To­day's Ed­i­to­r­i­al

The news that the Ja­maican Gov­ern­ment has deemed Caribbean Air­lines to be the pre­ferred bid­der for Air Ja­maica should re­ceive a cau­tious wel­come from those who have dreamed for decades about the es­tab­lish­ment of a sin­gle re­gion­al air car­ri­er. It is in­dica­tive of the im­por­tance of Air Ja­maica to our neigh­bour to the north that the coun­try's Prime Min­is­ter, Bruce Gold­ing, took the time to fly to Port-of-Spain on Wednes­day to hold talks with lo­cal of­fi­cials on the fu­ture of the two air­lines. Mr Gold­ing's unan­nounced vis­it took place on the eve of his pre­sen­ta­tion to Ja­maica's Par­lia­ment on the coun­try's US$1.3 bil­lion loan agree­ment with the In­ter­na­tion­al Mon­e­tary Fund, which had been in­sist­ing that the loss-gen­er­at­ing Ja­maican air car­ri­er be sold in or­der to ease the con­tin­u­ing bur­den of US dol­lar sub­si­dies on the coun­try's trea­sury.

It would ap­pear that some kind of com­mit­ment was pro­vid­ed by the folks in Port-of-Spain and that that com­mit­ment was enough for Prime Min­is­ter Gold­ing to take to the bank. While it is clear­ly in Ja­maica's im­me­di­ate na­tion­al in­ter­est that it rid it­self of the fi­nan­cial bur­den of con­tin­u­ing to op­er­ate the 100 per cent state-owned na­tion­al car­ri­er, the un­com­fort­able ques­tion that must be asked is whether it is in T&T's na­tion­al in­ter­est that 100 per cent state-owned Caribbean Air­lines Ltd (CAL) ac­quire Air Ja­maica. It mat­ters not how the an­swer is framed, turned or spun, it sim­ply would not be pru­dent for the Man­ning ad­min­is­tra­tion to take T&T's di­min­ish­ing store of for­eign sav­ings to pur­chase eq­ui­ty in an air­line that has wracked up loss­es in the hun­dreds of mil­lions and is bur­dened with con­sid­er­able debts. The Gov­ern­ment here should al­so be quite cau­tious on the is­sue of pro­vid­ing a guar­an­tee for new loans for Air Ja­maica and should com­plete­ly avoid any pro­pos­al that speaks to the is­sue of T&T tax­pay­ers as­sum­ing the Ja­maican car­ri­er's debt.

While T&T is in a far bet­ter fi­nan­cial shape than Ja­maica, it is no longer at the stage where it can af­ford to be prof­li­gate with tax­pay­ers' mon­ey. This sit­u­a­tion is com­pound­ed by the fact that Caribbean Air­lines con­tin­ues to re­ceive trans­fers from the Min­istry of Fi­nance amount­ing to $495,370,500 in the 2008 and 2009 fis­cal years. The fact is that for the re­la­tion­ship be­tween CAL and Air Ja­maica to work it must be very firm­ly root­ed in plans and pro­pos­als that make com­mer­cial sense for both air­lines. It may be that this would mean Caribbean Air­lines tak­ing over the man­age­ment of a new Air Ja­maica, one that has been freed of all of its lega­cy oblig­a­tions in­volv­ing high salaries, un­prof­itable routes and poor man­age­ment de­ci­sions. There must al­so be a very clear think­ing on the is­sue of whether a sin­gle re­gion­al air car­ri­er, giv­en the huge costs in­volved in the cre­ation of such an en­ter­prise, is ab­solute­ly nec­es­sary.

The on­ly way the re­la­tion­ship be­tween the two air­lines is go­ing to work is if those on both sides of the aisle are con­vinced that they ei­ther swim to­geth­er or they drown. On the is­sue of whether a sin­gle re­gion­al car­ri­er is a ne­ces­si­ty, it is in­struc­tive to note that the Gov­ern­ment of Bar­ba­dos has not had an eq­ui­ty stake in an in­ter­na­tion­al car­ri­er for years but this has not stopped it from de­vel­op­ing one of the most suc­cess­ful tourism economies in the re­gion. Fi­nal­ly, wher­ev­er the flight be­tween CAL and Air Ja­maica takes us, it is vi­tal­ly im­por­tant that there be trans­paren­cy and ac­count­abil­i­ty right through­out the jour­ney. This is vi­tal giv­en the lin­ger­ing con­cerns among in­ter­est­ed par­ties of both air­lines about the sale of land­ing slots at Heathrow to British Air­ways and Vir­gin Air.