Kingston, Jamaica -- April 23, 2008 -- 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 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.
