Business
Caribbean Airlines to drop Air Jamaica brand
The Civil Aviation Authority of Trinidad & Tobago (CAA) has instructed national carrier Caribbean Airlines (CAL) to drop its Air Jamaica brand from its aircraft.
The use of the Air Jamaica brand does not comply with Caribbean Airlines’ airline operator certificate.
Despite the acquisition of Air Jamaica routes, Caribbean Airlines is not licensed to operate two brands but has been doing so for over a year.
For Caribbean Airlines to use the Air Jamaica brand, it will have to register a new airline in the name of Air Jamaica.
Caribbean Airlines, was alerted about this disparity by the CAA a few months ago as it sought to improve its systems ahead of a planned audit by the international Federal Aviation Authority.
In the short term, the Caribbean Airlines will need to repaint Air Jamaica’s six planes at a cost of US$60,000 an aircraft.
Caribbean Airlines’ investment in Air Jamaica has already been costly – in addition to an initial US$50 million for acquisition of routes, former finance minister Winston Dookeran had disclosed to Parliament that Air Jamaica recorded an unaudited loss of US$38.1 million in 2011.
Caribbean Airlines’ investments which approximate US$149 million, have had to be liquidated to address the costly operations of Air Jamaica.
The business plan for the Air Jamaica operations for the months of May to December 2010 forecast a profit of US$4.6 million and $16 million for 2011. However, data obtained show the actual performance for the Air Jamaica operation from May to December 2010 was a loss of US$21 million “for various reasons” and US$38 million for 2011.
The government of Jamaica owns 16 percent of Caribbean Airlines, following the consummation of a shareholders agreement which was signed on May 26, 2011.