FORMER boss of insurance giant, Life of Jamaica, Dennis Lalor who currently heads the Insurance Company of the West Indies (ICWI) has done a fantastic job of ensuring that the divestment of the national carrier Air Jamaica went smoothly while at the same day overseeing the day-to-day operations of the airline.

He brought considerable acumen and managerial experience to the task and has won the respect and gratitude of Government and the private sector alike. Below is his address at the launch of the new Caribbean Airlines, which took place at the Jamaica Pegasus Hotel:

When in the winter of 2007 then Minister of State Don Wehby, in a telephone call advised me that he wished me to join the board of Air Jamaica, not knowing anything about airlines except the cost of travel, I enquired of him what was entailed — the line went dead so I presumed that my question did not inspire confidence so he decided to discontinue the dialogue.

To my surprise, toward the end of 2007, he again called reminding me of the conversation and repeating his wish, which, recognising my limitations, he quickly followed up by saying that my main role was to chair a team to divest the airline, to do which board membership was required.

The expected date for the completion of the divestment project was March 31, 2009. Market, technical, legal and financial due diligence, were conducted and although the importance of Air Jamaica as the largest airline domiciled in Jamaica, accounting for approximately 50 per cent or 1.5 million passengers of the air traffic to and from Jamaica, was stressed and despite its significant assets, financial analysis indicated that in the current business model, the stand-alone airline, competing with much larger airlines enjoying a much lower cost base, was structurally not profitable in the long run.

From the findings, the privatisation

committee acknowledged that the true value of Air Jamaica related to the benefits it brought to the Jamaican economy as Jamaica’s national airline. Ensuring the long-term sustainability of a Jamaican national carrier as part of the country’s tourism and communications infrastructure, was therefore at the heart of the objectives pursued by the privatisation committee.

After considering all of the scenarios or options for the future of Air Jamaica, the committee decided that privatisation to an investor who would “integrate” Air Jamaica with another airline business, was the most advantageous for Air Jamaica, the government of Jamaica and the people of Jamaica.

The privatisation committee chose to design and implement a flexible private auction process and while we clearly described the initial position of the Government in terms of structure and commitments in an information memorandum, we remained open for alternative proposals, including management contract approach, as we were aware that the different potential investors would be motivated by diverging interests and in the spirit of maximising the competition for the transaction and its likelyhood of success.

Consistently ensuring the transparency of our objectives and our activity through local and international media, negotiations with investors took place under the mutual obligation of confidentially of the expressions of interest received.

The Privatisation Committee, in a process of separating prospects from suspects, selected seven companies, five of which fulfilled our requirement to send information on their relative financial strength and aviation expertise as well as signing a non-disclosure agreement. Included among those selected was Caribbean Airlines.

Political sensitivities and emotional considerations were obviously involved in the Privatisation Project as in any other such project and we took them into account during the project’s implementation. However, we firmly believed that the final selection of a partner and their proposal should only be based on objective criteria which could be easily understood by all stakeholders. We were always aware that the credibility of the entire process and the reputation of the Government of Jamaica were at stake.

A further narrowing down of the interested parties left us with two and following a pre-determinded evaluation approach — a weighted scoring system which combined the merits of flexibility with the inconvenience of complexity while recognising that there is also an inherent subjectivity in assessing scores, although we attempted to base the scores on objectivity and quantitative factors as far as was possible.

The result of our evaluation was that both parties, although reflecting different strengths and weaknesses, were considered as qualified to become partners of the Government and in the event, due to a lack of projected financial information the committee’s initial nod was given to a United States-based carrier, in our recommendation to the Government.

Contact was however maintained with Caribbean Airlines through its chairman and when it became clear that the recommended organisation’s intentions were unlikely to be in concert with Jamaica’s expectations, negotiations with them were discontinued. The result is that which is being celebrated here, the launch of a United Airline of the Caribbean.

The divestment team is proud to have been able to conclude the agreement with the Government of Trinidad & Tobago and on the team ‘s behalf, I wish to thank former chairman Arthur Lok Jack and his board for their contribution to our joint effort and to welcome chairman George Nicholas and his team.

Finally, on a purely personally note, it makes no sense to me that in our region, attendance for a three-hour meeting in Jamaica by a Trinidadian or vice versa requires three days, while a similar trip to London takes only two and I am convinced that what we are witnessing here is that this union between Caribbean Airlines and Air Jamaica will not only make travel between the islands much easier but in so doing achieve that which previous attempts, West Indies Federation, Caricom and the West Indies Cricket Board have so far failed to achieve.