Air Jamaica on course for possible April 12 takeover

The Bruce Golding administration has been working towards divesting Air Jamaica which has accumulated losses of over US$1.4 billion since its inception in 1969.

KINGSTON, Jamaica, March 4, 2010 – April 12th is the date the Jamaica government is hoping to hand over the country’s national carrier to Caribbean Airlines, according to a memo circulated to staff yesterday.

It is the clearest indication yet that the sale of cash-strapped Air Jamaica to the Trinidad and Tobago airline is a done deal.

"We are working with Caribbean (Airlines) towards a transaction date concurrent with our major schedule change on April 12, 2010," Air Jamaica’s President and Chief Executive Officer Bruce Nobles disclosed in the correspondence to workers.

Nobles told the employees in the memo that they would be made redundant on that target date, but they would have an opportunity to reapply for employment.

The announcement to staff came as a transition team from Caribbean Airlines was in the island to complete due diligence work at Air Jamaica. That includes a review of information about employees, company policies, as well as conducting interviews and psychometric testing.

"The current transition proposal is to continue to operate Air Jamaica utilising our existing fleet under contract to Caribbean Airlines for perhaps as long as one year. Caribbean Airlines will be financially responsible for the transition operation after the transaction date," Nobles wrote.

"A new company will be formed to hire the personnel required. Those employees will be hired under fixed-term contracts. The number of jobs required and the terms and conditions of employment are still being finalised,” he added.

The Bruce Golding administration has been working towards divesting Air Jamaica which has accumulated losses of over US$1.4 billion since its inception in 1969. 

In the last three years alone, it has incurred US$337 million in losses.

The Jamaica Airline Pilots Association (JALPA) had submitted a bid to government to buy the airline to keep it in local hands. 

But Prime Minister Golding said the pilots’ plan is seriously flawed in multiple areas. He also indicated that JALPA hasn’t proven it can either execute the takeover or sustain the operation.