Business
Jamaica’s divestment from Caribbean Airlines costly
Jamaica’s minority stake in Caribbean Airlines (CAL), the new parent airline of Air Jamaica, may come with the risk of having to assume more debt, which would contradict the intent of the divestment of the locally named carrier, claims Jamaican economist, Dr Damien King.
Dr. King contends that partial government divestments tend to result in continued debt accumulation for the Government.
“I like to remind people that the Jamaican government owns 16 percent of CAL and so the contingent risk of owning an airline still exists within the government,” King said at a joint Centre for Leadership and Governance/Gleaner Editors’ Forum held last Thursday at the newspaper’s North Street, Kingston, head office.
King compared the 2011 Air Jamaica divestment with its privatisation in the ’90s which resulted in the Government holding a minority stake in the airline but assuming the bulk of its debts. The Government reacquired the airline and billions in debt in 2004 from a group of private investors, led by Gordon ‘Butch’ Stewart.
