Business Lounge
The Air Jamaica Reality Foregoing the extra mile by Andre Burnett
J
amaicans love the “Lovebird”, either that or we hate the idea of anybody else having it, especially Trinidadians. The public outcry over the proposed takeover or purchase of national carrier, Air Jamaica, by the Trinidad based Caribbean Airlines (CAL) has been caused the government a few popularity points here and there. Added to this scenario is the heart-tugging attempt by the Jamaica Airline Pilots Association (JALPA) to keep the airline at home by submitting a desperate last minute bid. A Sunday Matinee retelling of this story would show the jubilant pilots celebrating their success while a grateful nation celebrates as the credits roll. But what happens when the screen eventually fades to black?
chirps and b e e p s yet a nationalistic pride usually most obvious in Jamaicans not residing at home, has clouded our perceptions. The pilots’ determination is to be admired and if their plan is feasible they should be given a chance, but is this a risk really worth taking?
While we all feel a particular patriotic pride towards our national carrier, is this feeling clouding the judgement of many Jamaicans who feel compelled to support the pilots’ bid to take over the operations of Air Jamaica? Dr. Ronald Robinson, the Minister of State for Foreign Affairs and Foreign Trade made the point during a recent presentation that countries much better off than Jamaica were finding it hard to cope with the stresses of a national carrier. Forget show business, there’s no business like the airline business. The airline industry is one where the term “manageable losses” is welcome news. Last year, four out of the largest nine US airlines made profits while the other airlines managed to drag the bottom line into the red, reporting a combined loss of US $3.4 billion. What’s the good news here? Well, losses in 2008 were US$19.5 billion so break out the champagne. The cost of operating an airline has almost doubled in the past decade and the recent recession, which many of us are still feeling the effects of, has changed the face of air travel dramatically. Less disposable income means more people stay at home or prepare for a long road trip. This has seen the explosion of cheap travel with airlines battling tooth and nail to offer their customers the cheapest ride around. Some money is better than no money after all. This doesn’t sound like the kind of situation that a struggling economy needs to wallow in any further. Air Jamaica has not posted a profit way before connecting to the internet involved yourmoney ezine
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Bait and Switch:
The Psychology of Ponzi Schemes
by Andre Burnett
C
lear as crystal, hindsight is. Also utterly useless at the point at which one realizes that he has been had, taken for a ride, bamboozled or any other idiom that fits the bill. The painful stories and anguished faces of swindled investors who have had the misfortune of being a part of a pyramid or Ponzi scheme normally draw little sympathy from the judgemental public who snootily proclaim that they should have known better.
fect by Carlos Hill of Cash Plus Ltd. who was adamant that the institution was for the poor even though most of the first investors were all wealthy individuals who were in the know. Curious and curioser?
In Jamaica, a story about money lost in the Cash Plus or Olint schemes to a random stranger will more than likely invoke a similar story about money lost by that individual or somebody that they know. Thus, if everyone knows that “too good to be true” means just that, then why have Carlos Hill, David Smith, Bernie Madoff and Allan Stanford all managed to convince hard working citizens of the opposite?
Insights will conclude its look on the intricacies of scam psychology in the follow up to this article next week
Almost everyone knows the concept of a Ponzi scheme as a fraudulent investment operation which pays returns to investors out of their own money or out of subsequent investments rather than profit. Regarding investors as greedy individuals, who were simply out to get rich quickly might be a harsh view to hold. Yes, greed is a major factor but many people who invested in these schemes were people who worked hard to get the money invested and only wanted more than what they were getting. Oh, that’s greed? Well... what is the psychology behind a pyramid scheme that makes this form of operation so alluring? The facets of a Ponzi scheme that makes it do that thing it does can be outlined in five tactics that are all based in psychologist Dr. Robert Cialdini’s 6 principles of persuasion. Phantom riches, source credibility, social consensus, reciprocity and scarcity are the five scam tactics that normally come into play as a Ponzi scheme becomes more complex over time. Cialdini’s 6th principle is the one that is most interesting and involves “liking”. People who become enamoured by the concept of a scheme is normally of the impression that the leaders of such schemes care more about them that the big, bad profiteering banks do. This was used to great efyourmoney ezine
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New look YEA executive Leads the charge for the new year
T
he Young Entrepreneurs Association (YEA) had their Annual General Meeting on Thursday January 21, 2010 at the office of the Jamaica Employers’ Federation, 2A Ruthven Road.
Stephen Spence, the chief executive of technology company SMS communications Limited, retained his office as president of the Young Entrepreneurs’ Association (YEA) and Spence’s new YEA executive includes: Mrs. Patrice McHugh (Bars-To-Go Group), First Vice-President; Mr. Tyrone Wilson(eZines Limited), Second Vice President; Miss Kimala Bennett (The Production Lab), Secretary; and Mr. Ronald Stephenson (IGD Jamaica), Treasurer.
Stephen Spence President
2009 Achievements: * YEA President Roundtable – Guest Speakers – Hon. R. Danny Williams & Christopher Williams * Successful staging of the first ever Entrepreneur Expo in the Caribbean * 450% increase in membership * Education Seminars highlighting areas of importance for entrepreneurs The Young Entrepreneurs Association was launched under the auspices of the Jamaica Employers’ Federation in 2006 and is a volunteer-driven organisation whose mandate is to support young people in business. YEA members represent the best in Jamaican businesses and the organisation provides the opportunity to connect with persons who appreciate the special challenges and rewards of Entrepreneurship.
“2010 will see the YEA forging forward, building on the good work of last year by commencing a vigorous campaign to increase membership, making sure our new flagship Event, our Expo, is larger and has more impact, launching our Mentorship Programme; educating our members in addition to other various meaningful endeavours,” said Stephen Spence, President of the organization.
Patrice McHugh First Vice-President
Tyrone Wilson Second Vice-President yourmoney ezine