Shareholder’s Agreement for air Jamaica/Cal merger to be signed April 30

KINGSTON — As the transition period for the merger of Air Jamaica Limited (AJL) and Caribbean Airlines Limited (CAL) draws to a close, a Shareholder's Agreement is expected to be signed on April 30, Minister of Finance and the Public Service, Hon. Audley Shaw has revealed.

In his Budget Debate presentation in Parliament yesterday, the Finance Minister noted that the one-year transition period, which began May 1, 2010 was necessary to ensure that control of AJL's operations was successfully transferred to CAL, while allowing the time necessary for the Trinidad and Tobago-based company to secure the necessary licences and properly integrate the operations.

“As of today, we have so far had a successful operation, and CAL has secured the rights to fly from Jamaica to North America, and has made significant progress in integrating both operations into one, while maintaining the strong Air Jamaica brand,” Minister Shaw said.

He noted that the impending merger has been beneficial to the country as there has not been any disruption to airlift capacity, and the Government has avoided accruing additional losses from Air Jamaica.

Minister Shaw further noted that the Government also received a refund of some US$2.4 million on external payables “based on the fact that we made efforts to liquidate expeditiously."

“It should be noted that last fiscal year, the Government budgeted US$204.3 million (J$17.6 billion) to pay out certain external payables, and we paid out only US$163 million (J$14.1 billion). We were therefore able to apply the difference to pay off a long-term loan and thereby save hundreds of thousands of US dollars in interest payments,” he noted.

 Minister Shaw further informed that by the end of April 2011 the Government would have returned four of the six leased aircraft, based on negotiated early returns, which has saved the country significant future liabilities.

The Finance Minister’s presentation was themed: ‘From Stabilisation to Growth’.

By ALECIA SMITH, JIS Reporter