EDITORIAL - Transparency and that Air Jamaica deal

Published: Wednesday | July 8, 2009


We understand, as Mr Dennis Lalor has lectured, that, at times, there is need for confidentiality in negotiation and his admonition against doing anything that might "derail" the sale of Air Jamaica.

That sale, we assume, is to the US private equity firms, Indigo Partners and Oaktree Capital, who are said to be the owners of the low-budget carrier, Spirit Airlines, which flies to Jamaica.

But as Mr Lalor, who has led the effort to privatise Air Jamaica, is well aware, Air Jamaica is not a private company with its assets held by private individuals whose capital is at risk. Air Jamaica is owned by the Jamaican state, which means the taxpayers of the country, who pay dearly for its existence.

Indeed, over the past decade Air Jamaica has lost over US$1 billion and the company has debts of around US$500 million, most, if not all, of which will have to embraced by the Jamaican Government - in other words, taxpayers.

So, while the Jamaican taxpayers, as the Golding administration has made clear, can no longer afford the burden of Air Jamaica's annual loss of nearly US$150 million, and will want to extricate themselves from this stranglehold, they, we believe, have a right to know what is being done in their name. It is called transparency - the failure of which too often accompanies public sector transactions, not least the management of Air Jamaica.

In that regard, if the owners of Spirit Airlines have emerged as the preferred bidder for Air Jamaica and an agreement for the carrier's sale is about to be sealed, it can't be too much for the Jamaican people to know about it. That, we believe, is a matter in which the Jamaican public have a legitimate interest and on which there ought to be balanced and informed comment. It is an uninformed public that is more likely to engage in the kind of illogical debate that will undermine a "critical transaction for and on behalf of the people of Jamaica".

And that, unfortunately, has been the approach to the divestment of Air Jamaica. Until this newspaper's report, few had knowledge of who bid for Air Jamaica and/or the criteria for sale, as advanced by the Jamaican Government. What, for instance, were the strategic interests identified by Jamaica, including the expected relationship between what emerges post-Air Jamaica and the island's tourism business, or for that matter, the sale in the context of a regional air-transport policy.

Delicate stage

We are unaware of what may have separated Spirit's bid from that of Carib Airways, the carrier controlled primarily by the Trinidad and Tobago government, and what model of ownership either of the identified bidders, or others, placed on the table.

Of course, the negotiations may now be at a "delicate stage", no one expects that all two and half million of us will be seated at the conference table. But it can't be expecting too much for the people to be told the basis on which their assets are to be sold and what is in it for them.

And that, in part, is what newspapers do in the unwritten compact with the communities they serve, to be watchdogs of governance.

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