OUR NATIONAL air carrier is once more in trouble, hobbled by high fuel and staff costs. Jamaicans, naturally, must do what we can to ensure its survival as the airline plays a critical role in tourism as well as assisting the country's exporters.
But at the same time as we lend our support, the taxpayers of this country need to know what it is they are supporting. Just what is the implication for the public purse of the airline's recent run of bad luck?
It was privatised in 1994 for a reason. Putting Air Jamaica into private hands was meant to end the steady drain on the country's finances it had become and introduce the discipline of private sector ownership.
Since then the airline embarked on an ambitious expansion
programme which had been intended to create a vibrant and
profitable niche carrier. It has not.
What had been a steady stream of losses has since become a flood. And it should be understood that Air Jamaica is in no way unique in this respect. Many well run airlines are in the same predicament because it is a costly and tough business to be in.
The result is that the Government is increasing its stake in the carrier. CEO Christopher Zacca said earlier this week that negotiations were now taking place to increase the Government's stake to 45 per cent with the 'Butch' Stewart-controlled Air Jamaica Acquisition Group (AJAG) holding 55 per cent.
The Government has also provided quite a bit of support in terms of loan guarantees for the airline along with some other inducements.
We do not question the level of support Air Jamaica is receiving. What we do question is that the way in which taxpayers are informed about this, or more accurately, how they have not been informed.
To the best of our knowledge, there has been no attempt to explain why providing government guarantees for a private company on an ongoing basis is the most appropriate means of support for Air Jamaica. We also recall that an explanation for the deferred financing of roads and road repairs only came about after the policy had been implemented and become well established.
In comparison with the giants of the airline industry Air Jamaica is a tiny airline. Yet, its pilots are said to be among the highest paid in the industry; a factor which may be related to its enviable record of operational safety. Still, this is a significant element of cost that has to be looked at.
In implementing the cost-cutting measures indicated we think it imperative that there should be more transparency inasmuch as the Government's stake in the airline is being substantially increased.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
