Caribbean Airlines takes over Air Jamaica

Trinidad-owned Caribbean Airlines will from tomorrow take over operations of cash-strapped Air Jamaica in a deal which CAL chairman Arthur Lok Jack said would increase the airline’s revenue by more than 60 percent setting it on the road to greater profitability.

The announcement was made yesterday at the Carlton Savannah, St Ann’s.

Finalisation of the agreement in Kingston yesterday comes after months of, at times, “tense negotiations” to hammer out a deal acceptable to both parties. It will see the Jamaican government owning 16 percent of Caribbean Airlines, with the government of Trinidad and Tobago owning the remaining 84 percent.

A transition period of six months has been allowed for a seamless transfer of operations. The transition will see a major schedule change for current Air Jamaica flights during which time CAL will utilise Air Jamaica’s fleet, regulatory authorisations and its ‘JM’code.

Chairman Lok Jack insisted that neither CAL nor the TT Government would be assuming any of Air Jamaica’s legacy debts and explained that the US$50 million recently approved by the Manning Cabinet for the deal was new equity for Caribbean Airlines to fund working capital, which is needed to facilitate the expansion.

He added that the anticipated return on the US$50 million was somewhere in the region of US$12 to US$ 15 million per year based on current levels of operation. Lok Jack also explained that tickets which had already been purchased by passengers for Air Jamaica flights after Saturday would be honoured by Caribbean Airlines, the cost of which would be later reimbursed by the Jamaica government.

Caribbean Airlines would also assume responsibility for Air Jamaica’s Frequent Flyer programme.

It was also disclosed that CAL will utilise the services of close to 900 Jamaican workers needed to run the Jamaican leg of the network which will consist of eight routes: Kingston-Fort Lauderdale; Kingston-New York; Kingston-Toronto; Montego-Fort Lauderdale; Montego Bay- New York; Montego Bay- Philadelphia; Kingston-Grand Cayman and Kingston Nassau.