Air Jamaica sold - First murmurs about who has bought the national carrier have surfaced
Published: Saturday | July 4, 2009
Janet Silvera, Senior Gleaner Writer
The Gleaner has learnt that Indigo Partners and Oaktree Capital, who are reportedly the owners of Spirit Airlines, have bought the country's national carrier, Air Jamaica.
It is further understood that Air Jamaica's name might be changed to Spirit of Jamaica.
Sources close to the negotiations are tight-lipped, but they have confirmed that Trinidadian-owned Caribbean Airlines did not win the bid to take over the Jamaican airline.
The news comes days after the Privatisation committee, which has been managing the task of privatising Air Jamaica, submitted its recommendation to Senator Don Wehby, minister without portfolio in the Ministry of Finance.
It also comes at a time when the airline is reporting an operational surplus for the first time in 10 years.
On Tuesday, Wehby disclosed that the Privatisation Committee, chaired by Dennis Lalor, had submitted to him the evaluation and recommendation report on the privatisation of the national carrier.
In a media release, the minister said that the committee - assisted by expert input from the International Finance Corporation, which is the private-sector arm of the World Bank Group, and which has a record of more than 150 successful assignments in some 60 countries - had negotiated strategically with the two top investor prospects and had made a final recommendation for the signing of a document of agreed terms with one party. The terms include a provision for the Government of Jamaica to maintain a minority equity stake in the airline.
Some stakeholders in the tourist industry would not be disappointed with this outcome. Many have confided that this would be good move on the part of the Air Jamaica divestment team.
"Spirit is already mean and lean and that is exactly what Air Jamaica needs in order to strategically grow," said one hotelier, adding that the routes plied by both carriers might be complementary.
Earlier, Spirit had announced the completion of a strategic investment, led by Indigo Partners LLC and funds managed by Oaktree Capital Management LLC. The investment will provide significant resources for the company to consolidate its position as the leading low-cost carrier to the Caribbean, and pursue its long-term growth strategy.
Indigo Partners LLC, with offices in Phoenix, Arizona and Singapore, is a private-equity fund focused primarily on investing in the transportation, airline and airline-related sectors globally.
Oaktree Capital Management LLC is a Los Angeles-based private investment firm that manages in excess of US$30 billion in select niche investment markets for institutions and wealthy individuals.
We have tickets for our Dec. trip to CN. I am wondering what will happen to this flight. I will be watching closely. AJ had moved our flight to 7am which thrilled us to death. Earlier arrival in Jamaica. Thanks for this information
This has been a good and a bad for us. We are scheduled for a November trip to CN. 10 visits to the island, we have always left the same day of week, and returned the same day of week. Of course, I bought my tix months ahead of time. Got a call on Tuesday from the travel agent that they are not flying back into Philly on Friday evenings (or at least not the flight we had) so I had to add an extra day on the island or come home a day early.
Adding the extra day was not expensive at all, but it is playing havoc with everything else. The kennel for the dogs, the pe sitter coming to the house, car service, etc.
I always thought Philly was one of the larger air jamaica hubs, and it worries me to see flights getting cancelled from here, as I have never had a flight that was less than (from my perspective) 95% full. We generally fly Top Class... or business or whatever the heck they are calling it now... and that section is always full.
Really interested on how this is going to play out. We try to fly AJ from Philly. because they are non-stop, arrive in Jamaica in the morning and leave at 5: pm. Haven't purchased tickets for April 2010 yet but do have dates booked at Couples. I'm all for staying an extra day if that's how it plays out
Does anyone know if there is a website that is posting flight changes, cacellations, delays, etc... I have a non-stop from Baltimore in Oct., and we were excited about getting to CSS early and without a stop. I guess now I will never have flown Air Jamaica. Too bad, I heard mostly good things about them. Jonathan&Nikki (Martinsburg,WV)
I don't see much good coming from this transition. We've never liked Spirit, they are the first airline to charge you for something that no other airline has yet considered. I wouldn't be surprised if they put pay toilets on all their jets.
That having been said, when Air Jamaica gave up their gates in Miami, we switched to American Airlines as they've the only morning flights from South Florida to Montego Bay with an afternoon return. Air Jamaica, flying solely out of Ft. Lauderdale, leaves in the afternoon and returns in the morning. When they were in Miami, they had just the opposite.
It's getting us too--We fly out of Philly all the time--it's one of those leave early, stay late deals. Our TA called to advise us that they don't fly on a Thursday---we had 3 options---Leave a day later and stay a day later, leave a day earlier and leave on scheduled day or fly US air and get there late and leave early---
US air---not an option, so we decided to come a day earlier---
I'm still trying to figure out why the Philly hub changed, cuz as someone else said, the flights we've been on have been near if not at capacity, every time
Air Jamaica sold?? Not too fast!!!
Just checked the Gleaner and Observer. Both report that the deal is not yet done. Neither indicate that Spirit is the new owner. We'll wait and see. For me, I hope they keep the 044/045 out of Philly.
According to the Orlando Business Journal this afternoon it said that Spirit Airlines has bought Air Jamaica. In NY,our Dec Air Jamaica flight has been changed from 7:55am to 12:45pm. Spirit only goes out of LaGuardia here and they are all stop over flights. Hopefully Spirit Air will keep the AJ flight out of Kennedy and maybe change it back to a morning flight (doubtful). A bit nervous thou as last year our friends were booked on Spirit and when they called from Jamaica to reconfirm their flight they found out it was cancelled and had to leave a day early to get a flight. They were never notified.
Time will tell..
BobF 0 I hope you are right. I check the Spirit airline, there are no straight thru flights from the NE to Jamaica. All have a layover. If i remember right, we wolud leave BWI around noon and not arriive in Jamaica until around 8pm. There is a good layover at Ft. Lauderdale. I even checked to see if we left a day early, stayed the night in Florida, then flew to Jamaica the next morning. All flights from Ft. Lauderdale leave at around 2-4 pm. This would be a bummer for us. I looked at some other flights and did find one that we could get early in the morning for going to Jamaica and return later, if I can pick which flight I want to take. But they also have if I remember right have layovers. We have been spoiled with AJ. All 4 visits we have had straight through flights and arrived a little after noon at the resort. I am watching very closely. Have not heard anything from my TA yet, but it doesn't look like they have cancelled the days we are flying. I have noticed AJ have taken a few flights away from BWI.
Last edited by Happytimes42; July 9th, 2009 at 08:59 PM.
We're feeling your pain.... we were all set to book our usual Dec flts (flew out of Phila the last few times and worked out great, of course it took some getting used to but after they changed the Newark flts that was the only sensible aleternative)-Now that's changed too! NG, they discontinued (hopefully temporarily) Saturday Flights from Phila (for the fall?) - makes no sense!.... Plus we would have been okay if we had stuck with our usual Fri to Sat routine, but just couldn't do that this year....
We'll see what happens.... fingers crossed for the next trip.
For us folks in NJ that may mean some day in the future non stop flights may be available from Atlantic City, which is one of Spirits hubs. That would be awesome!
ARRRgg- I hate Spirit, they charge for seats, they have call centers that are not located in the US, if I am paying for an airline ticket why do I have to pay for a seat???? This has just gotten out of control, yes it would be nice to fly out of Atlantic City, but I am not paying extra for a seat when I have already purchased a ticket. This is just one of those things that really makes me crazeeeeee!
I called Air Jamaica today and they said that they have not been sold.
I wish to express concern on behalf of the Air Jamaica Privatisation Committee, which I chair, about a misleading story - headlined 'Air Jamaica Sold ...' - which appeared in the Saturday, July 4, issue of The Gleaner.
I characterise the story as 'misleading' because Air Jamaica has not yet been sold. It was stated clearly in a news update which was issued June 30, that the privatisation committee has made a recommendation regarding a possible transaction. The press release also made it clear that a decision on that recommendation had to be made by Cabinet and the board of Air Jamaica. Neither of those activities has as yet taken place.
No contracts signed
Additionally, both the headline and the other sections of The Gleaner's July 4 story - which named two firms which "have bought the country's national carrier, Air Jamaica" - give the impression that the privatisation committee and the minister have misled the country by executing a sale, while advising the country that only a recommendation, which is to be decided upon, has been made. This is far from true and I use this opportunity to reiterate that such formal approvals have not been made and that no contracts have as yet been signed with anyone.
Recent experience with other privatisation efforts should make everyone aware of just how carefully negotiations of this nature must be handled. The negotiations to privatise Air Jamaica are at an extremely delicate stage and the confidentiality arrangements remain in place until initial agreements are signed, key stakeholders are brought up to date on the possible implications of the sale and there is final closure.
While we understand the desire of media houses to 'scoop' each other on matters of national interest, such as the Air Jamaica privatisation, we urge that care be taken to ensure that nothing is done to derail what is a critical transaction for and on behalf of all the people of Jamaica.
I for one would love to see AJ stay AJ, and keep things the way it has been. I know some things have to change, but we have alway been very happy with AJ. No, there won't be any Momosia next trip, or breakfast, so what, that is a small price to pay to keep a non stop flight to Jamaica. I am still watching very closely. Maybe a glimmer of hope for those of us that like AJ
Air Jamaica not sold yet, say Gov't officials
Sunday, July 05, 2009
Government officials were, up to last night, tight-lipped about the reported sale of Air Jamaica to discount carrier Spirit Airlines, offering only that a deal has not yet been signed.
WEHBY. has not yet discussed the Air Jamaica privatisation report with the prime minister
"We are still talking to interested parties and the matter has not yet gone to Cabinet," said one Air Jamaica board member who requested anonymity.
He was reacting to yesterday's lead story in The Gleaner which stated that the national carrier had been sold to Indigo Partners and Oaktree Capital, said to be the owners of Spirit Airlines.
One Government official close to the Air Jamaica privatisation process reiterated that the Privatisation Committee, chaired by Dennis Lalor, had submitted to Don Wehby, minister without portfolio in the Ministry of Finance, the evaluation and recommendation report on the privatisation of the national carrier.
Last night, the official said that Wehby had not yet discussed the report with the prime minister and will not be able to do so this week, as he (Wehby) will be off the island holding meetings with the International Monetary Fund.
"There has been no sale as yet," the official said. "The recommendation still has to go to the Cabinet and the board of Air Jamaica before a decision is taken."
Yesterday, The Associated Press reported that Spirit spokeswoman Misty Pinson refused to comment when contacted.
According to The AP, Spirit is privately owned and flies to 36 cities in the US, Latin America and the Caribbean.
Year to date, Air Jamaica reported an operating loss of US$63.51 million on revenues of US$293.27 million, considerably better than last year's performance which saw the airline reporting an operating loss of US$162.43 million on revenues of US$350.98 million.
Last week, Wehby said that the improvement in the financial and operational results of the airline has helped the process and has increased investor interest in the airline.
He said that the privatisation committee - assisted by expert input from the International Finance Corporation, which is the private sector arm of the World Bank Group, and which has a record of over 150 successful assignments in 60 countries - had negotiated strategically with the two top investor prospects and has made a final recommendation for the signing of a document of agreed terms with one party. The terms include a provision for the Government of Jamaica to maintain a minority equity stake in the airline.
Last month, the Observer reported that Trinidadian carrier Caribbean Airlines and British tour operator Thomas Cook had both placed serious bids to acquire Air Jamaica.
The deadline for privatising Air Jamaica was recently extended to June 30.