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LETTER OF THE DAY: The case for selling Air Jamaica in 2008
published: Friday | November 23, 2007

The Editor, Sir:

The Jamaica Labour Party (JLP) made it quite clear that they were interested in ridding the country of this 'burden' that uses up as much as 10 per cent of our GDP to maintain. Over the past decade, Air Jamaica has accumulated a deficit of over US$1 billion and, according to a 2006 Gleaner article, the IMF was suggesting we shut it down (as well as the sugar industry) because it would free up funds for other things.

The JLP wants to privatise it again - sell it off to someone who can then deal with it - which I agree with, rather than just shut it down. Air Jamaica is clearly vital to the economy, accounting for 50 per cent of the tourists coming to the island. The name 'Air Jamaica' is also a source of national pride, but the airline is really a CARIBBEAN airline, not just a Jamaican one.

How many people would agree with the JLP selling Air Jamaica to a company like Virgin if they were going to rename the airline? I say sell it, let them rename it if they want. The Government is not supposed to be running a business and this one is a major drag on our budget. If we let 'national pride' stand in the way of freeing up capital for improvements to our country, then we should not complain about lack of funds for clean gullies, better roads, better schools, better hospitals and better crime fighting.

If a private entity owned the airline, they would not hesitate to sell, and neither would their shareholders hesitate to approve. The Jamaican people must be made to realise that it is in our interest to sell, as long as the new owner guarantees the same amount of airlift or promises to increase.

I use Virgin as an example because it recently bought the London route, set up an agreement through Miami, recently launched Virgin America and a Gleaner article stated that some Air Jamaica execs had remained in London to speak with Virgin. So, we have access.

Money could be better spent

Air Jamaica lost US$135 million in 2005, roughly J$8 billion at the time. That money could be better spent: $5 billion alone covers free tuition and health care. How about: improved training and facilities for the police; better schools (buildings/facilities especially); better pay for public sector workers; and, improved roads?

Eight billion dollars a year can go very very far, especially when added to decreases on the interest we pay on debt. (A one per cent decrease saves $5 billion per year!). The only other option would be to bring on a private partner to operate the airline. But once again, the Government should not be running businesses that the private sector can run better.

I am, etc.,

DAVID MULLINGS

david.mullings@gmail.com

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