Air Jamaica deal safe – T&T PM

(Jamaica Gleaner) Jitters over whether a merger of Air Jamaica and Caribbean Airlines Limited (CAL) would fall through were put to rest on Thursday night, as Trinidad and Tobago Prime Minister Kamla Persad-Bissessar said her government would honour the deal, despite perceived looming risks.

This commitment comes after Persad-Bissessar’s United National Congress announced a review of the deal immediately after taking office in May.

“I’m sure we could do some things differently, but I am not going to go back to that,” Persad-Bissessar told journalists at Jamaica House.

“When you put the pros and the cons together, the bottom line from our review is that it would be advantageous to Jamaica and Trinidad and Tobago to honour the agreement,” she declared.

One of the risks to the deal, Persad-Bissessar highlighted, was that Jamaica’s open skies agreement with the United States (US) would lead to greater competition from low-cost airlines out of the US.

Another danger, she said, was that when Air Jamaica’s fuel subsidy ends on December 31, “We run the risk of that increased fuel cost putting us into a loss position.

“When you couple this with the low-cost airlines coming into Jamaica, there is a risk in that regard,” Persad-Bissessar said during a joint press conference with Jamaica’s Prime Minister Bruce Golding.

“But in every business venture there are risks, but we did the risk analysis and the bottom line is we decided to go ahead with the deal,” she added.

After months of intense negotiations, CAL finally took over the operations of Air Jamaica on May 1.
Under the agreement, Caribbean Airlines is expected to pump almost US$50 million into the beleaguered Air Jamaica, which managed to turn a profit just once in its 42-year history.

Air Jamaica employees, led by the Jamaican Airline Pilots’ Association, pushed to keep the airline in Jamaican hands but came up empty.

Finance Minister Audley Shaw has said the sale of Air Jamaica will save the country millions of dollars in subsidies given to the national carrier every year.

Persad-Bissessar defended the review, pointing out: “We did not know what the deal was and the people of Trinidad and Tobago didn’t know anything about it.

“It was prudent, in my view, for the incoming government to review the agreement to see if it was in keeping with the thrust of the new government,” she said.

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