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Caribbean Airlines to take control of Air Jamaica next month

Gary Spaulding, Senior Gleaner Writer

The Government is banking on handing over national carrier Air Jamaica to Trinidad and Tobago-operated Caribbean Airlines by April 12, says Bruce Nobles, president and chief executive officer of the national airline.

Nobles told employees in an internal memorandum yesterday that their positions would be made redundant on that day.

He suggested that negotiations have been smooth, with no hint that the talks could grind to a screeching halt before the deadline.

"We are working with Caribbean (Airlines) towards a transaction date concurrent with our major schedule change on April 12, 2010," Nobles disclosed.

He, however, acknowledged that the date was a "target" and could change.

"The plan is that all employee positions at Air Jamaica Holdings Ltd will be made redundant effective with the transaction date," he revealed.

He said Caribbean Airlines will be financially responsible for the transition operation after the transaction date.

"They have been engaged in a due diligence exercise over the last few weeks, with steady progress made in this regard," the Air Jamaica boss noted.

In order to operate the "transition" Jamaican operation, Nobles said a new company would be formed to hire the personnel required.

"Those employees will be hired under fixed-term contracts," he said.

Nobles told employees that the number of jobs required and the terms and conditions of employment are still being finalised.

However, he said members of the transition team from Caribbean Airlines are currently at Air Jamaica completing their due diligence work, which includes a reviewing of information about employees, Air Jamaica's company policies, as well as conducting interviews and psychometric testing.

Divestment process

Nobles said the process of divesting Air Jamaica has continued assiduously since his last communication with the employees, culminating with the signing of the letter of intent with Caribbean Airlines.

He divulged that the divestment exercise has now evolved to a position where certain decisions have been taken and associated timelines determined.

Nobles reiterated that the Government has made it clear that it was not in a position to continue providing financial support for Air Jamaica going forward, and if the transaction with Caribbean Airlines cannot be satisfactorily completed in short order, the options for the Government and for Air Jamaica become very limited.

"As a result, we are working diligently to develop a structure that will ensure that customers can and will continue to book and fly to and from Jamaica with confidence," he stressed. "At this time, we are therefore developing a strategy to ensure a 'seamless' transition for our customers."

Nobles said the current transition proposal is to continue operating the airline, utilising its existing fleet under contract to Caribbean Airlines, for perhaps as long as one year.

gary.spaulding@gleanerjm.com