Govt acts fairly, responsibly in Air Jamaica’s divestment
In governing a country the Executive cannot allow sentiment to rule. Take the case of government and the divestment of Air Jamaica, for example. Since its inception in 1969, Air Jamaica has incurred accumulated losses of more than US$l.4 billion or $126 billion. In the last three years alone, the losses have been put at US$337 million or $31 billion.
The national airline is so strapped for cash that it is selling two of its aeroplanes to cover outstanding taxes owed to the US Internal Revenue Service. It also owes the US Department of Agriculture, and the airline is selling five floors it occupies on its Harbour Street building in Kingston.
It ought to be clear to everyone that taxpayers cannot afford to keep the airline flying because it is eating away what little the country has. While this is happening, the country is under severe economic stress and cannot find sufficient money to adequately finance critical health, education and security services. It does not make sense for the government to continue to own and operate the airline. This is not a complex issue and everyone should understand the problem with which Jamaica is faced.
About three years ago I came to the conclusion that the cost of keeping the airline must be taken off the backs of taxpayers. Before expressing that view in this column, I interviewed Vincent Morrison, head of the National Workers Union, which represents Air Jamaica’s workers, to get his views because the interest of the workers has to be taken into consideration. Morrison said that the airline should be given one last chance. Since then the airline has lost $31 billion. Its privitisation, therefore, was inevitable.
Honestly, I would have liked the airline to remain in local hands, providing it does not continue to bleed taxpayers. In this regard, it is a pity that the attempt by the Jamaica Airline Pilots Association to acquire the airline came so late. The association has only itself to blame, certainly not the government. The association failed to submit its proposal to purchase the airline when the international call for the expression of interest was issued.
Apparently, there was a misunderstanding on the part of the association. The group believed that a prospective bidder would have to be prepared to assume Air Jamaica’s liabilities which are heavy. However, Prime Minister Bruce Golding said no such condition was stated in the invitation for the expression of interest.
Perhaps the most important point made by the government concerns a matter of principle. The divestment choice boiled down to two bidders – Indigo Partners and Caribbean Airlines. On conclusion of the evaluation, Indigo Partners were evaluated as marginally superior to Caribbean Airlines. The government therefore gave approval for negotiations to be entered into with Indigo Partners but the negotiations failed to reach any agreement. As usually happens in such matters, negotiations were entered with the second-ranked bidder, Caribbean Airlines.
The only conclusion one can draw from the facts is that the government acted sensibly, fairly and responsibly in the divestment procedure.