Bruce Nobles, president and CEO of Air Jamaica.

Air Jamaica followed through this week on its planned cut of six routes from its North American and Caribbean itinerary, but the airline will continue to do business through those gateways, contained to the movement of cargo which it finds far more cost-effective to fly than people.

"Our cargo operation is a profitable business for us, " said Air Jamaica president Bruce Nobles.

"The cargo revenue exceeds our incremental cargo cost, so we will continue to carry cargo."

Nobles was unwilling to comment on the margins of profit he made from this business line, but annually Air Jamaica grosses about US$17 million per year on cargo. For 2007, the most recent figures available, revenue fell to US$15 million, from US$17.8 million in each of the previous two years, according to Planning Institute of Jamaica data. Air Jamaica's peak year for cargo in the past five was US$19 million in 2003.

Nobles suggests that he has more flexibility to leverage income from cargo, now that he has dropped passengers from his schedule.

"Depending on the time of the year we can carry more or less cargo, for example, we would not have space for much cargo during the holidays, as Jamaicans normally travel with a lot of luggage, but under normal circumstances we do carry cargo along with bags and we will continue to do so."

Five plans grounded

The routes cut are Barbados, Grenada, Grand Cayman, Los Angeles, Miami and Atlanta. Five of the airline's 15 planes will be grounded come Thursday, while one has been leased to a Chinese airline.

A number of the workers will be made redundant.

"We will have less planes flying, so we will have less need for human resources on these routes, but we are yet to finalise how much will go," Nobles said Tuesday.

Air Jamaica has been struggling for decades to find its footing, but Jamaica has now given up on making the airline profitable and is in the midst of offloading the loss-maker. In the midst of negotiations, Nobles is also tasked with paring and trimming the operation - gussying it up for potential suitors.

He has a big task, and has begun with job cuts and fewer routes. The airline is losing between US$150 million and US$200 million per year, and has accumulated a deficit of US$1.3 billion.

The airline lost US$171 million in 2007 and was expected to haemorrhage another US$200 million at year end December 31, 2008.

Sale deal

The Golding administration, with Senator Don Wehby as pointman, is hoping to land a sale deal by March 31, otherwise it would have to carry the airline for another year as a subsidised operation on its books.

Government is committed to financing of at least US$30 million per year for the carrier - funds it does not have.

Nobles, to run the airline until it is sold, says the cancellation of the routes is unlikely to impact the volume of travel from those destinations.

"There are a lot of alternative ways for tourists to get to Jamaica," he said. "Delta has three flights a day from Atlanta to Jamaica and they are never full, while we have one, so Delta can easily absorb all of those passengers without any impact on tourism at all."

He argued that there are at least five different ways tourists can get from Los Angeles; and as for Miami, Grand Cayman, Barbados and Grenada, no tourists from those destinations fly Air Jamaica, he said.

"So I don't believe our decision will have any impact on tourism at all, but there are lots of ways and capacity for people to get here."

mark.titus@gleanerjm.com