Three suitors eyeing Air Jamaica -Wehby

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Three suitors eyeing Air Jamaica -Wehby

Unread post by bimjim » Thu Feb 05, 2009 ... _WEHBY.asp

Three suitors eyeing Air Jamaica -Wehby
Wednesday, February 04, 2009

Government is now in talks with three investors to offload national airline Air Jamaica by the self-imposed deadline of March 31 this year.

However, the privatisation committee, chaired by insurance executive Dennis Lalor, has not divulged the three suitors for the cash-strapped airline, only that the prospects are from three different geographic regions.

In a press release yesterday, Don Wehby, minister without portfolio in the finance ministry, said that the privatisation team was required by non-disclosure agreements, which all three investors and the Government have signed, to keep the negotiations confidential.

"Once the winning investor is selected, the Government will undertake the appropriate process to communicate on the main terms of the agreement reached," Wehby said.

According to the release, Government remained fully focused on attracting serious investors within the March 31 deadline already set for the privatisation.

"This is the deadline toward which we are all working and we believe that it can be met," Wehby said.

Last week, Air Jamaica unveiled a new business plan that will see the chopping of six routes, including the iconic Miami destination and a reduction in its number of planes from 15 to nine.

Redundancies, as a result, could surpass 600 workers effective February 26.

At the time Air Jamaica chairman Shirley Williams declined to say if the cost-cutting move was a requirement in the airline's ongoing divestment initiative.

Yesterday, Wehby argued that the privatisation of Air Jamaica, coupled with requirements for the investor to recapitalise the airline and keep the brand, is a better option than keeping the beleaguered airline as a line item on the national budget.

"Trying to keep it could result in a forced closure because of the lack of funds to carry the airline, especially in the context of the present world economic downturn and the hard demands that are being made on the budget," he said.

As a part of the privatisation terms, the successful investor is required to agree to maintain Air Jamaica's identity, provide reliable service on routes to and from Jamaica while ensuring that the national airline's fleet composition and route structure operate at optimal levels of efficiency.

Early last year, as the national airline remained a burden on the public purse losing in excess of US$170 million, government announced its decision to fast-track divestment of the carrier to be completed by March 31 this year.

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