Ceilidh, you are very correct about JM. When Butch took over JM back in 1995 he attempted to bring some new life into the carrier. At that time JM had a bad reputation for ferrying ganja from Jamaica to the USA and its planes were forever being impounded in MIA. Butch did try to revitalize JM by giving it a new image, new planes and paint scheme and projecting it as THE airline to the Caribbean.
Where he went wrong, though, was in his route selection and operations. Jamaica has a very large home market for air services, mostly based in Kingston (KIN) along with an enormous tourist market at Montego Bay (MBJ). JM's flights have thus traditionally flown from KIN to MBJ and then elsewhere. However, there is only so much capacity that Jamaica could realistically fill and there are lots of competing carriers into the island, especially at MBJ.
So Butch, who runs the Sandals and Beaches chains, chose to co-market the two products (airline and hotels) and geared JM's operations towards serving his hotels. Specifically, the airline began flights to Nassau (NAS), Grand Turk, St. Lucia (UVF) and Antigua (ANU), where he has hotel properties, as well as to Barbados (BGI) where he had intended to open a property. That Caribbean expansion in 1996 faced obvious drawbacks, though - Jamaica is in the western Caribbean while most of those other destinations are in the East. As such he chose to develop MBJ as a hub from which those cities would be served and connecting flights would continue to the US. Alas, those islands are all served by AA and, in the cases of UVF, ANU and BGI, BWIA directly to the US. Additionally, the local market for regional flights is located in KIN, not the tourist-centred MBJ, so JM literally left BW unchallenged in that regard. The result is that the expansion flights fared poorly from their 1996 introduction and within the same year ANU and Grand Turk were dropped. JM did start direct flights from JFK to UVF and BGI but they too suffered and were halved in frequency in late 1996.
JM, now trying desperately to fill the massively increased fleet they had obtained by then, upped gears another notch and promoted themselves even more actively as the airline to the Caribbean. Hence, their massive promotional campaign, "Red Carpet Service", free champagne and so on. They also took to sponsoring many regional events and to expanding their regional services where gaps were left by others. As a result, when AA left UVF (the Eagle still serves SLU) and GND (Grenada) JM filled the gaps with new direct services from JFK to those islands. BGI also proved to be quite a strong destination for JM despite the absence of a Sandals rseort so the services continued there and were increased.
Further to their Caribbean reach, JM has expanded to Bonaire (BON) and Panama City while starting service with a regional carrier, EC Xpress, from BGI to the nearby Windward Islands. The EC Xpress flights connect with the JFK services. Yet that does not seem logical, as both KIN and MBJ have been served by Copa from Panama for many years and, in like fashion, ALM has served KIN from Curacao, Netherlands Antilles. The ultimate was the now ill-fated thrust into Port of Spain (POS), where it was coming head-to-head with BWIA in its strongest route. The capacity to fill up 2 competing flights daily on the route was not forthcoming, hence JM's imminent withdrawal. Of course, BWIA competed vigorously too and that undermined JM severely.
So if BWIA has problems, Air Jamaica has them manyfold. And who has paid for all of this? The Jamaican taxpayers, who are being asked to shell out ever more money to sustain the airline. It is sad to see JM leave POS after 3 months; with better organization it may have worked for them. Above all, JM needs to decide what niche it really intends to serve. A year-round scheduled carrier cannot base its entire survival on the seasonal and fickle tourist market, far less to serve only one chain of hotels.
Hop to it, fly for life!