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Wednesday, December 05, 2007
The government has set a 16-month timetable to restructure and divest ailing national carrier, Air Jamaica, with the finance ministry expecting to rid itself of the financial burden by the latest March 2009.
"The level of Government's support necessary to keep the airline in operation is unsustainable," according to Senator Don Wehby, who made the announcement at a seminar hosted by Jamaica Money Market Brokers last Tuesday at the Terra Nova Hotel in Kingston.
"It must be recognised that continuation of this level of support to the airline is at the expense of the country's social services."
The airline has been haemmoraghing for years, racking up losses of close to US$1.1 billion ($79.2 billion) over the years. Estimates place the expected loss of the carrier at US$64 million ($4.6 billion) in 2007 alone.
According to the minister without portfolio in the finance ministry, the government is in the process of recruiting an investment banker to lead the divestment process and to ensure that the advantages are maximized.
"We hope to have restructured and divested Air Jamaica, such that it is no longer a strain on the budget by the latest March 2009," Minister Wehby said, adding that, "these decisions, though difficult politically, are in keeping with the Government's commitment to sustainable macro-economic stability."
He noted that while operating inefficiencies are to a large extent controllable and can over time be remedied, it is also recognised that factors in the global environment, particularly rising oil prices, are outside the control of the airline and unfavourable to its future viability.
The government has set a 16-month timetable to restructure and divest ailing national carrier, Air Jamaica, with the finance ministry expecting to rid itself of the financial burden by the latest March 2009.
"The level of Government's support necessary to keep the airline in operation is unsustainable," according to Senator Don Wehby, who made the announcement at a seminar hosted by Jamaica Money Market Brokers last Tuesday at the Terra Nova Hotel in Kingston.
"It must be recognised that continuation of this level of support to the airline is at the expense of the country's social services."
The airline has been haemmoraghing for years, racking up losses of close to US$1.1 billion ($79.2 billion) over the years. Estimates place the expected loss of the carrier at US$64 million ($4.6 billion) in 2007 alone.
According to the minister without portfolio in the finance ministry, the government is in the process of recruiting an investment banker to lead the divestment process and to ensure that the advantages are maximized.
"We hope to have restructured and divested Air Jamaica, such that it is no longer a strain on the budget by the latest March 2009," Minister Wehby said, adding that, "these decisions, though difficult politically, are in keeping with the Government's commitment to sustainable macro-economic stability."
He noted that while operating inefficiencies are to a large extent controllable and can over time be remedied, it is also recognised that factors in the global environment, particularly rising oil prices, are outside the control of the airline and unfavourable to its future viability.
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