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Air Jamaica To Be Taken Over By Caribbean Airlines

By Mike Mitchell

March 5, 2010 - The government of Jamaica has approved the sale of Air Jamaica to Caribbean Airlines of Trinidad and Tobago with an effective date of April 12, 2010. Both companies will work together to provide a seamless transition into a Caribbean Airlines operation.

Caribbean Airlines will acquire the airline's fleet, route rights and will open a new hub at Kingston's Norman Manley International Airport. The acquisition will make Caribbean Airlines the largest airline in the Caribbean.

Air Jamaica President and Chief Executive Officer (CEO) Bruce R Nobles, stated in a memo to employees the transition team from Caribbean Airlines has begun reviewing employee files, company policies, conducted personnel interviews and a new company will be formed to hire personnel required.

In 1994, Air Jamaica was partially privatized, with the government of Jamaica holding 25% and the employees owning 5%. In December 2004, after financial losses, the Government of Jamaica took back full ownership of Air Jamaica and in September 2007, the Jamaican government began to consider privatization of Air Jamaica. Investors with interest in the airline were China National Aviation Holding Company, Delta Air Lines, Virgin Atlantic, Iberia Airlines, Emirates Airlines and the employees of Air Jamaica.

"The current transition proposal is to continue to operate Air Jamaica utilizing our existing fleet under contract to Caribbean Airlines for perhaps as long as one year. Caribbean Airlines will be financially responsible for the transition operation after the transaction date. In order to operate the 'transition' Jamaican operation, a new company will be formed to hire the personnel required. Those employees will be hired under fixed-term contracts. The number of jobs required and the terms and conditions of employment are still being finalized," stated Chief Executive Officer, Bruce R Nobles to a letter to the employees.

The Air Jamaica?s maintenance department will be retained by the Jamaican Government. "It is my understanding that the maintenance unit is not a part of the current negotiations, the operation is being looked at as a separate entity and I would not be able to give any more information than that because it is a continuous exercise which is being re-examined and looked at? said Transport Minister Mike Henry.

Caribbean Airlines had filed a request with the United States seeking a waiver under the Open Skies Agreement. The airline is requesting to be exempted from the section that that requires a member airline to be substantially owned and operated by the member county.

The Jamaican Airline Pilots Association (JALPA) had made numerous attempts to take over the airline. JALPA had stated under there leadership the ailing flag carrier would be made profitable within two years if they were able to acquire the airline. JALPA and Air Jamaica Staff Acquisition Group (AJSAG) have objected to the US granting Caribbean Airlines an exemption under the Open Skies Agreement and also objects to the notion of designation of Caribbean Airlines as the exclusive national carrier of Jamaica.

?JALPA is aware of the Government of Jamaica?s perseverance to close the airline in the shortest possible time culminating in the announcement, by the airline?s CEO, on March 3 of April 12, 2010 as the target date for closure. Our concerns are many, not the least of which is the introduction of a new plan of action which departs from the norm and is an apparent attempt to circumvent anticipated problems with Jamaica USA bilateral agreements.

?The plan as outlined will not address the continued lack of transparency of Air Jamaica?s Divestment Committee whose actions continue to place a heavy burden on the shoulders of all employees. We expect that their plan will be in accordance with Jamaican Labour Laws and that employees will receive their severance payments in full on the date of closure. JALPA is not deterred by this announcement and continues steadfastly in its quest to operate an airline owned by Jamaicans? indicated in a JALPA press release.

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