If Air J is sold to CAL, retain the brand
Dear Editor,
I have noted once again the discussions among Jamaicans about the government selling shares in Air Jamaica to the public instead of selling it and losing the name, or closing it down by June as mandated in the Letter of Intent sent to the IMF.
The people calling for the government to sell shares clearly have not done their homework as an IPO would require listing on a capital market that could absorb such an issue, such as the London Stock Exchange or the New York Stock Exchange.
This was an option in 2008 and 2009 but now that the IMF is calling the shots, it is quite obvious that a sale or a liquidation by June are the only options. One option I had considered was leasing the airline to an operator like Virgin, similarly to how the Donald Sangster International Airport is leased and managed by a private entity for profit. I doubt that this option is possible now either and Jamaicans must then do the following:
An offer was made for Air Jamaica and unlike the stadium in Trelawny, the government has not acknowledged the proposal nor has it provided a reason for denying the bid to the public that they work for. We as Jamaicans need to know the reasoning behind ignoring the pilots’ bid.
Any buyer of Air Jamaica must recapitalise the company to the tune of some US$150 million at a minimum, and the pilots claim that they have the private equity firms lined up with the necessary capital. They also claim that their deal would save the government having to pay out some US$50 million in redundancy (I assume the purchase would be structured as some kind of ESOP – employee stock ownership plan). Has any of this been verified?
If Caribbean Airlines (CAL) is really the best offer, then it should be easy to prove that. If the pilots were to buy the airline, they would be able to list a small portion of shares on the Jamaica Stock Exchange since that issuance would be much smaller and now Jamaicans would be able to finally own a piece of Air Jamaica.
If it is sold to Caribbean Airlines, the government should retain the brand because it has value and can be used for other things in the future (an airline may want to begin operating from Jamaica and be willing to lease or purchase the brand name).
Transparency is what was promised and I look forward to our leaders sticking to this particular promise.
David Mullings
david.mullings@gmail.com
