Air Jamaica, the 40-year-old, debt-ridden, state-owned airline, will go private once again, as it did for 10 years beginning in 1994.
The government of Jamaica announced plans to divest itself of all financial holdings in Air Jamaica by March, thanks to a grant of $820,000 from the U.S. Trade and Development Agency.
The funds will be used to assist with technical services and aid in the privatization process, according to Audley Shaw, Jamaica's minister of finance and public service.
With an additional $825,000 grant from the International Finance Corp., the Jamaican government contracted with GRA Inc., an aviation consulting and advisory firm.
This month GRA will submit its report to the government, addressing short-term fixes to improve operations, reorganization of the company and management support needed during the privatization effort.
In the end, the divestment announcement came as no surprise. Prime Minister Bruce Golding had publicly identified the troubled carrier as "a drag on our national budget."
Golding also said that Air Jamaica had lost an average of $100 million per year since 2004, when the government took over the carrier after 10 years of partial privatization. During that time, the government held 25% of the airline, employees retained 5% and investors controlled the rest.
The government seeks to transfer ownership and full management control of Air Jamaica to the private sector but has specified that Air Jamaica be structurally or contractually linked to an experienced global carrier.
"We are emotional about Air Jamaica, but it still takes cash to care," said Shaw. "In the end, it came down to whether we as a government allowed the airline to continue to hemorrhage and eventually close or took strong action now to save the airline and make it a viable entity for the country."
The Air Jamaica brand, considered a national symbol by many Jamaicans, will likely be retained, according to Shaw.
In the last two years, several Caribbean carriers have disappeared.
Last year the 66-year-old BWIA morphed into Caribbean Airlines as the national carrier of Trinidad and Tobago. At the same time, Caribbean Star was absorbed by LIAT.
To contact reporter Gay Nagle Myers, send e-mail to [email protected].