By LUCIUS C. WHITE
The government seems committed to giving away Air Jamaica to foreigners. Bad as that may be, we are entitled to know how much it has cost Jamaica for them to carry out that process.
The records show that the Government of Jamaica in 2008 borrowed an amount of US$22 million for the purpose of “acquiring expert advice on the divestment of Air Jamaica.” Since that time, the public was informed that the Hon. Dennis Lalor was appointed chairman of the Air Jamaica Divestment Committee.
The Jamaica Airline Pilots’ Association has made an offer in response to the committee’s invitation for offers for Air Jamaica. They have complained of the contemptuous manner in which they were treated.
They were not even been afforded the dignity of an acknowledgement of their proposal. Since it is common knowledge that they were not flooded with offers, the lack of response must be classified as disrespectful and discriminatory. It certainly should not be from inadequate staffing.
With the “chicken feed” sum of US$22 million as funding it would be most unfortunate if there were no secretary who could acknowledge the sole offer that was received by the committee. The Minister of Agriculture and the Cabinet have stated that they received value for money in that sugar divestment deal even though the blunder in trying to give away the Petrojam Ethanol cost the Government US$2 million as payment to COINEX which were co-owners of the operation at the time when the decision was made.
Ineptitude, ignorance, arrogance — pick your choice of adjective, but a partner was not consulted while their assets were packaged and given away with the consent and approval of the minister in charge and the entire Cabinet. That was for sugar. Now it is time for Air Jamaica.
• How much, if any, is left of the US $22 million borrowed from IFC to be utilized to acquire EXPERT ADVICE?
• Who was paid how much to do what?
• Did we have to use borrowed US dollars to pay to be advised to give away Air Jamaica to a foreign entity?
• What is so repugnant and offensive in the workers’ offer that it cannot be looked at along with the EXPERT’S ADVICE?
• Is it not a fact that the workers’ proposal would relieve the government of the need to find US$27 million to settle redundancy entitlements?
• Could it be that the government have no need to factor that aspect of the proposal because they figure they can refuse to pay, consistent with their behavior in the observation of their obligation to other workers?
• Has Caribbean Airlines shown a profit since its inception?
• Is it properly capitalised?
• When the Jamaica Government gives away Air Jamaica for part ownership in Caribbean Airlines how much debt will we be taking on, if any?
• As part owners of Caribbean Airlines, will the Government of Jamaica be indemnified against debts or losses incurred by that entity, which will be operated by the major partner?
Is there any truth in the argument that the restructured Air Jamaica is operating at a operating profit and that the losses in its bottom line is the result of its historical debts?
• If the forgoing is true and the terms of divestment contemplated and so far projected to the country are that the government is prepared to give away Air Jamaica while taking responsibility for the debts, why give it to a foreign entity?
• If it is assumed that viability can be achieved by route rationalization and staff pruning do we have to put Air Jamaica in foreign hands to do what basic management should be capable of doing?
What has caused the US$22 million divestment advisors to fail to seek public reaction to participating in ownership of Air Jamaica?
• Where is the prospectus for public participation?
• It is a known fact that the Jamaican public, including those in the Diaspora, is very attached to Air Jamaica. Is it expecting too much of those involved to have invited Jamaican at home and abroad to participate financially in that piece of Jamaica that flies? Mind you, there is no need to restrict participation to Jamaican nationals. Very likely, innovative marketing could make regular flyers and many of our many times visitors find investing in the airline an attractive proposition. If an attempt was made to sell Air Jamaica, that seems to be a well-kept secret. Even as the deadline drawn by the IMF or promised by our government is fast approaching for the disposal of Air Jamaica, what is known of how the US$22 million was utilized?
Scandals are many and frequent in our country.
Air Jamaica divestment need not be added to the long list. Prompt, accurate and lucid answers to the questions raised could produce the transparency required and serve to enhance the reputation of the parties that had the responsibility to divest Air Jamaica. Of course, failure to respond or inadequate response could have the effect of tarnishing of reputations and add yet another scandal to the list.
How Jamaica’s interest will be better served by Air Jamaica being absorbed by and operated by the Trinidad government owned and operated Caribbean Airlines than it would be in the hands of Jamaicans?
Maybe, the Prime Minister, the Minister of Finance or the chairman of the Air Jamaica Divestment Committee will volunteer to enlighten the nation on. How can it be? HOW COME?
Warren, this really does not matter at all because I am going out on a limb by saying I dont think you use Air Jamaica when you are travelling.
But I use Air Jamaica,
I support them year around and year in.
When they use to go to London it is Air Jamaica and to Toronto, it is Air Jamaica.
They have my support and when JALPA gets it I will be one of those patriotic and loyal Jamaicans that will response to there call to invest in it.
It is time that true and honest Jamaicans stand up for there country.
Wes,
Consider this, who are the people that are responsible for a company making a profit or suffering a loss.
Wells its a function of good management and a competent workforce.
Over the years, Air Ja has lacked both, and the very people now who are campaigning to keep the airlines, were/are partially responsible for its sorry state.
GOJ cannot provide the subsidies you mention- Trinidad will.
GOJ cannot provide a cheap source of fuel - Trinidad will.
If you believe for a moment that the workers and the pilots can make Air Ja profitable and not lose their shirt in the process, then I can therefore posit that they were the one sabotaging the efforts of the airline over the years.
Personally I would not take my redundancy and place in this loss leader, and I am sure many workers have no intention of doing that either, knowing fully well they may NEVER recover their investments.
I say move on with the negotiations, as sentiments and goodwill cannot run a airline.
This fantasy about “that little piece of Jamaica” that flies is nothing but that, a fantasy.
Air Jamaica is a baggage than we should have gotten rid of a long time ago, as we simply cannot afford to run this operation.
Lets move with great speed to get this one off the books.
My only problem is we will be saddled with the enormous debt, but again keeping it will only make that bad situation worse.
Operating Air Ja today is like flushing money down the toilet.
Lets move on, I am sure in the end that we will be better off without it.
Warren, before you continue your campaign to have Air Jamaica disbanded and the workers joining the unemployment line then perhaps you need to consider some facts.
The Trinidad provides subsidy to the airlines in the form of fuel hedging for the airlines, grant waivers to the airlines for the spare parts that it imports. Secondly, the carrier does not face any competition on none of the routes it flies to Port of Spain from its North American operation.
Consider the case of Air Jamaica which does not enjoy any fuel subsidy, or get waivers for spare parts but also face stiff competition on all of the routes to Jamaica.
Since Bruce Nobles took over as CEO of JM the company has seen operational profits but that huge debt continues to put the company in a negative position.
The government of Jamaica will keep Air Jamaica debt and come up with 300USD Million to cover the lay off, to cut the leases for the planes as well as other expenses.
The pilots are saying if the government is keeping the debt then there is no need for the government to find the 300USD as the pillots will take over the company and capitalise its.
They will have 100% control and the government can resassure that they have the equity to capitalise it.
That to me is a valid solution and it is a “IN Jamaica” answer to a major problem
We need to support our people and there effort of building our country.
If JALPA can raise the capital for the short and long term and put in place a management team that will drive the company, then so be it.
Air Jamaica is showing a profit. Let the pilots build on that
negotions for the sale of the airline cannot be conducted in the media. the pilots need to learn that
What is the thing about ‘foreigners’ and ‘giving away’? Is there a whole long queue of people waiting to purchase Air J and the government was turning a blind eye to them? There are, as far as I know two offers: from Carib. Air and JALPA.
Where was JALPA for the how many years that the successive governments have talked about divesting Air Jamaica?
It is this sentimental nonsense that has prevented the governments from getting rid of this thing years ago. Guys, here is a little secret for you: it is quite possible for an airline to wear a country’s name and flag without being publicly owned! Case in point American Airlines, US Air.
I say, if you cannot find someone who wants to buy an item (I refuse to call it an asset) then give it away: it’s done in business all the time.
And stop talking about public participation: float Air J cannot recoup the billions of US$ that it would take to dig out of the hole that it is in and, if under-subscribed leaves the government with very few other options.
By the way, we have at least some partial information about the conditions of Caribbean Air’s offer (staff route/reduction etc) wouldn’t it be helpful for us to get at least some of the details from JALPA’s so we can see if it is a comparable offer? That would be a useful thing for journalists to do with their time.
No time for sentiments, get rid of this Albatross as soon as possible, we simply cannot afford it.
We sold JPS- They made profits after we sold it
We sold Cement Company - They made profits thereafter.
If we can sell the only company that generates electricity for an entire country, and the Cement Company that provides cement for every building that goes up in this country, why should we not sell Air Ja?
DO NOT sell it to the workers, as I am sure in a few years they will be running back to us seeking a bailout.
If they had any interest in the company, they would not have been giving away free flights, while paying passengers could not get a seat.
Sell to ANYONE except the workers.