A report in the Jamaica Gleaner newspaper said the Americans provided the grant shortly after Bruce Golding was sworn in as Prime Minister.
The Golding administration sold Air Jamaica to the Trinidad and Tobago national carrier, Caribbean Airlines (CAL), which took 84 per cent of the shares of the airline, with Air Jamaica retaining the remaining 16 per cent. However, under the sale agreement CAL did not assume Air Jamaica's debt amounting to more than US$700 million.
According to the Gleaner report, the American embassy in Kingston had warned the previous government of the risk that the Jamaican carrier could be grounded if it didn't divest it. However the Portia Simpson Miller PNP government ignored the advice.
"The Government of Jamaica simply does not grasp the dire predicament faced by Air Jamaica. The carrier literally could cease operations at any time," the Americans warned in a cable dated December 2006.
"A cocktail of enormous and growing debt, a lack of political will to make painful and expensive choices, pervasive corruption among the business and political classes and the possibility of a low-cost carrier coming to Jamaica and forcing the state-run carrier out, all point to an impending collapse," the cable added.
The Americans had long believed that the country should get rid of the airline which was costing taxpayers billions of dollars each year, but believed successive governments lacked the political will to make the necessary move until Golding took charge of the country's affairs, the Gleaner said.
The paper said a number of diplomatic cables from the Embassy in Kingston to Washington suggested that the sale of Air Jamaica would be good for Jamaica. It even said that a former CEO had warned that the airline "could literally sink at any minute" due to losses of US$700 million between 1994 and 2004.
The cable from the Americans said Simpson Miller rejected a salvage recommendation due to cost considerations.
"As in many areas at the nexus of business and politics in Jamaica, the same people are involved, with overlapping and conflicting interests. The result is a belief that the worst could never happen and if it does, the Government of Jamaica will come to the rescue," the cable said.
"A cocktail of enormous and growing debt, a lack of political will to make painful and expensive choices, pervasive corruption among the business and political classes and the possibility of a low-cost carrier coming to Jamaica and forcing the state-run carrier out, all point to an impending collapse," the cable added.
The Americans had long believed that the country should get rid of the airline which was costing taxpayers billions of dollars each year, but believed successive governments lacked the political will to make the necessary move until Golding took charge of the country's affairs, the Gleaner said.
The paper said a number of diplomatic cables from the Embassy in Kingston to Washington suggested that the sale of Air Jamaica would be good for Jamaica. It even said that a former CEO had warned that the airline "could literally sink at any minute" due to losses of US$700 million between 1994 and 2004.
The cable from the Americans said Simpson Miller rejected a salvage recommendation due to cost considerations.
"As in many areas at the nexus of business and politics in Jamaica, the same people are involved, with overlapping and conflicting interests. The result is a belief that the worst could never happen and if it does, the Government of Jamaica will come to the rescue," the cable said.
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