May 31, 2008 — Gov. John deJongh Jr. announced Saturday the formation of a special committee to look into the potential impact of a planned reduction in airline service to the territory in fall 2008.
According to a statement issued by American Airlines this week, the airline plans to “restructure American and American Eagle operations at San Juan, Puerto Rico, beginning in September. This round of reductions will affect American and American Eagle flights originating from San Juan to the United States and various islands in the Caribbean.”
“Given the current issues affecting the airline industry, including the severe strain of rising fuel costs, we have a responsibility as a territory to get ahead of the issue and proactively address the potential impact to our economy this fall and beyond,” deJongh said at a Saturday meeting of the major stakeholders.
The airline also said Friday it would lay off approximately 400 employees at its San Juan, Puerto Rico hub. In addition, American Airlines will reduce its daily flights to Puerto Rico to 18 from 38, and American Eagle's schedule will go to 33 from 55. Specific flight schedules will be announced shortly.
“Skyrocketing fuel costs and a softening economy,” along with high operating costs associated with American Eagle’s older aircraft were cited by American Airlines as the primary reasons for the reduction of service.
Initially, the new committee will focus on opportunities for increased service from existing and new carriers, identifying emerging markets for tourism, continuing to create demand for the territory, and establishing joint initiatives with Puerto Rico and other regional destinations.
According to Richard Doumeng, chairman of the board of directors of the U.S. Virgin Islands Hotel and Tourism Association, “This moment in time and how we react to it is an extremely important one for the U.S.V.I. and the entire Caribbean. Our tourism-based economies are almost totally dependent on air arrivals to receive our overnight visitors. Fortunately, this is also a time of unprecedented cooperation and synergy between the public and private sectors in the U.S. Virgin Islands and the rest of the region.”
Richard “Pat” Henry, president of the St. Croix Hotel and Tourism Association, said he was shocked. “The news of the potential loss of flights into the territory by American Airlines is one of serious concern to us all.” He said with the present economic conditions within the United States, and the ever-increasing cost of conducting business, the cutbacks have potentially devastating effects to the entire Caribbean, its business sectors and residents. “The challenge is up to us to begin seeking and delving into new markets and means to service our needs,” Henry said.
DeJongh has called a news conference for 10 a.m. Monday at Government House on St. Thomas where he and Tourism Commissioner Beverly Nicholson-Doty will expand upon the committee’s plans to address this issue.
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