Air Jamaica to Complete Privatization, Sale in June 2009

Negotiations for the privatization of Air Jamaica are progressing well and the entire process is expected to be completed by end of June 2009, according to Sen. Don Wehby, Minister (without portfolio) in the Ministry of Finance, who has responsibility for the airline.

Wehby said that, while the projected March 31 timeline for the privatization could not be met, “significant progress has been made in the privatization effort.” The Minister has a meeting scheduled for Mid-April with an international airline group from which the Privatization Committee has already received an indicative offer for Air Jamaica. “We anticipate that we will be able to advance the negotiating process quite substantially at that meeting,” he said.

Soon after its decision last year to privatize the national airline, the Government of Jamaica appointed International Finance Corporation (IFC) –the private sector arm of the World Bank Group- to serve as lead advisors on the project because of their experience in airline transactions.

Shortly thereafter, Jamaica appointed a Privatization Committee, chaired by the Hon. Dennis Lalor, to work with the IFC, to advise the government on the privatization and make a recommendation on a way forward.

Wehby reiterated that a major imperative of the privatization effort is to ease the burden on the national budget of the more than $150 million (J$13.2 billion) per annum that the airline was losing and which will ultimately be the responsibility of the government. Air Jamaica currently has loans outstanding of over $600 million.