Caribbean Airlines and Air Jamaica announced the agreement representing the formal merger of the two carriers was signed on 26-May-2011 (nationnews.com/go-jamiaca.com, 26-May-2011). Under the agreement, the Jamaica government will own 16% of the Trinidad-based CAL while Port of Spain will spend an estimated USD49.2 million to facilitate expansion of CAL, which took over five of Air Jamaica’s routes in 2010. In Apr-2010, the Bruce Golding government assumed all financial liabilities up to the end of that month for Air Jamaica with CAL assuming the financial risk of continuing Air Jamaica’s activities from 01-May-2011.
CAL and JM sign formal merger
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LIAT’s woes reflect business conflicts, limited vision, in intra-regional Caribbean aviation
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During the past year some of the shareholder governments of the perpetually troubled airline have attempted to initiate tough love for LIAT, including threatening to withhold funds until LIAT can improve its service and operations. In some ways those threats are a double-edged sword – given the challenges of doing business in the region, a business environment largely driven by years of governments propping up state-owned airlines instead of allowing free market forces to take effect.
Although LIAT's shareholder governments would like to see more competition, the reality is that the aviation business in the Caribbean remains in a state of inertia, and all of LIAT's pledges for improvement will likely not materialise until a true mindset change sweeps over the region.
Southwest Airlines:domestic changes, continued international expansion, as overall 2017 growth slows
Southwest Airlines plans lower system capacity growth in 2017. The company joins other US airlines working feverishly to return to positive unit revenue as oil prices and labour costs are forecast to rise for most of the country’s airlines.
Even as Southwest’s capacity increases are projected to fall year-on-year in 2017 the airline is broadening its international reach with the debut of new flights from Fort Lauderdale, and is making moves in its domestic network.
This includes its decision to launch service from Cincinnati, a market that has attracted significant low cost service during the past two to three years as its hub status for Delta has diminished. Southwest’s service entry at Cincinnati comes at the cost of flights from Akron and Dayton, which is not surprising, given Cincinnati’s potential to garner higher revenue.
Although Southwest cited some positive trends at the end of 2016, it struck a cautious tone about the operating environment in the US, noting that while yields were improving, the revenue environment remains challenging. US airlines, including Southwest, are being closely watched after declaring they will return to positive unit revenue in 1H2017.