By Vernon Khelawan Thursday, February 11 2010

IN the last few weeks there have been several assurances, both in Kingston and Port-of-Spain, that the debt-ridden, state-owned Air Jamaica would be either merged or sold to Trinidad and Tobago’s Caribbean Airlines. Now there is word that nothing would be made public until April 01 2010.

As a matter of fact there are reports that the Bruce Golding administration last week signed a non-binding letter of intent with Caribbean Airlines. Finance Minister Audley Shaw, while admitting negotiations were still going on, he would have nothing to say about the deal until he delivers his 2010/2011 Budget Speech now scheduled for April 01.

Hinting that his government was not about to look at any other proposals, the finance minister said the focus of his government right now was to negotiate with Trinidad and Tobago, notwithstanding that there was a proposal from the Jamaica Airline Pilots Association (JALPA) as well as another from an unnamed overseas investor.

He said the only way the Jamaican government would consider talking to JALPA was if talks with TT broke down.

Shaw said the pilots association had been sending correspondence to both himself and the prime minister, but he said their letter of interest had come too late in the day and as such could not be allowed to supersede the procurement process which had been clearly established.At one time the International Monetary Fund (IMF) which last Thursday approved a 27-month standby facility of (US)$1.27 billion to assist in the country’s economic reforms, was insistent that the Air Jamaica issue had to be settled before the facility would be considered.

That is no longer the case since (US)$640 million of that money has now become available to Jamaica although there has been no conclusive arrangement regarding the sale or merger of Air Jamaica.

Shaw disclosed that under the agreement being negotiated Caribbean Airlines would have an equity stake in Air Jamaica, but would not contribute any cash.

Air Jamaica last year lost (US)$90 million and is currently carrying a debt of (US)$900 million. The airline would need (US)$300 million to take care of severance benefits for about 900 staff, who will be laid off and aircraft that would be taken out of service.

Meanwhile it was revealed last week that Caribbean Airlines had made a (TT)$34 million profit in 2009, following losses totalling (TT)$117 million in 2007. This was disclosed when the Consolidated Financial Statements were laid in the Upper House last week Tuesday.