Right On Air Jamaica

The United States Embassy in Kingston had issued a dire warning that the then national airline faced the risk of being grounded under the People's National Party (PNP) Government because it lacked the political will to divest the Love Bird.

Against that background, Prime Minister Bruce Golding won the admiration of the United States government for his decision to divest the loss-making national airline, Air Jamaica.

"The Government of Jamaica simply does not grasp the dire predicament faced by Air Jamaica. The carrier literally could cease operations at any time, much like the situation with Swissair in 2001," the Americans warned in a cable dated December 2006 and titled 'Air Jamaica: Reports of my demise are not exaggerated' while the Government was led by Portia Simpson Miller.

"A cocktail of enormous and growing debt, a lack of political will to make painful and expensive choices, pervasive corruption among the business and political classes and the possibility of a low-cost carrier coming to Jamaica and forcing the state-run carrier out, all point to an impending collapse," the cable added.

Lacked political will

The Americans had long believed that the country should get rid of the airline which was costing taxpayers billions of dollars each year, but believed successive governments lacked the political will to make the necessary move until Golding took charge of the country's affairs.

In a number of diplomatic cables from the United States Embassy in Kingston to Washington, the sale of Air Jamaica was proposed but the Americans were unsure if it would ever be done because of the potential political fallout and the sentimental value of the airline to Jamaicans.

The embassy alleged that a former CEO had warned that the airline "could literally sink at any minute", as he noted that Air Jamaica had lost US$700 million between 1994 and 2004.

According to the cable, the CEO had presented a rescue plan to the Simpson Miller administration but it was rejected due to cost considerations.

"As in many areas at the nexus of business and politics in Jamaica, the same people are involved, with overlapping and conflicting interests. The result is a belief that the worst could never happen and if it does, the Government of Jamaica will come to the rescue," the cable said.

Satisfied with commitment

With the 2007 election victory by the Golding-led Jamaica Labour Party, the embassy expressed satisfaction with his commitment to sell the airline.

It noted shortly after Golding was sworn in that the US Trade and Development Agency had provided Jamaica with a US$820,000 grant to finance the technical services necessary to divest the airline.

"Air Jamaica is seen as a national symbol of pride by many Jamaicans, its sale to private investors thus is politically risky for the Jamaica Labour Party-led government," a May 2008 cable noted as it pointed to the Government's plan to divest the airline by March 2009.

"The fact that the Government of Jamaica is willing to move swiftly in the divestment process and address the fiscal challenges of Air Jamaica directly is the clearest indication yet that the Government of Jamaica is committed to ridding the country of loss-making entities which will improve the financial situation for the debt-strapped country," the cable added.

Questioned commitment

But as the negotiations for the sale dragged into late 2009, the US started to question the commitment of Golding and noted what it said were conflicting statements from members of his Cabinet.

" … The inability (of the Cabinet) to get on message to ditch Air Jamaicais nothing short of mystifying," a November 2009 cable said.

"Despite PM Golding's personal interest in finalising this sale, he has not been able to keep his party on message, including his own information minister," said the cable.

"It will be a major political success for PM Golding if he can see this deal through, as well as a major benefit to the Government of Jamaica's bottom line," added the cable.

The Golding administration finally inked a deal to sell the airline to theTrinidad and Tobago-based Caribbean Airlines in April 2010 with the sale completed last month.

Under the deal, Jamaica has retained a 16 per cent stake in the airline while absorbing the debts which it had racked up over the years.