Air Jamaica divestment strategy in the works

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bimjim
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Air Jamaica divestment strategy in the works

Unread post by bimjim » Fri Nov 28, 2008

http://www.jamaica-gleaner.com/gleaner/ ... lead6.html

Air Jamaica divestment strategy in the works
published: Thursday | November 27, 2008

Government's desperate bid to divest Air Jamaica got a multi-million shove in the right direction yesterday with its signing of a technical cooperation deal with the Inter-American Development
Bank (IDB).

The agreement is non-reim-bursable. The treaty, titled 'Strategy for the Divestiture of Air Jamaica', is valued at US$440,000 (about $33 million) and was signed by Minister without Portfolio in the Ministry of Finance and the Public Service, Don Wehby, and Gerard Johnson, IDB country representative, at the finance ministry's National Heroes Circle office in Kingston.

The lion's share of the money - US$350,000 (about $26 million) - will be funded through the French Technical Cooperation Fund for Consultancy Services and Training Activities - Caribbean Contribution. Air Jamaica will fund the remaining US$90,000 ($7 million).

Reducing allocations

A Jamaica Information Service (JIS) press release issued yesterday stated the local carrier's "contribu-tion includes the provision of office facilities and coordination, as well as the local lawyers and part of the financing for the regional airline specialist".

"The objective of the technical cooperation is to support the Government of Jamaica in reducing its budgetary allocations to loss-making public entities," read a section of the release.

At the same time, the JIS pointed out that the purpose of the accord was to prepare a strategic plan for the divestiture of the company, by auditing the financial and technical systems and providing the required inputs for informed decision making.

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Re: Air Jamaica divestment strategy in the works

Unread post by bimjim » Sat Dec 06, 2008

http://www.jamaica-gleaner.com/gleaner/ ... lead4.html

Opposition senator wants Air J privatisation deadline rescinded
Published: Saturday | December 6, 2008

NOEL SLOLEY, People's National Party (PNP) senator wants the Government to rescind the deadline for the divestment of the national airline and assure customers that it will continue to support the airline until a suitable purchaser is found.

Sloley said while his party was in agreement with the Government's decision to divest Air Jamaica, the rigid timeline set for divestment was unrealistic and undercutting the bargaining position of the Government.

State of the nation debate

The senator was making his contribution yesterday to the State of the Nation Debate in the Upper House.

The Government has set March 2009 as the deadline for privatising the airline.

Sloley argued that when a deadline is set, certain messages are articulated, noting that customers will start to look elsewhere, suppliers will stop extending credit, competitors use the opportunity to induce customers and it demoralises staff.

Alternative plan

He also suggested that the management of the airline prepare an alternative plan.

Air Jamaica has a total market share of 44 per cent, comprised of 50 per cent of all Jamaican passengers; and 31 per cent of all visitors, which is nearly twice the number of visitors carried by any other airline.

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