Jamaicans abroad upset at sale of Air J

[Tuff Gong]

Re: Opposition committee to meet JALPA on Monday

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"> the don't directly compete </div></div>
Exactly! They are doing us a favour against the wishes of even their own people.
What they are getting out of it is the gates and some routes that might remain profitable.

From what we hear/see so far they are not even getting the name and the 20%-or so that the GOJ is reputed to be retaining seems more of a ransom so that we don't screw things up than any meaningful leverage by the GOJ.

[RichD]

Re: Opposition committee to meet JALPA on Monday

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Tuff Gong</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"> the don't directly compete </div></div>
Exactly! They are doing us a favour against the wishes of even their own people.
What they are getting out of it is the gates and some routes that might remain profitable.

From what we hear/see so far they are not even getting the name and the 20%-or so that the GOJ is reputed to be retaining seems more of a ransom so that we don't screw things up than any meaningful leverage by the GOJ. </div></div>

doing us a favour? ridiculous

[Tuff Gong]

Re: Opposition committee to meet JALPA on Monday

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">doing us a favour? ridiculous </div></div>

Let's test it.

Jamaica defaulted on local obligations recently.
Jamaica's debt to GDP ratio is +100%
They Government has seen the need to freeze Public sector wages almost unilaterally.
The IMF agreement calls for Air Joke to rolled up with or without a buyer by the end of March.
The PM went to Trinidad and begged them to take the Dead bird, causing a stink in Trinidad.
CAL is a regional carrier that operates in a very limited market and from all appearances did not look like it was trying to get out of its sandbox.

Yep....from my seat in the penny section this looks like a <span style="font-family: 'Arial Black'">huge favou</span>r the the Calypso Airlines is doing us.

[RichD]

Re: Opposition committee to meet JALPA on Monday

so is the PM great power of persuasion that got the deal done?


why do they need this favour from the trinidadians now whan you see a local group claiming that they will do this favour too?



ETA:


why not just shut it down?

[Tuff Gong]

Re: Opposition committee to meet JALPA on Monday

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">so is the PM great power of persuasion that got the deal done?</div></div>

I didn't say it was the PM's great power of persuasion that got the deal done. The Trinidadian Prime Minister seems always ready to help out a stricken Jamaican Political Leader he did so with PJoke and Sistah P by signing a memorandum for the delivery of LNG that was not worth the piece of rag it was written on. It helped the PNP to create a certain impression but evaporated when the light of day was shone on it....

So he has a history.


<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">why do they need this favour from the trinidadians now whan you see a local group claiming that they will do this favour too?</div></div>

You have to be dyslectic or deliberately trying to shut out the facts.
The selling of Air Joke by the JLP Government is two years in gestation.
Air Jamaica's sell rule/the GOJ's rules (confirmed by OCG) prevents is from dealing with more than one party at a time. The so-called local group:

A. is not local (but headed by local fronts)
B. did not declare an interest via the rules till late in the day.

As it is if the Calypso Punch fall through then maybe another interested party can get in before the final hammer falls and the roll up the carpet on Air Joke.

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">
ETA:

why not just shut it down? </div></div>

<span style="font-family: 'Arial Black'">LOL</span> wouldn't you try to get money out of junk before you toss it?
I do that every day....try to wring something out of that Lead Bird if they can before the interment.

[evanovitch]

Lalor outlines Air Jamaica Divestment process

Lalor outlines Air Jamaica Divestment process

The committee responsible for the sale of Air Jamaica is defending the government's action so far in the divestment process.

The committee says it is satisfied that, throughout the life of the Air Jamaica Divestment Project, the government has taken all the necessary steps to ensure a fair and transparent bidding process.

It says every effort was also made to protect Air Jamaica against the threat of transferring its management to an unqualified and unprepared investor.

In a release on Saturday, Dennis Lalor, Chairman of the Air Jamaica Divestment Committee, said he wanted to bring clarity to the discussion about the process for the divestment of Air Jamaica.

According to Mr. Lalor, several questions have arisen in recent weeks about the sale of Air Jamaica namely, the objectives of the Air Jamaica Divestment Project.

Mr. Lalor said <span style="font-weight: bold">the main objective of the divestment project is to ensure the long term, sustainable development of Air Jamaica, through a partnership between the government and a private sector investor who had adequate technical expertise and financial strength and who would implement a sound business plan for the entity's future</span>.


The Chairman of the Air Jamaica Divestment Committee added that <span style="font-weight: bold">in order to ensure that the bidding process was transparent; the committee prepared and issued a teaser to investors between April and May 2008.</span>

<span style="font-weight: bold">Advertisements were also placed in international newspapers such as The Economist and The Financial Times, as well as in specialized aviation publications. </span>

According to Mr. Lalor, in all of the communication materials, the government established clear guidelines that potential investors were asked to demonstrate.

Among them were their technical expertise and financial strength as it did not want to divest the airline to a party which would be incapable of ensuring the long term, sustainable development of Air Jamaica.

IndiGo Partners &amp; Caribbean Airline's met requirements

Mr. Lalor said seven companies submitted expressions of interest, five of which fulfilled the requirements to provide information on their financial strength and aviation expertise.

<span style="font-weight: bold">The Divestment Committee analyzed the submissions and concluded that four of the five companies met the technical and financial criteria but ultimately two of them - IndiGo Partners and Caribbean Airlines - submitted proposals before the deadline of June 30, 2009. </span>

He said both IndiGo Partners and Caribbean Airlines met the qualifications; however, each proposal had different strengths and weaknesses.

According to Mr. Lalor, IndiGo Partners' proposal scored marginally higher than that from Caribbean Airlines and, as a result, the Divestment Committee recommended its bid to the government.

<span style="font-weight: bold">IndiGo talks failed, Caribbean Airline engaged </span>

That recommendation was accepted and negotiations began in July on an exclusive basis.

However, four months later, as the negotiating parties acknowledged their lack of progress in reaching a final agreement, the Divestment Committee recommended the termination of discussions with IndiGo and the resumption of contact with Caribbean Airlines.

Mr. Lalor's statement follows a request by the Jamaica Airline Pilots Association for Contractor General Greg Christie to investigate pertinent issues relating to the divestment of the national airline.

The pilots have among other things, questioned the expiration date of the divestment offer and whether the government was abiding by the rules of transparency and accountability in the disposal of public assets.

[X]

.. Tourism (and buddy passes) bankrupted Air J..

<span style="font-family: 'Verdana'">A sobering article in TT's Guardian written by the guy who ran BWIA (now CAL) ..
(in fairness to him, mi added the buddy passes part )

http://guardian.co.tt/business/business/2010/02/21/more-mortar-pestle

<span style="font-size: 14pt">More in mortar than pestle</span>
...merger has nothing to do with airline
Yvonne Baboolal
Published: 21 Feb 2010

Conrad Aleong
Yvonne Baboolal
There may be more in the mortar than the pestle as the Patrick Manning administration moves to buy over Jamaica’s debt-ridden national airline, Air Jamaica (AJ), says former BWIA chief executive officer, Conrad Aleong. Aleong, who declined to disclose more, only hinted, “The Government may have other “non-airline” reasons for wanting to buy AJ.” Advising that the Government should “stay clear of buying AJ or any share swap,” he further disclosed, “It was told to me by airline people that the Caribbean Airlines Ltd (CAL)/AJ merger has nothing to do with airline business. “The CAL board has made it quite clear that they want a commercial deal (rather than a buyover),” Aleong, who resigned from BWIA in 2004, told the Sunday Guardian at his Albrosco business at Belmont last week. Jamaica Prime Minister, Bruce Golding, has reported that negotiations for the purchase of AJ by T&amp;T’s CAL (formerly BWIA) are well advanced.

A non-binding letter of intent has been signed with a target date for completion by March 31. The move follows a rushed trip by Golding to T&amp;T on December 16, 2009 where he held talks with acting Prime Minister Dr Lenny Saith, Trade and Industry Minister Mariano Browne, and Foreign Affairs Minister Paula Gopee-Scoon, about financial arrangements for CAL and AJ. The cash-strapped Golding regime has been desperately trying to save the airline of Jamaica, where tourism is a major income earner. However, Aleong, who has had 29 years experience in the airline industry, much of it international, outlined reasons why it would be a bad move to buy AJ. He said the airline industry was still in deep trouble because of the global slowdown and the resulting decrease in business travellers. “A buy over is fraught with long-term risks. The bottom line for me is that the airline industry is still in deep trouble.

<span style="font-weight: bold">“Most countries are now getting rid of all their airlines. Italy &amp;#65279;got rid of Alitalia because they were losing too much money. “A Japanese airline just filed for bankruptcy. It’s related to the whole global slowdown. Business travellers are not flying frequently. </span>“We do not need to take on more challenges. Pursue certain routes which could add to CAL’s operations but stay clear of buying AJ or any share swap. “Take care of our own airline lest we lose focus and both go down. This is fraught with long term risk for our national treasury,” Aleong warned. “We don’t need two airlines. We already spent $2.3 billion to shut down one (BWIA) and start another (CAL). Now we’re chasing after a money losing one that never made a profit. “We have higher priorities for our money.”

Major financial burden
Buying AJ, even without debt, would not be a right move, Aleong said. “Jamaica wants tourism from AJ. <span style="font-weight: bold">For the last ten years AJ has been pushing a tourism strategy for the Jamaican government. “That’s why the airline is bankrupt. Tourism makes the airline lose money. </span><span style="font-weight: bold">It’s always trying to sell volumes of seats and they have to discount to sell. “AJ lost US$600 million in the last five years. If T&amp;T gets a tourism deal with Jamaica, we’re setting ourselves up for a major financial burden,” Aleong said. “Even if Jamaica writes off all its debts we would still end up with serious risk. “We would be stuck with their reservations systems and be committed to a hotel chain or big travel consortium for the next five years.</span> Further, there will be a need for start-up capital if CAL acquires AJ, Aleong said. “Who will fund the start up? The Government spent $735 million for CAL to start up. Maybe they will have to borrow money to do it. They certainly shouldn’t borrow money to buy an airline.”

Too much baggage
Carriers like AJ, with a history of financial losses and bankruptcy, would have too much baggage, Aleong said. He further explained: “Aircraft leases that may already exist may be very expensive to cancel, going into millions of dollars. “If you’re buying an airline, you will get leases to go with them. You need to investigate those leases.” Noting that AJ has six leased aircraft, Aleong added: “When you get a plane from a lessor, it is usually in pristine condition. “When you have to give back the aircraft, the lessor expects it in the same condition, or even better. “Since AJ suffered so many years of losses, the aircraft would not be in the kind of condition you can inexpensively return to the lessor.” “An engine overhaul, for instance, depending on the size of the engine, can cost up to US$2 to US$3 million.” The type of aircraft that AJ will be selling to CAL is also an important factor, Aleong said.

Public needs more info on deal
AJ has six leased Airbus airplanes—four of them A320s, one A319 and one A321. “We had discounted A320s because they can’t go non-stop to Toronto. They will have to land, unlike the 737, which can fly non-stop. “The Airbuses are okay for Kingston to Fort Lauderdale or New York. “It’s not the kind of airline CAL would like to get into. If the T&amp;T Government wants another airline, they will need a commercial fleet type of airplane. “The Airbus would not fit CAL’s network. You don’t want two sets of pilots flying two sets of planes. It involves two different kinds of technologies,” Aleong noted. He suggested that CAL, if it wants to expand, should go into the area of a common agreement. “For years, Air Canada flew Toronto to Kingston. CAL would be better doing a commercial deal rather than a financial deal.” Aleong advised: “The Government owes it to citizens to tell us a lot more about this deal. After all, it’s our money and our treasury which they are managing.”


END OF ARTICLE.

++++++++++++++++++++++++
COMMENTS
+++++++++++++++++++++
TOTALLY AGREE with this
Submitted by EagleEye on 21 February 2010 - 10:23am.
TOTALLY AGREE with this article. Thank you Conrad Aleong for coming forward.

Just to add:

1. The tourism market is really being won by discount charters. These firms lease or contract their own planes and form vacation packages of their own.

2. It's been stated numerous times: Barbados does well with Tourism, and they don't have an airline.

<span style="font-weight: bold">The only thing I can think is that they are aware of some big company that is looking to buy Air Jamaica, and then come in the market and undercut everyone, cause mayhem and then assume THE dominant role in the region. I can think of one company that would possibly do that... Virgin</span>.

Login or register to post comments Report this comment Mr Aleong Thank you for your
Submitted by asia on 21 February 2010 - 4:24pm.
Mr Aleong

Thank you for your article. I hope it prompts further reaction from the rising voice of the citizenry in face of an increasingly stifled state of governance in our country

BWIA (or its successor, CAL) has been a milking cow for those in charge: From Government to Foreign Management to Consultants (both foreign and local alike). Decisions are made and then get overturned as new Executives take over. New deals are struck, new contracts made and new (and sometimes the same old) pockets are lined.

Over the decades this has cost everyone: Taxpayers pay; Employees get blamed and lose their jobs; and the Airline is branded as being inefficient.

When the dust settles after this new deal (AJ/BWIA/CAL)is hammered out...I wonder who will be paying the long term cost...??

The answer might lie in the fact that that behind the commericial and/or financial nature of such transactions, there is an underlying political one that is not usually evident from the start.

That said, its is imperative that the Trinidad and Tobago public gets involved and have its say before its takes on a cost that it will certainly be unable to bear.

Login or register to post comments Report this comment williams says Right on
Submitted by williams on 22 February 2010 - 12:38am.
williams says Right on target Aleong!!!Manning just wants to be vindictive &amp; saddle the next government with huge deficits &amp; debts!!!
who cares-he'll be preaching or will be in Costa Rica &amp; Panama

Login or register to post comments Report this comment Very informative
Submitted by Astley Merton on 22 February 2010 - 11:47am.
Very informative commentary!

In these difficult times we trying to be Caribbean godfather still? No water, people loosing their jobs, we overtake Jamaica as the murder capital of the region as our rate continues to climb, poor people cannot even get a cataract operation in the hospital, poor people cannot get shelter, dey bussing property tax on you some people tax increase from $216.00 per year to $216.00 per month. Others increase of $ 216.00 per year to $ 480.00 per month. How are pensioners and those on fixed incomes going to pay this tax? The government feting in the Beyonce concert, building big mansions for themselves, some buying $ 4 million dollar apartments and driving $500,000 motor cars - no purchase tax or vat paid.

Now dey want to take poor people money to bailout Air Jamaica? They have already given CAL over US$ 40 million in fuel subsidy and now the Air Jamaica routes taken over by CAL will benefit from fuel subsidy also. Well when this is done the subsidy bill will double, it will only go down if the current fuel price declines below the subidised price. (A green donkey).

They really think people stupid?
+++++++++++++++++++++++++++++++++++</span>

[Peasie]

Re: .. Tourism (and buddy passes) bankrupted Air J..

Wonder how many buddy passes Butch handed out?

[RichD]

Re: .. Tourism (and buddy passes) bankrupted Air J..




mi nuh know why this mek me laff

[neutral]

Re: .. Tourism (and buddy passes) bankrupted Air J..

Well you just know only a jamaican airline wuld have a special pass fe yu buddy.

&quot;I,m sorry sir will need a special pass for that&quot;.

[Magician]

Re: .. Tourism (and buddy passes) bankrupted Air J..

And CAL will succeed once dem restric pass fi buddy?

[X]

Re: .. Tourism (and buddy passes) bankrupted Air J..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Magix</div><div class="ubbcode-body">And CAL will succeed once dem restric pass fi buddy?


</div></div>

yup.. too much &quot;Buddy&quot; (pass) screwed the Love Bird .
On the flip <span style="font-weight: bold">Virgin</span> Airlines seems to be pretty successfull.. I wonda whats their friendly pass system called

Jokes aside doe.. di article speakes volumes..

[twiney]

Re: .. Tourism (and buddy passes) bankrupted Air J..

I remember listening to a talk show a few years ago when mi couldnt sleep at nite and this employee talk bout how superclubs basically raped airjamaica with the sale of vacation packages. So sad that the air line has suffered because it has been taken advantage of by &quot;Jamaicans&quot;

[X]

Re: .. Tourism (and buddy passes) bankrupted Air J..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Twiney</div><div class="ubbcode-body">I remember listening to a talk show a few years ago when mi couldnt sleep at nite and this employee talk bout how superclubs basically raped airjamaica with the sale of vacation packages. So sad that the air line has suffered because it has been taken advantage of by <span style="font-weight: bold">&quot;Jamaicans&quot; </span></div></div>

exactly...

This Bird's chickens are comming home to roost.

[Dyoll_73]

Re: .. Tourism (and buddy passes) bankrupted Air J..

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Hivil_Breedjhu</div><div class="ubbcode-body">

yup.. too much &quot;Buddy&quot; (pass) screwed the Love Bird .
On the flip <span style="font-weight: bold">Virgin</span> Airlines seems to be pretty successfull.. I wonda whats their friendly pass system called </div></div>

I think it's rather <span style="text-decoration: line-through"><span style="font-weight: bold">bushy</span></span> unclear at this time.

The writer said the proposed merger had nothing to do with the airline, but he/she didn't say what.