KINGSTON, Jamaica -(JIS)- Prime Minister, Bruce Golding, has said that the Government is seeking to divest the national carrier, Air Jamaica, by the end of the 2008/09 fiscal year.
Making his presentation in the 2008/09 Budget Debate in the House of Representatives on Tuesday (April 22), Mr. Golding said the services of IFC, the private sector arm of the World Bank, have been engaged as consultants/advisors in the divestment process, pointing out that a bidding system will be utilized to identify suitably qualified investors.
“An international competitive bidding process will be used to identify prospective investors, who have the technical and financial strengths,” the Prime Minister told the House, adding that the final shape of the divestment arrangement will be determined after consideration of bids submitted.
He said the overall objectives of the divestment exercise were: the transfer of complete or substantial majority ownership and full management control of the airline to the private sector; the recapitalization of the airline; retention and long-term sustainability of Air Jamaica as the national carrier; and structural or contractual linkage to a major global carrier.
Mr. Golding noted that Air Jamaica has accumulated losses in excess of US$1 billion, pointing out that in 2007, the airline lost some US$170 million. This, he added, was exacerbated by rising fuel costs. Despite this, however, he said the Government was mindful of the airline’s importance to Jamaica, and had no intention of “giving it away”.
The Prime Minister said the airline, which carried some 1.7 million passengers in 2007, and commanded 44 per cent of the Jamaican aviation market, “has a strong and loyal customer base.and Jamaican brand appeal.”
“It is a key airlift provider for the tourist industry. It is our flag carrier and Jamaicans, especially those in the Diaspora, are emotionally attached to it. However, we cannot continue to pile up these losses on the backs of the Jamaican taxpayer with no end in sight. If we are able to relieve the taxpayers of the annual losses incurred by Air Jamaica, it will save the taxpayers more than $10 billion per year,” Mr. Golding informed.
