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Spirit Airlines to buy Air Jamaica

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  • Spirit Airlines to buy Air Jamaica

    Certainly didn't see this coming...so long to the Love Bird.

    Spirit Airlines to buy Air Jamaica: report
    NEW YORK (MarketWatch) -- The owners of discount-carrier Spirit Airlines will purchase Air Jamaica, renaming the money-losing government-owned carrier Spirit of Jamaica, according to the Jamaica Gleaner. Indigo Partners and Oaktree Capital have reportedly bought the airline for an undisclosed sum, according to unnamed sources, the newspaper said. Sources close to the negotiations would only confirm that Trinidadian-owned Caribbean Airlines did not win the bid for Air Jamaica. The Jamaican government wants to privatize the airline.

  • #2
    So "Spirit of Jamaica" is the name of the new purchased airline?

    I assume based on reading this, that this will be a stand alone carrier as F9/RW and RW/YX too and not merged like DL/NW?

    What is Jamaica's rules about foreign ownership? I assume it is less strict compared to the US's?

    Alex
    Stop Searching. Start Traveling. southwest.com

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    • #3
      Originally posted by ATrude777 View Post
      What is Jamaica's rules about foreign ownership? I assume it is less strict compared to the US's?

      Alex
      Rules are...."you got the cash, its your's." LOL

      Comment


      • #4
        Originally posted by ATrude777 View Post
        I assume based on reading this, that this will be a stand alone carrier as F9/RW and RW/YX too and not merged like DL/NW?
        RW and YX will be merged.
        Anybody can fly a round airplane....

        Comment


        • #5
          I kind of forgot Air Jamaica, oh sorry... Spirit of Jamaica, was still around, but kind an odd move I see, oh well.



          Air Jamaica May Become Spirit Of Jamaica


          Jul 6, 2009


          According to published reports in the Jamaica Gleaner newspaper, the owners of Spirit Airlines have bought the national carrier, Air Jamaica.

          It was further reported that Air Jamaica’s name might be changed to Spirit of Jamaica. The comment from Spirit this morning is, “We do not comment on market rumors.”

          Spirit recently announced completion of a strategic investment, led by Indigo Partners LLC with funds managed by Oaktree Capital Management LLC. The investment reportedly will provide significant resources for the company to consolidate its position as the leading low-cost carrier to the Caribbean.

          Year to date, Air Jamaica reported an operating loss of $63.51 million on revenues of $293.27 million, considerably better than last year’s performance that saw the airline reporting an operating loss of $162.43 million on revenues of $350.98 million.

          Indigo Partners LLC, with offices in Phoenix and Singapore, is a private-equity fund focused primarily on investing in the transportation, airline and airline-related sectors globally. Oaktree Capital Management LLC is a Los Angeles-based private investment firm that manages in excess of $30 billion in select niche investment markets for institutions and wealthy individuals.

          Miramar, Fla.-based Spirit flies to 36 cities in the U.S., Latin America and the Caribbean. Both Spirit and Air Jamaica have all-Airbus fleets.

          Just last week, reports from Jamaica were that tour operator Thomas Cook and Caribbean Airlines were the only bidders for the airline. See a related blog post at www.aviationweek.com/wings.

          Photo: Airbus
          what ever happens......happens

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          • #6
            Originally posted by N9103M View Post
            RW and YX will be merged.
            I understood the SOC becomes one, but they remain separate as two separate airlines, meaning planes continue to operate under Midwest colors, like F9 will operate under F9 colors?

            Alex
            Stop Searching. Start Traveling. southwest.com

            Comment


            • #7
              Originally posted by tommyalf View Post
              Rules are...."you got the cash, its your's." LOL
              Sadly, very very true. The airline has been hemmoraging money for decades now, and within the past few years, a few ideas have surfaced about the airline:

              1). Have the Jamaican Gov't yet again infuse the airline with more capital, allowing a fleet revamp and perhaps new routes.

              2). Allow the airline to be sold to another (prior to Spirit, Caribbean Airlines was considered the front runner, followed closely by Jamaican efforts to court a British carrier to buy/employ AirJamaica as feeder service for their Caribbean operations).

              3). Fully privitize her.

              Sadly, the sale of the airline to Caribbean Airlines was opposed due to cultural biases (not wanting a Jamaican airlines to fall into the Trinidadian hands) and also due to competition problems (as Caribbean Airlines would now dominate the Caribbean save for a sliver of compeition from LIAT). So, all in all, the move was not unexpected. The timing is a bit surprising, but then again, I wish them the best. Simply put - I am surprised that Spirit had the capital for such a venture seeing that they too are staving off bankruptcy on thier own footing. Anyway, best of luck to them...
              Whatever is necessary, is never unwise.

              Comment


              • #8
                Originally posted by AA 1818 View Post
                Sadly, very very true. The airline has been hemmoraging money for decades now, and within the past few years, a few ideas have surfaced about the airline:

                1). Have the Jamaican Gov't yet again infuse the airline with more capital, allowing a fleet revamp and perhaps new routes.

                2). Allow the airline to be sold to another (prior to Spirit, Caribbean Airlines was considered the front runner, followed closely by Jamaican efforts to court a British carrier to buy/employ AirJamaica as feeder service for their Caribbean operations).

                3). Fully privitize her.

                Sadly, the sale of the airline to Caribbean Airlines was opposed due to cultural biases (not wanting a Jamaican airlines to fall into the Trinidadian hands) and also due to competition problems (as Caribbean Airlines would now dominate the Caribbean save for a sliver of compeition from LIAT). So, all in all, the move was not unexpected. The timing is a bit surprising, but then again, I wish them the best. Simply put - I am surprised that Spirit had the capital for such a venture seeing that they too are staving off bankruptcy on thier own footing. Anyway, best of luck to them...

                Spirit is allot better shape then most people think, being private they don't have to follow all the same costly GAAP rules that a public company has to follow. Their backers are also soaked in cash.

                However after looking at Jamaica's route network I'm confused as to what NK is gaining. Jamaica's route network is mainly O and D routes from U.S cities where they are relying mostly on tourist revenue to fill their piggy bank. They have almost no interisland routes to feed their system. However NK does have a huge Caribbean network already so they may ever well be able to leverage that to their advantage. Who would have ever imagined that NK would be the dominant Caribbean airline???

                Comment


                • #9
                  Originally posted by tommyalf View Post
                  Who would have ever imagined that NK would be the dominant Caribbean airline???
                  Even with all their massive cutbacks, I'd think AA still has something to say about being the dominant Caribbean airline .

                  Comment


                  • #10
                    Originally posted by ATrude777 View Post
                    I understood the SOC becomes one, but they remain separate as two separate airlines, meaning planes continue to operate under Midwest colors, like F9 will operate under F9 colors?

                    Alex
                    As a brand, it will remain independant. But the employee groups, flying, etc. will be integrated with Republic. Just a d/b/a Midwest.
                    Anybody can fly a round airplane....

                    Comment

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