Beyond sentiment at Air Jamaica
THIS NEWSPAPER understands the emotional connection of Jamaicans to the national airline, Air Jamaica, and their concern over the likelihood of it being absorbed into Caribbean Airlines, the carrier owned by the Trinidad and Tobago government.
Indeed, the growing chorus for those negotiations to be halted and Air Jamaica to be divested to a staff group, led by the airline's pilots, is appreciated.
But as Prime Minister Bruce Golding has been making plain, serious business is not governed by sentiment - certainly not when the firm's owner is confronted by the kind of financial bind in which Jamaica's government finds itself. Which is why if the pilots' group is to be taken seriously, it has to place on the table far more than sentiment or a theoretically workable business plan.
They have to show the capacity to recapitalise the airline adequately with equity, so that Air Jamaica is not again burdened with debt. Air Jamaica can harbour no prospect of a future bailout.
It is widely known that the Government is under pressure from the International Monetary Fund (IMF) either to divest or shut down the airline. This is a condition for a US$1.2-billion loan from the fund.
The IMF's argument, which it has been making for years in Article IV Consultation reports, is that the Jamaican Government simply cannot afford Air Jamaica, which has accumulated losses of over US$1 billion and debt of US$500 million. Much of this was accumulated when the airline was ostensibly under majority private ownership.
Obviously, those losses will be left with Jamaican taxpayers, whether Air Jamaica is sold or closed. Clearly, any new arrangement cannot include the possibility of returning it as a burden on the public treasury.
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