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Finance Minister Audley Shaw has rejected claims that the delay in the transfer of Air Jamaica to Caribbean Airlines is linked to the Government's failure to complete negotiations with the United States Department of Transportation (DOT).

"The fact is that before Caribbean Airlines can take over the routes of Air Jamaica, there must be an agreement between the Government of Jamaica and the government of the United States, a process which has started but will take some months to be completed," Shaw told Parliament yesterday.

"During this transition period, the airline will operate using its current exemption authority. There is no issue for us to be concerned about," added Shaw.

He repeated the claim of the Air Jamaica management that the delay in the transition from April 1 to April 30 was to allow both parties to finalise the terms and conditions of the contract.

According to Shaw, talks are continuing with the US and Canadian departments of transport to ensure that all the regulatory issues were in place before the transition was complete.

Redundancy pay exercise

The finance minister noted that Air Jamaica would continue to fly during the transition period before it morphs into Caribbean Airlines.

Shaw also confirmed reports that the redundancy payment to Air Jamaica employees would be delayed for the 18 days until the transition begins.

He said $22 billion had been budgeted this year to deal with the cost of divesting the airline.

On Wednesday, hours after the Air Jamaica Divestment Team an-nounced the delay in the transition, industry insiders pointed to the need for the Government to complete talks with the US DOT to allow an airline not owned by the Jamaican Government to enjoy the privileges granted to Air Jamaica.