THE Government is looking at a whopping US$125-million (J$8.3-billion) bill to keep the national airline, Air Jamaica, flying for another two years.

Minister of Information and Development Donald Buchanan told yesterday’s post-Cabinet press briefing at Jamaica House that Cabinet has decided that Air Jamaica will continue to fly, but will be restructured along the lines of a revised business plan which requires US$125 million.

Cabinet had rejected a previous plan put forward last October by chairman O K Melhado and president/CEO Mike Conway, and demanded that the plan must operate within its US$30-million government subsidy.

Buchanan said then that a Cabinet sub-committee, chaired by Finance Minister Dr Omar Davies had rejected that plan, and recommended that the management formulate a new plan with provisions for downsizing, including eliminating unprofitable routes and refleeting, as well as looking at options for new leases and sub-leases.

Yesterday Buchanan said, Melhado and Conway returned with their new business plan and Cabinet decided that the airline must keep flying and accepted the plan.

“I know that the big question is going to be what this is going to mean in terms of financing, and there are certain capital requirements, the minister said.

“The airline has been operating at a deficit for sometime and there is the need for the injection of some US$60 million to ensure that the airline meets all of its capital requirements,” Buchanan said.

“Going forward over a two-year period, the proposal is that the airline will need another US$65 million to take it to the end of 2008,” he added.

Pressed for details, he said, “that is the proposal, basically. at some time the board and management will speak more extensively to the details”.

He said that any financial assistance to the airline is going to be a matter of detailed discussions between the Ministry of Finance and the airline.

However, he insisted that the government is committed to keeping a restructured Air Jamaica flying, so specific arrangements will have to be made for the financing.

He said that yesterday’s presentation to the Cabinet by the management was primarily based on a five-point strategic plan spanning increased liability; route rationalisation; consolidation of the administration of the airline in Kingston; outsourcing of Air Jamaica Vacations Limited; and the conversion of Airbuses to Boeing.

Asked why Cabinet was making a final decision before the completion of an enquiry by a Parliament-appointed select committee (which is reviewing the airline’s losses and viability), Buchanan said the deliberations of the committee were taken into consideration in arriving at the decision.

He added that the committee, which will continue meeting tomorrow, is yet to compile a report to Parliament.

He said that Davies gave Cabinet an update on the deliberations of the committee yesterday.