Jamaican government near deal to double Air Jamaica stake

Airline Industry Information, Nov 25, 2004

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The Jamaican government is reportedly close to a deal to almost double its stake in the national carrier Air Jamaica as the airline tries to solve its debt problems and continue services.

The government will increase its stake from 25% to 45% in exchange for wiping out USD110m in taxes and fees owed by the airline. The government cut its stake in the airline in 1994, with the rest of the shares owned by a group of investors led by the airline's chairman Gordon Stewart.

The deal is still being negotiated but comes after fresh criticism of the airline after it was revealed that Air Jamaica owes USD682m and has lost USD560m since privatisation in 1994. Stewart has denied suggestions that the airline has been avoiding its debt responsibility and said that it has paid USD160m in taxes and fees in the last ten years and that the airline generates USD1.5bn in tourism revenues for Jamaica, reports The Associated Press.

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