Captain Ian Brunton negotiated the deal while he was CEO under the direction of the previous board, led by Arthur Lok Jack.
The new CAL board of directors, chaired by George Nicholas III, said in a media release issued earlier this month that it's possible that CAL might scuttle the merger with the Jamaican carrier.
It also confirmed that on November 11 Brunton suggested to the board that CAL "should not complete the Air Jamaica transaction, which the previous government of Trinidad and Tobago agreed to on May 1, 2010 and which this administration, after its due diligence, agreed to complete".
Under the deal worked out between the Manning administration and the Jamaican government, Air Jamaica would retain 16 per cent of the airline's shares, with CAL taking the other 84 per cent. CAL agreed to operate Air Jamaica's profitable routes.
Despite its pledge not to pump money into the Air Jamaica deal, the Manning government agreed to invest US$50 million (TT$315 million) in Caribbean Airlines Ltd (CAL) to meet "operating and capital expenditure" following the Air Jamaica takeover.
"The way we have worked it out, we expect that we would get a fairly good return on that money coming into 2011. What we expect and looking at it conservatively is US$12 million to US$15 million per year," Lok Jack told reporters in April.
He added, "So we are not taking on any costs at all and what we have happening here is that we are getting a clean operation with routes that we want, not routes that we don’t want...
“We found them (routes) to be very good routes with good load factors, they were developed routes with a number of people flying and the revenue at hand was quite substantial for those routes".
He said there are "no skeletons in the closets" and as a result CAL will move from owning nine aircraft to approximately 15.
Prime Minister Kamla Persad-Bissessar told her Jamaican counterpart, Bruce Golding, in July this year that Trinidad and Tobago would honour the agreement made by the previous government for Caribbean Airlines (CAL) to take over the operations of Air Jamaica.
She also told Golding the brand name Air Jamaica would be maintained. She made the commitment during a visit to Kingston for talks with Golding.
In September, during a visit to Jamaica on FIFA business the airline's line minister, Jack Warner, told Jamaicans they have nothing to worry about with respect to the deal. He admitted having reservations about the merger but was comfortable with it after talking with the experts both in Jamaica and at his ministry in Port of Spain.
"I hope this is the last time I will have to say this, but there is no need to worry, and on October 21 when the contract is signed it will signal a new beginning for Air Jamaica," Warner declared.
However since then things have changed, with Air Jamaica continuing to report losses in the last six months, The Gleaner said.
It quoted a source close to Warner as expressing concerns. "My belief is that Air Jamaica has been continuing to record losses.
"Even with the CAL fuel subsidy (based on a US$1.50 per gallon price to CAL: current price US$2.50), they are substantial and could become significant in what will be a political debate in Trinidad and Tobago if the current impasse between the Minister of Transport Jack Warner and the board continues," the source said.
Air Jamaica had accumulated debt of more than TT$12 billion when it announced the merger with CAL in a memo to staff in March this year.
The memo from Air Jamaica’s President and Chief Executive Officer Bruce Nobles stated: "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...
"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.
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