Interim Air Jamaica Management Working to Restore Stability

KINGSTON (JIS)-Two months after the Government reassumed control of the national airline the new interim management team is working assiduously to ensure that the fortunes of the carrier are turned around and returned to viability.

Executive Chairman of Air Jamaica, Dr. Vincent Lawrence made the disclosure at a press conference at the airline’s Harbour Street offices, where he outlined the company’s strategies to achieve this return to financial viability.
According to Dr. Lawrence, Air Jamaica was currently seeking to renegotiate repayment plans for loans and other debts and simultaneously secure funding to offset expenses.

“Based on our five-year business plan we have approached financial institutions to raise long-term financing of US$255 million. Some have indicated a willingness to enter into business with us and the Government is prepared to guarantee any reasonable loan agreements,” Dr. Lawrence informed.
In addition, the airline’s restructuring team is seeking the Government’s assistance to combat its spiralling debt burden.

“Government is considering converting US$398 million (J$24.7 billion) of debt that Air Jamaica owes to the state into equity. We have committed to honour our obligations of current monthly contributions to the National Housing Trust, the National Insurance Scheme and HEART Trust. We are also ensuring that we make all our other statutory payments on time and keeping them current, such as PAYE, etcetera. We are negotiating a payment schedule for the outstanding amounts that we have with the NHT, NIS and HEART,” explained Dr. Lawrence.

In 2004, Air Jamaica accumulated US$83 million in losses bringing the total accumulated deficit to US$847 million, and total liabilities to approximately US$890 million. Of this total, US$398 million is owed to Government, US$370 million to trade creditors and US$125 million are bank loans.

Dr. Lawrence and his management team was also in discussion with the Air Jamaica staff and their unions to negotiate salary cuts and other ways to streamline the airline while maintaining the reputation of being reliable, safe and on time.

“Our staffing requirements are under continued review and are not yet fully completed. To date, over 170 members of staff across the board have been made redundant. We are still projecting that the total staff reduction will be in the region of ten per cent, once the review and network adjustments are completed,” he stated.

In closing, the Executive Chairman reiterated his team’s commitment to changing the fortunes of the airline and stated that over the next few weeks, effort will be made to finalise employee and labour agreements, staff restructuring long-term financing, lease and fuel arrangements and improving the airline’s reliability and on-time performance.

Related Articles

Back to top button