Jamaica PM courts Caribbean Airlines for Air Jamaica sale

Washington DC
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Jamaican officials are targeting the state-owned flag carrier of Trinidad and Tobago, Caribbean Airlines, as a potential buyer for Air Jamaica as negotiators failed to reach an agreement with US investment firms Indigo Partners and Oaktree Capital.

Jamaican Prime Minister Bruce Golding has begun talks with Trinidad and Tobago Prime Minister Patrick Manning about Caribbean potentially purchasing the Jamaican state-owned carrier.

Golding said in the Jamaican government's online Jamaica Information Service (JIS) in December that he hopes a Caribbean purchase of Air Jamaica would "preserve and protect" Jamaica's interest as a tourist destination while also maintaining air service for the country's visiting friends and relatives (VFR).

"I am satisfied based on the assurances given that is possible," he says.

Air Jamaica CEO Bruce Nobles says of the discussions, "As a result of their positive response we have been providing updated due diligence information."

However, Dennis Lalor, chair of the Air Jamaica Divestment Committee, declined to comment.

While Caribbean was not immediately available for comment, Caribbean CEO Ian Brunton said in October 2009 that though he foresees no immediate changes to the carrier's present strategy, Caribbean is constantly seeking consolidation and growth opportunities.

Referencing 2009 media reports that Caribbean had reportedly submitted a bid for Air Jamaica, Brunton says, "Had this gone through, it would have grown our operations significantly."

As the Jamaican government attempts to re-privatise Air Jamaica, the government also aims to divest Kingston's Norman Manley International airport.

The government formed a divestment team for the Kingston facility last month, and Golding says the privatisation of Montego Bay's Sangster International airport will serve as a model for the sale of Kingston.

In 2003, the government granted MBJ Airports Limited, a consortium of international companies including Canada's YVR Airport Services, a 30-year concession agreement to operate and manage Sangster International airport.

The Jamaican government has been trying to privatise Air Jamaica since 2008. International Finance Corporation was selected to handle the latest transaction, and the Jamaican government said it intended to retain a 20% stake in Air Jamaica.