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Air Jamaica Could Be Sold To Staff
Jan 29, 2010
By Darren Shannon
Jamaica’s Prime Minister Bruce Golding in an address to the nation said the Government would consider a buy-out proposal from Air Jamaica’s pilots should merger negotiations with Caribbean Airlines fail.
The comments come as the country nears deadlines associated with a $1.25 billion loan from the International Monetary Fund, including a condition that the country end its exposure to Air Jamaica’s losses.
“If the negotiations with Caribbean Airlines do not lead to an agreement, we would be in a position to look at the business plan that has been submitted by the Jamaica Airline Pilots Association,” said Golding in his monthly radio address late Jan. 27.
“We have gathered enough experience in this divestment exercise that has been going on for over a year, looking at all the due diligence that has been done, the analysis of the financial evaluation and so on. We know what to look for to ensure that it is a proposal that can be sustained,” he added.
Notably, Golding also noted that, “Once we dispose of Air Jamaica, there is no possibility to come back to the government. The budget cannot take it.”
Air Jamaica’s losses have weighed heavily on the Jamaican government’s finances, which have been “hit hard by the global financial crisis [and] from years of subpar growth,” according to the IMF, and have been highlighted as a major hurdle to Jamaica’s loan. Under the IMF’s conditions, these losses cannot be sustained and the government must sell or close the carrier.
The government has already seen one attempt to sell Air Jamaica falter, when talks with U.S. investor Indigo collapsed (DAILY, Dec. 22, 2009). After that failure, a separate bid by Trinidad & Tobago’s Caribbean Airlines was considered and a letter of intent was drafted.
However, local reports suggest this deal too has reached an impasse, and has forced the IMF to set a deadline for a decision to be made on Air Jamaica’s future. According to these reports, that deadline is today.
Neither the Jamaican government nor the IMF was available for comment on these reports.
It is also unclear what JALPA is proposing, and an open letter to the prime minister dated Jan. 26 only noted that the plan would keep “not let it [the airline] go from Jamaican ownership.”
Jan 29, 2010
By Darren Shannon
Jamaica’s Prime Minister Bruce Golding in an address to the nation said the Government would consider a buy-out proposal from Air Jamaica’s pilots should merger negotiations with Caribbean Airlines fail.
The comments come as the country nears deadlines associated with a $1.25 billion loan from the International Monetary Fund, including a condition that the country end its exposure to Air Jamaica’s losses.
“If the negotiations with Caribbean Airlines do not lead to an agreement, we would be in a position to look at the business plan that has been submitted by the Jamaica Airline Pilots Association,” said Golding in his monthly radio address late Jan. 27.
“We have gathered enough experience in this divestment exercise that has been going on for over a year, looking at all the due diligence that has been done, the analysis of the financial evaluation and so on. We know what to look for to ensure that it is a proposal that can be sustained,” he added.
Notably, Golding also noted that, “Once we dispose of Air Jamaica, there is no possibility to come back to the government. The budget cannot take it.”
Air Jamaica’s losses have weighed heavily on the Jamaican government’s finances, which have been “hit hard by the global financial crisis [and] from years of subpar growth,” according to the IMF, and have been highlighted as a major hurdle to Jamaica’s loan. Under the IMF’s conditions, these losses cannot be sustained and the government must sell or close the carrier.
The government has already seen one attempt to sell Air Jamaica falter, when talks with U.S. investor Indigo collapsed (DAILY, Dec. 22, 2009). After that failure, a separate bid by Trinidad & Tobago’s Caribbean Airlines was considered and a letter of intent was drafted.
However, local reports suggest this deal too has reached an impasse, and has forced the IMF to set a deadline for a decision to be made on Air Jamaica’s future. According to these reports, that deadline is today.
Neither the Jamaican government nor the IMF was available for comment on these reports.
It is also unclear what JALPA is proposing, and an open letter to the prime minister dated Jan. 26 only noted that the plan would keep “not let it [the airline] go from Jamaican ownership.”
