NADALEEN SINGH

On De­cem­ber 16, Ja­maica Prime Min­is­ter Bruce Gold­ing and his del­e­ga­tion vis­it­ed T&T to meet with act­ing Prime Min­is­ter, Lenny Saith and his del­e­ga­tion com­pris­ing For­eign Af­fairs Min­is­ter Paula Gopee-Scoon and Min­is­ter in the Min­istry of Fi­nance Mar­i­ano Browne. A state­ment from the Of­fice of the Prime Min­is­ter said the two par­ties met to talk about Air Ja­maica and Caribbean Air­lines (CAL). On De­cem­ber 17, Gold­ing told his par­lia­men­tary col­leagues the pro­pos­al in­volved one Caribbean car­ri­er. "Caribbean Air­lines has a vi­sion of one Caribbean and one air­line serv­ing the en­tire Caribbean. We in­di­cat­ed that one Caribbean is won­der­ful, but we are a tourist des­ti­na­tion; tourism is a part of our lifeblood.

"While we sup­port the con­cept of a re­gion­al car­ri­er, we have par­tic­u­lar in­ter­ests that have to be sat­is­fied, and I am hop­ing that we will be able to ar­rive at an agree­ment in short or­der that will pre­serve and pro­tect Air Ja­maica's routes that are vi­tal to us and those routes that are es­sen­tial to Ja­maicans. I am sat­is­fied, based on dis­cus­sion yes­ter­day, that is pos­si­ble." In an in­ter­view with the Guardian on De­cem­ber 17, Arthur Lok, chair­man, CAL, said the pro­pos­al in­clud­ed one air­line for the Caribbean. "We, CAL, took an in­depth look in­to it and found that it of­fered an op­por­tu­ni­ty for the vi­sion of a one Caribbean air­line to serve the Caribbean. It was an elu­sive dream in the past. "We had sub­mit­ted a pro­pos­al to the In­ter­na­tion­al Fi­nan­cial Cor­po­ra­tion (IFC) and the in­vest­ment team," Lok Jack said.

The Ja­maica gov­ern­ment had ap­point­ed the IFC–the pri­vate sec­tor arm of the World Bank Group–as lead ad­vis­ers on the di­vest­ment project. Air Ja­maica's debts are high. Ac­cord­ing to a De­cem­ber 18, 2009, Ja­maica Ob­serv­er ar­ti­cle, Air Ja­maica cur­rent­ly has US$1.2 bil­lion in ac­cu­mu­lat­ed loss­es. "In Ju­ly of this year, Air Ja­maica re­port­ed an op­er­at­ing loss of US$63.51 mil­lion on rev­enues of US$293.27 mil­lion, con­sid­er­ably bet­ter than the pre­vi­ous year's per­for­mance, which saw the air­line re­port­ing an op­er­at­ing loss of US$162.43 mil­lion on rev­enues of US$350.98 mil­lion," the ar­ti­cle stat­ed. Gold­ing has said the air­line, now ful­ly owned by the Ja­maican gov­ern­ment af­ter it ac­quired those shares held by Gor­don "Butch" Stew­art's Air Ja­maica Ac­qui­si­tion Group in De­cem­ber 2004, has nev­er been prof­itable.

An Au­gust 12, 2009, ar­ti­cle pub­lished in the Ja­maica Glean­er, stat­ed: "Air Ja­maica, which has two gov­ern­ment-backed bonds on the mar­ket–a US$200 mil­lion is­sue due in 2015 and a US$125 mil­lion is­sue due in 2027–re­lies on state sup­port and is seen as vul­ner­a­ble to Ja­maica's debt resched­ul­ing plans." In an Au­gust 26 ar­ti­cle, the Ja­maica Glean­er quot­ed Gold­ing as say­ing it will cost the Ja­maica gov­ern­ment close to US$200 mil­lion to di­vest Air Ja­maica. "Part of our con­cern is the cost of pri­vati­sa­tion. There's a cost to not pri­vatis­ing and that cost is nev­er re­al­ly known be­cause you don't know what the loss­es are go­ing to be and how many times they're (Air Ja­maica) go­ing to come back to you for ad­di­tion­al funds," Gold­ing said, at a Glean­er Ed­i­tors' Fo­rum in Au­gust 2009.

Gold­ing al­so said the di­vest­ment process would in­volve re­dun­dan­cy pay­ments amount­ing to US$30 mil­lion, as well as out­stand­ing bills owed by the air­line. "The ques­tion is whether that can be ac­com­mo­dat­ed with­in the kind of fis­cal re­al­i­ties of this fis­cal year. There are some ex­pen­sive leas­es that it would be im­pos­si­ble to pass on as part of the trans­ac­tion, which would have to be ter­mi­nat­ed and, there­fore, what­ev­er are the penal­ties that we would pay, would have to be as­sumed."

Air Ja­maica's woes:

A state­ment on Air Ja­maica Web site, dat­ed Jan­u­ary 27, 2009, said a busi­ness plan was de­signed to en­able the air­line to cope with the glob­al eco­nom­ic down­turn. "The goal of the 2009 busi­ness plan is to elim­i­nate cash loss­es by:

�2 ex­it­ing loss-mak­ing mar­kets and re­vis­ing sched­ules in oth­ers

�2 im­prov­ing air­craft util­i­sa­tion by more than 25 per cent

�2 ex­e­cut­ing an ef­fi­cien­cy plan tha will im­prove pro­duc­tiv­i­ty and bring Air Ja­maica's unit costs in line with in­ter­na­tion­al norms." Bruce No­bles, Air Ja­maica's pres­i­dent and chief ex­ec­u­tive of­fi­cer, in the same state­ment, had said 2009 would be a tough year.

No­bles, who was pres­i­dent and chief op­er­a­tional of­fi­cer of Air Ja­maica from May 2002 to June 2003, was "Even tougher times may be ahead, but I be­lieve that we have the en­er­gy and imag­i­na­tion re­quired to be­come the kind of air­line that will have a fu­ture for many years to come," No­bles said in Jan­u­ary 2009. Re­gard­ing pri­vati­sa­tion, the state­ment said the gov­ern­ment of Ja­maica was in the process of pri­vatis­ing the air­line to meet a March 2009 dead­line, and a sub-com­mit­tee com­pris­ing of the board of di­rec­tors is en­gaged in talks with po­ten­tial in­vestors.

2007: IMF on Air Ja­maica

In Feb­ru­ary 2007, the In­ter­na­tion­al Mon­e­tary Fund (IMF) ad­vised the Ja­maica gov­ern­ment to shut down or sell off the car­ri­er, so the an­nu­al US$30 mil­lion sub­sidy the air­line was re­ceiv­ing could be stopped.