CAL-Air Jamaica deal sealed

PORT OF SPAIN, Trinidad, Friday May 27, 2011 – Just over a year after Caribbean Airlines (CAL) acquired Air Jamaica’s fleet and route rights, the merger of the two airlines is finally complete.

The deal was consummated yesterday afternoon with the signing of the shareholders agreement in the twin-island republic by Jamaica’s Finance Minister Audley Shaw and his Trinidad counterpart, Winston Dookeran, giving the Jamaica Government 16 percent shares in CAL.

The finalization of the deal gives CAL legal access to all routes operated by Air Jamaica, and also results in CAL becoming the national carrier of Jamaica.

Outgoing Chairman of the Board of Governors of Air Jamaica, Dennis Lalor, is to be appointed to the Board of CAL, under the agreement which gives the Jamaica Government the right to appoint a director.

Shaw said it was a “Red letter day for Jamaica, Trinidad and Tobago and the Caribbean as it signals a concrete example of economic integration”.

“It is my hope that this will inspire other such fine examples,” he said.

The Finance Minister added that the merger would create a larger product which will “build capacity and critical mass” and allow for the increased viability and profitability of this new regional carrier.

On the question of job losses as a result of the merger, Shaw said there was no cause for alarm on the Air Jamaica side as staff cuts would have already taken place in the first few months of turning over to CAL.

Dookeran, meantime, said the merger would make way for the expansion of CAL.

And Trinidad and Tobago's Prime Minister Kamla Persad-Bissessar, who was also at the signing ceremony, said the development also put CAL on course to accomplish one of its goals - to have one reigonal airline.

"I know that Caribbean Airlines does have the vision for one Caribbean airline, and this is a step in that right direction," she said.

CAL acquired Air Jamaica on May 1, 2010 after the Jamaica government took a decision to divest the national carrier. At that time, the airline was given a 12-month transition period to integrate Air Jamaica into its operations, with the choice of opting out of the deal without penalty.

The deadline for completion of the deal to be signed had been set for April 30 but several delays pushed it back.

The acquisition makes CAL the largest airline in the Caribbean.