What do you Caribbean readers think about this proposal ?
Caribbean should look at Quantas - Air New Zealand alliance
''In the context of the current debate within the Caribbean over the future of the region’s three semi-privatised loss making airlines Air Jamaica, BWIA and LIAT and the two 100% government owned airlines, Bahamasair and Cayman Airways, the recently announced alliance between Quantas and Air New Zealand to create a strong Australasian regional airline group, may be of interest to your readers.
Under that proposed alliance both airlines would maintain their separate corporate and marketing identities with rationalised scheduling and planning in the initial stages followed by integration in other areas such as purchasing, aircraft, maintenance specialisation etc. to enhance efficiency and profitability with the option for complete integration left for later decision based on the success of the initial stages.
That two major international airlines in two mature economies see the need for such co-operation to remain competitive in today’s international aviation market should cause the airlines in the Caribbean to rethink their aversion to a similar solution.
Few disinterested observers now question the need for the airlines of the Caribbean to form a strong regional alliance with the network, size and scale to be profitable to end once and for all their common reliance on the region’s taxpayers for support.
One relatively modest practical step towards a regional airline solution for the Caribbean could be for the governments of Jamaica and Trinidad to transfer their airline shares (in Air Jamaica, Air Jamaica Express, BWIA and LIAT) to a jointly owned holding company ("Airlines of the Caribbean") to be established and owned by them with a specific mandate to work towards regional airline integration.
Other regional governments including those with a shareholding in LIAT could be invited to participate. The actual ownership percentage is probably not all that material in economic terms (although no doubt it will be politically) as all the airlines have a negative net worth. The Cayman Islands and the Bahamas which own their own loss making airlines could also be included within the proposed structure.
The "Airlines of the Caribbean" holding company would function as a private company working with the other shareholders of the airlines to achieve its objective.
The airlines involved would continue to operate as individual airlines with cost svaing integration in scheduling, planning, purchasing etc. developing through agreements fostered by the holding company backed by its shareholding powers.
An agreement between the shareholder governments that all future financial assistance for the airlines involved would be made through the holding company would give it significantly enhanced influence especially among the semi-privatised airlines who have come to rely on their government rather than their private sector shareholders for financial support when losses have been incurred.
I suggest this as a practical and painless initial step that the regional governments could make to underline their commitment to an integrated regional airline system which would give the proposed airline holding company considerable influence to move the airlines through agreement to greater integration and efficiency.
The integration of the three major semi-privatised airlines (Air Jamaica, BWIA and LIAT), either alone or with the addition of Cayman Airways and Bahamasair, has the potential to provide an integrated, efficient and profitable air transport system for intra and extra regional travel with the scale to compete effectively.
Competition intra regionally will continue to exist from the likes of Caribbean Star/CaribbeanSun and the newly independent AmericanEagle while extra regional competition will continue to be provided by the major US, Canadian and UK carriers.
Without some degree of integration the airlines of the Caribbean will continue to sustain losses that can only be covered by the taxpayers in a regime that if history tell us anything will involve a predictable cycle of increasing not diminishing losses.''
John P.T. Gilmore