Air Jamaica to introduce cost-cutting plan

Airline Industry Information, Jan 7, 2005

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Air Jamaica announced on Wednesday (5 January) that it will take a number of cost-cutting measures including reducing staff, cutting salaries of executives and discontinuing several routes.

The Jamaican government took control of the carrier two weeks ago. The new management said the airline was expected to post losses of USD90m for 2004 and needs great changes to keep operating.

The airline will lay off some of its 3,000 employees to reduce costs, although it was not disclosed how many. A report commissioned by the airline recommended a 15% staff reduction. In addition, the carrier's 50 senior managers have agreed to salary cuts of between 10% and 30%, which is expected to save the airline USD1m annually, said an Air Jamaica spokesperson. The airline also plans to discontinue certain routes and reduce the number of flights it operates to North America, Europe and the Caribbean.

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