The Jamaican government will soon announce details surrounding the sale of its ailing national carrier, which needs a multi-million dollar bailout in order to secure the country's tourism industry. The Jamaican government appears to view Caribbean Airlines as its lifeline and is targeting it as it most likely candidate for investment.
Against this backdrop, Air Jamaica's network is struggling as it strips down its network of Caribbean routes in response to increased competition and weakened demand.
And, off the back of Air Jamaica's latest announcement that it will shelve its Montego Bay to Orlando service, budget carriers JetBlue and AirTran have been quick to pounce, and will launch the same service on 8th and 11th February respectively. As a result, for the January period, bookings for travel on Air Jamaica are said to be down 50% year-on-year, as travellers appear to be waiting for a drop in fares that the budget carriers will provide.
In the meantime, Air Jamaica's route losses continue to mount up.
Air Jamaica is also cancelling from the 9th March New York JFK to Grenada and the carrier will no longer operate services from Jamaica to Orlando.
And on 12th April, it will drop services from Montego Bay to Chicago, Curacao and Havana, as well as flights from Kingston to Havana and Nassau - a blow to the Cuban market. It is interesting that the reductions are not only from its base at Montego Bay, but also from its main base at Kingston.
Fleet Strategy: Capacity Challenges
Air Jamaica has, over a long period, pared back its fleet and from April, will operate to five destinations (with 161 weekly flights) using just six aircraft: one A319, one A321 and four A320s.
The airline's CEO, Nobles said in a statement: "This fleet reduction has become necessary as we seek to meet our financial obligations, however Air Jamaica continues to be the best choice for convenient schedules and excellent service and we have ensured that adequate capacity is provided on our core routes."
In the past, Air Jamaica has struggled operating a wide-body fleet, the carrier operated an A340 on the London and New York routes. The carrier was not able to fill capacity at the right fare to be able to make the high seat costs of the A340 work, particularly in a market dominated by VFR traffic and intense competition ( from BA and Virgin Atlantic on the London route). The A340 was discontinued from the JM fleet and London cancelled.
More recently, Air Jamaica has focused on becoming a more robust carrier - opting for an exclusive narrow-body fleet of A320s and has reduced capacity from the Caribbean, particularly in Kingston.
Kingston Today: More Carriers & Destinations; Less Capacity
In light of Air Jamaica's loose grip on the market, Kingston will undoubtedly be looking to backfill capacity, using inbound carriers that can provide airlift for the tourism industry.
Routes News has compared Kingston airport's market position in 2005 with its schedule this year - in terms of weekly frequency offered by carrier and destination.
Weekly Frequency from KIN in 2005 and 2010 by Airline:
| Carriers | 2005 | 2010 |
| Weekly Frequency | Weekly Frequency | |
| Air Jamaica (JM) | 102 | 64 |
| Delta (DL) | - | 6 |
| British Airways (BA) | 4 | 3 |
| American Airlines (AA) | 16 | 24 |
| Air Canada (AC) | 2 | 2 |
| BWIA (BW) | 8 | 9 |
| Cayman Airways (KX) | 3 | 10 |
| Continental (CO) | 4 | 0 |
| Copa Airlines (CM) | 3 | 2 |
| Cubana (CU) | 1 | 2 |
| Air Turks & Caicos (JY) | 3 | |
| JetBlue (B6) | 8 | |
| Spirit (NK) | 4 | |
| Virgin Atlantic (VS) | 2 | |
| Total | 146 | 139 |
Destinations served from KIN in 2005 and 2010:
| Destinations | 2005 Weekly Frequency | 2010 Weekly Frequency |
| MIA | 29 | 24 |
| FLL | 23 | 26 |
| MBJ | 40 | 18 |
| YYZ | 12 | 8 |
| JFK | 8 | 25 |
| ANU | 6 | 0 |
| GCM | 11 | 8 |
| LHR | 4 | 0 |
| EWR | 4 | 0 |
| LGW | 4 | 5 |
| PTY | 3 | 2 |
| SXM | 2 | 3 |
| ANU | 0 | 5 |
| ATL | 0 | 5 |
| HAV | 0 | 4 |
| NAS | 0 | 2 |
| PLS | 0 | 3 |
| POS | 0 | 1 |
| Total destinations | 12 | 15 |
The tables highlight how competition out of Kingston has increased over the five years, helped by low-cost entrants into the market, including Spirit Airlines (in 2005) and more recently, JetBlue Airways (which is becoming an important player in the Caribbean).
And, while Kingston is served by more carriers today compared with 2005, it offers less weekly frequency, a reflection of the capacity reductions from Air Jamaica and to a lesser extent the other US network carriers.
With Air Jamaica's weak position the growth will come from the network carriers adding capacity, as Delta has recently done, adding back capacity (with three-times weekly flights from Atlanta), but will more likely come from the low cost carriers - particularly from JetBlue.
JetBlue celebrated its first non-stop service to Montego Bay, Jamaica from Orlando International Airport (MCO) on 8th February. JetBlue will use Embraer 190 aircraft with capacity for 100 passengers.
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