Statement to Parliament Air Jamaica Divestment Project
http://www.caribbeanpressreleases.com/articles/6771/1/Statement-to-Parliament-Air-Jamaica-Divestment-Project/Page1.html
S Coward
By S Coward
Published on 05-May-10
Kingston -- May 5, 2010 -- This
government has, since 2007, embarked on a divestment project for Air Jamaica.
Our goals were threefold.
Statement to Parliament Air Jamaica Divestment Project Tuesday, May 4, 2010: Hon. Audley Shaw, MP Minister of Finance and the Public Service
This government has, since 2007, embarked on a divestment project for Air Jamaica. Our goals were threefold:
1. The first was influenced by our recognition of the critical role that Air Jamaica played in the Jamaican economy, particularly in respect of the country's tourism industry. This means that the first goal of the Air Jamaica Divestment Project was to ensure that Air Jamaica's airlift from/to the country would be secured in a sustainable manner.
2. Our second goal grew out of an equally pressing acknowledgment - that is, that Air Jamaica represented an unbearable cash¬drain for the Government's budget. This was not a hastily¬formed assessment; it is a well-known fact that Air Jamaica recorded losses in 40 out of its 42 years of existence.and this led to the accumulation of approximately US$1.5 billion of debt, backed or guaranteed by the Government. The second goal of the project was, therefore, to halt the cash¬drain on the public purse.
3. The third goal, and by no means least, was to save as many jobs as possible, as the path on which Air Jamaica was on was unsustainable and would have resulted in a total loss of jobs. We have so far managed to save approximately 1,000 jobs, two¬thirds of what was on Air Jamaica's payroll on April 30, 2010. Some of these will be short¬term contracts but it provides those employees the opportunity to put adequate plans in place to secure future income streams.
In order to ensure that all these goals were achieved, this Government set as a requirement of the project that Air Jamaica's value - and the experience and skills that have been built up over the years - be protected.
Additionally, we were proactive in our efforts to ensure that the real value that Air Jamaica represented would be very apparent to any prospective investor. Therefore, through several initiatives encouraged by the government - inclusive of the crafting and implementation of a new business plan in 2009 - we saw the airline make steady progress in stabilizing its operations.so that, for instance, reliability could begin to return to more reasonable levels.
Additionally, the airline took steps to strengthen its management team with the appointments of Mr. Bruce Nobles as President and Chief Executive Officer; Mr. Subodh Karnik as Executive Vice President, Commercial Services; and Mr. Howard Hall as Senior Vice President and Chief Financial Officer.
I am to inform you that, with the signing last Friday of a partnership between Air Jamaica and Caribbean Airlines, the three major objectives and their guiding requirement have been met.
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This government has, since 2007, embarked on a divestment project for Air Jamaica. Our goals were threefold:
1. The first was influenced by our recognition of the critical role that Air Jamaica played in the Jamaican economy, particularly in respect of the country's tourism industry. This means that the first goal of the Air Jamaica Divestment Project was to ensure that Air Jamaica's airlift from/to the country would be secured in a sustainable manner.
2. Our second goal grew out of an equally pressing acknowledgment - that is, that Air Jamaica represented an unbearable cash¬drain for the Government's budget. This was not a hastily¬formed assessment; it is a well-known fact that Air Jamaica recorded losses in 40 out of its 42 years of existence.and this led to the accumulation of approximately US$1.5 billion of debt, backed or guaranteed by the Government. The second goal of the project was, therefore, to halt the cash¬drain on the public purse.
3. The third goal, and by no means least, was to save as many jobs as possible, as the path on which Air Jamaica was on was unsustainable and would have resulted in a total loss of jobs. We have so far managed to save approximately 1,000 jobs, two¬thirds of what was on Air Jamaica's payroll on April 30, 2010. Some of these will be short¬term contracts but it provides those employees the opportunity to put adequate plans in place to secure future income streams.
In order to ensure that all these goals were achieved, this Government set as a requirement of the project that Air Jamaica's value - and the experience and skills that have been built up over the years - be protected.
Additionally, we were proactive in our efforts to ensure that the real value that Air Jamaica represented would be very apparent to any prospective investor. Therefore, through several initiatives encouraged by the government - inclusive of the crafting and implementation of a new business plan in 2009 - we saw the airline make steady progress in stabilizing its operations.so that, for instance, reliability could begin to return to more reasonable levels.
Additionally, the airline took steps to strengthen its management team with the appointments of Mr. Bruce Nobles as President and Chief Executive Officer; Mr. Subodh Karnik as Executive Vice President, Commercial Services; and Mr. Howard Hall as Senior Vice President and Chief Financial Officer.
I am to inform you that, with the signing last Friday of a partnership between Air Jamaica and Caribbean Airlines, the three major objectives and their guiding requirement have been met.
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