Sale of Air Jamaica

The proposed sale of Air Jamaica to Caribbean Airlines continues to be in the headlines. This is a highly charged topic which is very sensitive to all Jamaicans.  Air Jamaica has been serving the country since 1969 and thus most Jamaicans have grown up knowing Air Jamaica.  Just about everyone has traveled on or knows someone who has traveled on Air Jamaica.  There are many who would like to see the airline remain in the hands of Jamaicans.  There are many who are opposed to yet another Jamaican company being sold to our Caribbean neighbour Trinidad and Tobago.  Jamaica was always seen as the jewel of the Caribbean and now has to be taking second place to our smaller cousin Trinidad.

Putting aside our sentiments the question remains “should the government sell Air Jamaica?” The government says that we have no choice but to sell the airline, that currently it is losing US$100 million each year.  Given our dire financial problems it is no doubt true that we can not afford to subsidise the airline to this extent.  The International Monetary Fund (IMF) agrees and has mandated the government to divest itself of the airline.  It would seem that there is no option but to either sell the airline or to significantly reduce the subsidy to the airline.

In deciding whether to sell the airline one needs to consider another other questions.  At the time of the proposed offer for sale in March 2009, Air Jamaica was responsible for bringing 31 per cent of all visitors to Jamaica.  Let us say that it has reduced to say 25 per cent at the current time.  The question now would be “can we afford to lose a quarter of all our visitors?”  The obvious answer is no, so how do we address the sale of Air Jamaica.  If the airline is sold we need to ask these questions :

1.    How do we get other airlines to take up the slack?
2.    How much will we have to pay them to provide the seats?
3.    What will happen to the price of tickets?
4.    What will happen if other airlines withdraw their services?

It is clear that this is not an easy decision to make so I encourage you to look at all the issues.