Air Jamaica to be divested by end of fiscal year
KINGSTON, Jamaica, April 24, 2008 – The Jamaica government has announced plans to divest the national carrier, Air Jamaica by the end of this financial year, but assured that it has no intention of giving the airline away.
Prime Minister Bruce Golding said the government has "engaged the services of the IFC, the private sector arm of the World Bank, as consultants/advisors on the process of divesting" the carrier.
"An international competitive bidding process will be used to identify prospective investors who have the requisite technical and financial strengths," he said during his presentation in the 2008/2009 budget debate.
He made it clear that despite Air Jamaica accumulating losses of over US$1 billion, the government remained mindful of the carrier's importance to the country.
"Air Jamaica has value. We have no intention of giving it away. In spite of its difficulties, it carried 1.7 million passengers last year and commands 44 per cent of the Jamaican aviation market. It has a strong and loyal customer base and it has the Jamaica brand appeal," Mr Golding said.
"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."
He however pointed out that the decision to divest Air Jamaica was taken because government could no longer pile the losses of the airline on the backs of taxpayers "with no end in sight".
The prime minister explained that the final shape of the divestment arrangement would be determined after consideration of all the bids submitted.
He said the government's broad objectives are the transfer of complete or substantial majority ownership and full management control to the private sector; the recapitalization of the airline; the retention and long-term sustainability of Air Jamaica as the national carrier; and the structural or contractual linkage to a major global carrier.