A memo circulated to the staff at Air Jamaica says the Golding government is hoping to complete the handover of the airline to Caribbean Airlines (CAL) by April 12, 2010.The Jamaican airline has an accumulated debt of more than TT$12 billion. So far, there is no formal announcement from either side, but sources say the memo is the clearest sign yet that there is no turning back from the agreement.
The financial commitment from CAL is unclear. According to the Air Jamaica memo, CAL will be financially responsible for the transition period, which is expected to last at least one year. But the Manning administration has said it is no putting cash into Air Jamaica.
The memo from Air Jamaica’s President and Chief Executive Officer Bruce Nobles states: "We are working with Caribbean (Airlines) towards a transaction date concurrent with our major schedule change on April 12, 2010...
"The current transition proposal is to continue to operate Air Jamaica utilising our existing fleet under contract to Caribbean Airlines for perhaps as long as one year. Caribbean Airlines will be financially responsible for the transition operation after the transaction date," Nobles wrote.
"A new company will be formed to hire the personnel required. Those employees will be hired under fixed-term contracts. The number of jobs required and the terms and conditions of employment are still being finalised,” he added.
Nobles advised employees that they would be made redundant on the April 12 target date, but they would have an opportunity to reapply for employment. A transition team from Caribbean Airlines is in Jamaica working on the handover.
The team is looking into a variety of matters, including a review of information about employees, company policies, as well as conducting interviews and psychometric testing.
The Jamaican government has been trying to unload the debt-ridden airline for a while. Air Jamaica has accumulated losses of over US$1.4 billion (TT 10.08 B) since its inception in 1969. Its debt in the last three years has been US$337 million (TT$2.1B).
The government considered and rejected a bid from The Jamaica Airline Pilots Association (JALPA) to keep the airline in Jamaica.
Prime Minister Bruce Golding said the JALPA plan was seriously flawed and that the organization did not show that it was capable of sustaining the airline's operations.
JALPA had offered to put up the US$60 million equity required to buy Air Jamaica and its efforts sparked an unofficial "Keep Air Jamaica Jamaican" campaign.
The pilots had the support of all departments at Air Jamaica as well as the National Workers Union (NWU), which represents close to 1,000 of the airline's 1,900 workers.
NWU President Vincent Morrison had also questioned the credibility of Caribbean Airlines. He claimed that CAL lacks the capacity to sustain Jamaica's tourism sector or farm work programs in the United States and Canada.
But Godfrey Dyer, the former president of the Jamaica Hotel and Tourist Association, did not buy into the nationalism idea, saying it should not be a criterion for making a decision on air Jamaica's future.
He that sentiment is what got Air Jamaica into the trouble it currently faces.
Under the takeover arrangement, Caribbean Airlines would take over Air Jamaica's routes, drastically reduce staff and retire some aircraft. CAL would be designated Jamaica's official carrier.
Read more: Air Jamaica's final flight April 12
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