CAL-Air Jamaica deal in danger
Published:Friday | December 24, 2010 | 12:00 AM
Janet Silvera, Senior Gleaner Writer
WESTERN BUREAU:
Embattled former CEO of Caribbean Airlines Limited (CAL), Captain Ian Brunton, who negotiated the Air Jamaica deal from which the Trinidadian government can walk away from up to April 30, 2011, reportedly recommended that they do exactly that.
The CAL board of directors, in a press release issued December 12, raised the possibility that the airline might not proceed with its acquisition of Air Jamaica.
The board confirmed that on November 11, the former CEO of the airline suggested to the board "that it should not complete the Air Jamaica transaction, which the previous government of Trinidad and Tobago agreed to on May 1, 2010 and which this administration, after its due diligence, agreed to complete".
Under the deal, the Jamaican Government owns a 16 per cent stake in the airline.
CAL's plans were to take over the profitable routes of Air Jamaica, but that seemed not to have gone as planned, as the airline has reported losses in the last six months.
"My belief is that Air Jamaica has been continuing to record losses. Even with the CAL fuel subsidy (based on a US$1.50 per gallon price to CAL: current price US$2.50), they are substantial and could become significant in what will be a political debate in Trinidad and Tobago if the current impasse between the Minister of Transport Jack Warner and the board continues," a source with close ties to the airline told The Gleaner.