Golding

Prime Minister Bruce Golding has warned that the government will have to embrace Air Jamaica's more than US$1 billion debt if it finds a buyer for the troubled carrier.

Jamaica hopes to rid itself of the loss-maker by March 2009, which, at last report, had accumulated losses of US$1.2 billion (J$86 billion).

Golding, speaking at the launch of National Export Week Monday night, also forecast that Air Jamaica will this year lose more than the US$170 million it bled in 2007, but did not give a definitive projection.

"Cabinet took some decisions this morning to strengthen the approach towards ensuring that we can privatise the airline by March 31 of next year," said Golding. "These are going to be an enormous amount of losses that we are going to have to absorb - over US$ 1 billion."

The near 40-year-old Jamaican carrier returned to government ownership three-and-half years ago after a decade of private sector control by the Gordon 'Butch' Stewart-led AJAG Group.

However, the state-manages have been unable the staunch the losses, and the nine-month-old Golding administration is keen to find partners to take over the carrier.

Divestment plan

In getting help from the World Bank subsidiary, the International Finance Corporation, is putting together a divestment plan and has said that some Asian carriers have shown interest.

Air Jamaica is on the bloc at a difficult period of the world's airlines, when rising fuel prices and a global economic slow-down have undermined profitability.

It was against that backdrop that Jamaica House, the Prime Minister's Office, quoted Golding as telling private sector leaders that the carrier's losses "could increase further this year".

The Government has put aside roughly US$30 million in its annual budget as a direct subsidy for Air Jamaica, but the carrier's more than US$500 million is part of the country's contingent liability.

Committed to privatisationm

However, Golding said to the business people at Monday night's function, that government under-stood the importance of Air Jamaica to the country's tourism and the national passion for the airline.

The government, however, could not continue to sustain its losses.

It was in that context that he stressed the administration's commitment to ensure the privatisation of Air Jamaica by the end of the current financial year.

business@gleanerjm.com