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BALFORD HENRY, Observer writer [email protected]
Saturday, July 05, 2008
AIR Jamaica will need an injection of US$300-$500 million to be able to return to its "glory days" says the minister in charge of the current divestment process, Senator Don Wehby.
"I have done an exercise that says what will it take as a minimum to recapitalise Air Jamaica, so that it can return to its glory days, and the figure that I have come up with is between US$300 million and US$500 million," Senator Wehby, minister without portfolio in the Ministry of Finance and the Public Service, told Wednesday's post- Cabinet press briefing at Jamaica House.
"In other words, that would be the capital injection needed to put the airline in good stead," Wehby added, noting that his arithmetic was based on the US$1.2-billion deficit at the airline. But in response to a question from the media as to when the airline actually enjoyed those "glory days", Senator Wehby said that he had only read about them.
"I think the point I am trying to make is that for Air Jamaica to return to giving taxpayers value for money, there is going to be a need for a capital injection," he explained.
Wehby said in light of that, any partnership the government needs to continue operating the airline beyond the March 31, 2009 deadline for divestment, must have those kind of resources to recapitalise it.
He said that the recapitalisation would have to be on an equity or long-term basis.
The cabinet has been discussing that, in terms of the divestment, it would be willing to keep a 20 per cent share as a minority shareholder.
"We think that would show good faith and a commitment to the national airline," he said.
He said the country has a great asset in the Montego Bay hub, which is ideal for Central and South America and was attractive to potential partners.
"Once the airline has the capital and the technical expertise, I really believe that the losses can be wiped out over a number of years," he added.
He said that the view of the consultants is that the March 2009 deadline can be met.
Wehby also paid tribute to the staff of the airline, who he described as loyal and "passionate about their company".
"They are really, really good people," he said, adding that he was considering offering the workers an employee share ownership programme, which would give them an opportunity to invest in the new entity.