Air Jamaica seeks more from gov’t
THE national airline, Air Jamaica, yesterday failed to get Cabinet’s approval for a new business plan it submitted for approval, but the proposal was referred to a sub-committee of ministers.
Although no details of the plan or the Cabinet’s response were revealed, newly installed minister of information and development Donald Buchanan admitted that it included options to deal with the airline’s precarious debt.
Air Jamaica’s losses for 2006 were estimated at US$85 million at the end of June. However, there has been no official confirmation of the figure and no further report on losses. Sources within the airline, who spoke with the Observer earlier this year, said that for 2005 the company lost US$136 million, US$46 million more than was projected by former chairman Dr Vin Lawrence. This led to a reduction in value-added services, including regular meals on flights, costing the airline its attractiveness to some Jamaican travellers.
This year, Air Jamaica is projected to lose a total of US$175 million, raising concerns about whether the Government should continue to fund its gargantuan appetite for funds.
Speaking to the media yesterday at his first post-Cabinet press briefing at Jamaica House, Buchanan said that after extensive deliberations on the plan, submitted by Air Jamaica’s chairman O K Melhado and CEO Michael Conway, the Cabinet referred them to its standing sub-committee which monitors the airline.
The situation has led to the postponement of next Monday’s weekly Cabinet meeting to Wednesday, as the standing sub-committee, chaired by minister of finance and planning, Dr Omar Davies, and which also includes minister of transport Robert Pickersgill, will meet with the airline’s management on Monday to review the plan.
Buchanan said that at the end of yesterday’s discussions, the Cabinet was in no position to take any decision regarding the request from the Air Jamaica team.
“Therefore, we decided that the standing Cabinet sub-committee should have further meetings with the Air Jamaica team on Monday of next week and then, on Wednesday of next week, the Cabinet will receive a report from the standing committee and, at that time, we hope to make the necessary decisions as to the way forward with Air Jamaica,” Buchanan told reporters.
He said that after reviewing the plan against the background of the airline’s current financial situation, including its debts, the Cabinet felt that there was a need for “additional and better particulars” about the plan.
But when he was asked what was the cost of the proposed plan, the minister would only say that it provided various options.
“You could say that the plan provides for various options about how you go forward, and they are coming to the table with a long-term debt factor that is out there, and certainly they will be putting proposals forward as to how you address this. But, as I said before, there are options,” the minister said.
However, Buchanan refused to give any details of the plan or what was discussed. He said that after next Wednesday’s Cabinet meeting he would have another briefing, at which time he would reveal the details as well as the Cabinet’s response.
“Anything more that I say now will be premature,” said the information minister.