the government’s deal with AA was not unique to Jamaica. In fact, he said, revenue guarantee is a common industry practice.
“As all of our neighbours were aware that the Caribbean was one of the regions marked by American Airlines for reduction in air service to begin in September 2008, we find that many of them have similar arrangements with American Airlines. Thus Jamaica is not the only country with this arrangement.
“Indeed seven of our regional counterparts – who will remain nameless for obvious reasons – who saw the value of AA service, its frequent flyer mileage clients, its connection across the USA, with Europe and emerging markets in the Far East, have entered into similar arrangements with American Airlines. Other Caribbean destinations are also currently discussing applying this well-established practice to secure their winter airlift,” he added.
“The world has changed and the Caribbean must respond. When American Airlines reduced their Eagle hub services from Puerto Rico to the Caribbean by 75 per cent in addition to cutbacks in service from JFK (John F Kennedy International Airport) and MIA (Miami International Airport) to the Caribbean, preemptive action was critical. It comes as no surprise that other Caribbean destinations have also had to enter into arrangements to secure their winter airlift. Those who have hesitated may find themselves short of the seat requirements to meet their needs,” the Tourism Minister added.