JAMAICA: Union against sale of Air Jamaica to Trinidadian entity"I can't believe that the government would spend J$28 billion (US316.9 million) to give away one of our best assets," Morrison said.KINGSTON, Jamaica, CMC – The powerful National Workers Union (NWU) on Monday said it is against the sale of the cash-strapped national airline, Air Jamaica, to the Trinidad-based Caribbean Airlines (CAL).
NWU president, Vincent Morrison, told the Jamaica Observer newspaper that
his union believes the airline should be kept in local hands and that the 1,900 workers are more than equipped to run the airline that racked up huge losses over the last four decades.“I can’t believe that the government would spend J$28 billion (US316.9 million) to give away one of our best assets,” Morrison said.
Last week, the airline’s chief executive officer, Bruce Nobles, told workers that the deal with CAL may be signed soon.
In a memorandum to staff, he said bidders for Air Jamaica were narrowed down to two finalists – one being Indigo Partners, the owners of several airlines, including Spirit airlines; and the other, Caribbean Airlines, owned by government of Trinidad and Tobago.
Nobles stated that Air Jamaica’s divestment committee initially recommended that an agreement be reached with Indigo partners but informed that after several months of negotiations, the two sides were unable to reach an agreement. The government then turned to Caribbean Airlines.
The Bruce Golding administration has not confirmed that a deal has been reached with CA, but the Prime Minister has said that the government hopes to conclude an agreement soon.
Jamaica is seeking to borrow US$1.25 billion from the International Monetary Fund (IMF) under the agency’s Standby Arrangement for balance of payment support, and among the conditions is the divestment of loss-resulting entities like Air Jamaica, for budget relief.
“We are going to communicate with the government both in writing and hopefully in a meeting to know the status of the discussions with Caribbean Airlines,” said Morrison, whose trade union represents some of the workers at Air Jamaica.
“We hope to convince the Government that selling out to Caribbean Airlines is not the best,” Morrison told the newspaper.
The NWU’s strategy is have the government write off the debt, which is estimated to reach US$1.4 billion, by the end of the fiscal year in March, something which, according to Morrison, would be offered to Caribbean Airlines.
The airline would be run under the Employee Share Ownership Plan (ESOP), a sophisticated stock ownership, which would see 100 per cent ownership falling into the hands of workers.
“The workers are saying to the government: put the legacy into a fund from which the workers would be prepared to use their redundancy payments to run the airline. We would also be looking to float an IPO (Initial Public Offer) to involve Jamaicans at home and in the Diaspora, where we ask Jamaicans abroad to invest. Apart from getting a Paul Getty or someone with big money, that’s how you have to go,” Morrison said.
He added that Caribbean Airlines “does not have the capability, logistically and operationally” to deal with running Air Jamaica.
“If Air Jamaica is taken over by Caribbean Airlines, you could see a tremendous fallout in the Jamaican economy. Air Jamaica contributes J$6 billion (US$67.9 million) to the economy…Getting rid of 1,900 Air Jamaica employees would also indirectly affect the jobs of a further 10,000, plus there are other issues involved,” Morrison said.
Members of the Jamaica Airline Pilots Association have also proposed that the government use a portion of the funds being set aside for redundancy to recapitalise the airline and put it in a position to live on its own.
Morrison is firm in his view that if the workers are allowed to run the entity as their own, there would be a turnaround in its economic fortunes.
“Air Jamaica has never been properly capitalised since its inception. The workers over the years have made sacrifices. Some have worked for five years and more, without salary increases.
“Some have given back to the airline, in terms of salary cuts, so the commitment and love for the airline are there. The redundancy money could be used to recapitalise the airline.
“The brand Air Jamaica is golden. That would be gone if Caribbean Airlines takes over. The Air Jamaica brand is like Usain Bolt in terms of quality and this country should not give that up,” Morrison told the Observer newspaper.
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