As Air Jamaica announces major restructuring its chairman, and all-inclusive guru, Gordon “Butch” Stewart has pulled his Air Jamaica Acquisition Group (AJAG) out of the award-winning carrier and the airline is now in complete control of the Jamaican government. Air Jamaica accounts for some 51 percent of all airlift to the Caribbean destination.
Mr. Stewart has not left the business on a negative note however as he has pumped a further US$20 million into the airline in a bid to assist the ailing business.
Private shareholders, including AJAG, previously accounted for 78 percent of Air Jamaica stock. “Butch” financed the majority of the US$27 million that AJAG coughed up for a major stake in Air Jamaica during the 1994 privatisation.
All AJAG members of the board of directors and Air Jamaica Holdings - including deputy chairman Chris Zacca - stepped down Dec. 23.
It is reported that Omar Davies, Jamaica’s Minister of Tourism also said the Jamaican government will assist $25 million in loans to Air Jamaica to finance restructuring. The aim will be toward attracting “equity capital from private investors.”
“The Government of Jamaica has consistently maintained its commitment to the national airline, however, the administration has no desire to retain permanent ownership and control of Air Jamaica. Our common objective is to ensure that the airline is made viable, whilst maintaining the excellent standards already established under the Chairmanship of the Hon. Gordon ‘Butch’ Stewart,” stated Dr. Omar Davies. “Our action at this time to restructure the entity, so that it will be able to attract adequate equity capital from private investors, has been taken in the interest of the national economy.”
A new 10-member government board has been appointed to work until June 30 this includes Paul Pennicook, executive director of the Jamaica Tourist Board.
The Hon. Vincent Lawrence, who represented the Government on the Air Jamaica board over the last eight years, has been appointed interim Executive Chairman of the new board. His priority mandate is to oversee the restructuring activity and to recruit and appoint an appropriately qualified CEO with extensive airline experience.
Stewart said “ongoing turbulence” in the airline industry had “imposed tremendous strain” on AJAG resources thus forcing its continued involvement “untenable.”