Prime Minister of Trinidad and Tobago, Hon. Kamla Persad-Bissessar, has confirmed that her Government is prepared to honour the deal between Air Jamaica and Caribbean Airlines (CAL).
She made the disclosure during a press briefing on July 8 at the Office of the Prime Minister (OPM), Jamaica House.
Caribbean Airlines took over Air Jamaica’s operations following an agreement finalised in April. Under the agreement, the Trinidadian Government was slated to contribute working capital to facilitate the merger, while the Jamaican Government assumed the debt and covered the winding-up costs.
Prime Minister the Hon. Bruce Golding addresses a press briefing on July 8 at Jamaica House, following bilateral talks with Prime Minister of Trinidad and Tobago, Hon. Kamla Persad-Bissessar (seated right).
Concerns were raised about the deal by Mrs. Persad-Bissessar’s administration on assuming office in May, but she explained earlier that these concerns were primarily based on a lack of transparency in the negotiations leading up to the agreement.
She noted that the deal between the airlines would be of mutual benefit to Trinidad and Tobago and Jamaica.
“It took us a little while in Trinidad, as a new government, to review the agreement plus other areas relating to Caribbean Airlines, and I am very happy to announce that we are going to be partners, definitely when it comes to Air Jamaica and Caribbean Airlines,” the Trinidadian Prime Minister said.
Mrs. Persad-Bissessar also stated that the brand ‘Air Jamaica’ would be retained, despite the takeover.
“Branding is a very vital marketing strategy and, yes, the brand ‘Air Jamaica’ will be kept. Part of the whole agreement is to have acquired brand Air Jamaica in addition to whatever assets. It is vitally important to the success of the venture,” she noted.
She said that when the Government of Trinidad and Tobago reviewed the agreement, there were some risks and advantages for both countries.
“Jamaica signed an open skies agreement and, under that, it means that any United States carrier can fly into Jamaica and fly out. At present, there are several low-priced carriers coming into Montego Bay and Kingston. The competiveness of the new Air Jamaica airline, as against these low-cost fares of airline companies which have far greater economies of scale, because they are much bigger operations, that is a risk that we will be going into in terms of competing with those persons,” Mrs. Persad-Bissessar explained.
She also referred to the fuel subsidy, which will continue from May 1 to December 31.
“When the fuel subsidy ends, we run a risk of that increased fuel cost putting us into a loss position. When you couple that, with the low cost airlines coming in there is a risk in that regard. But, in any business venture, there are risks. You can stand to win or you can stand to lose. The risk analysis was done and we took the bottom line to go with it,” she said.
Jamaica’s Prime Minister, the Hon. Bruce Golding, noted that he was very impressed with the willingness of Prime Minister Persad-Bissessar to work with Jamaica to iron out the areas of difficulty that existed.
“I am very satisfied, based on the discussions we had, that in Prime Minister Kamla Persad-Bissessar, Jamaica has a friend, we have a partner,” he said.
“It doesn’t mean that we will not have problems that will have to be addressed, but I am very pleased that there is a spirit of good will that exists between us,” Mr. Golding added.