KINGSTON, Jamaica, May 30, CMC – The head of the divestment team involved of the sale of Air Jamaica to the Trinidad-based Caribbean Airlines (CAL), Dennis Lalor, has rejected claims that the airline’s multi-million dollar debt is to blame for CAL’s current financial problems.
“The Government of Jamaica assumed all liabilities of Air Jamaica, providing CAL a clean slate as it relates to Air J’s operations,” Lalor told the Jamaica Observer newspaper on Wednesday, adding that this was done to ensure that CAL would have no disadvantages when it got the Air Jamaica brand.
“In addition, the Government of Jamaica provided CAL with cash of over US$17 million, which represented tickets prepaid for by customers not yet flown.”
Earlier this month, Trinidad and Tobago’s Transport Minister Devant Maharaj said the burden Trinidad and Tobago had to endure because of Air Jamaica arose out of the “imperialist ambitions of former prime minister Patrick Manning, as he attempted to become the colonial master of the Caribbean”.
He said in addition, local tax payers “have been paying for the luxury of Jamaicans flying at a fuel subsidy”.
Trinidad and Tobago’s Finance Minister Winston Dookeran told Parliament this month that the state-owned airline had recorded losses in excess of TT$50 million (US$8.3 million) last year, and owed several creditors including the United States Inland Revenue Service and the Norman Manley International Airport in Jamaica millions of dollars.
In 2010, Port of Spain and Kingston agreed to a deal that allowed the Jamaica government to own 16 per cent of CAL as part of the conditions for CAL taking over the lucrative routes of Air Jamaica.
The deal also allows for Trinidad and Tobago agreeing to a US$300 million transition plan for CAL to acquire and operate six Air Jamaica aircraft and eight of its routes.
When it came to office following the May 24, 2010 general election, the five-party coalition government of Prime Minister Kamla Persad Bissessar said it would review the accord, but Dookeran later announced that the government was okay with the agreement.
When he signed the agreement with his then counterpart Audley Shaw in May last year, Dookeran said Caribbean Airline would now “have legal access to all the routes that were being flown by Air Jamaica, giving it an opportunity to expand in the global arena”.
Lalor told the Jamaica Observer newspaper that CAL did not get any assets or liabilities of Air Jamaica when it started operating the national airline in May 2010, nor were Air Jamaica’s operations merged with CAL’s even when it began operating under the Caribbean Airline’s brand a year later.
CAL took over Air Jamaica routes that it continued to operate under that brand and for which “CAL has the exclusive right to use in exchange for maintaining certain minimum service levels”.
Lalor said Jamaica’s role was to make it easier for CAL to operate as its national airline by supporting a waiver that allowed Air Jamaica to continue flying to North American markets. These include routes to Fort Lauderdale, New York and Toronto.
The Jamaica government’s involvement with Air Jamaica is limited to the appointment of one director, currently Lalor, who represents the country’s minority share.