Caribbean Airlines has issued a statement rubbishing industry rumours it is about to recant on a deal to acquire rival Jamaican Air.

Caribbean was bounced into a deal to sign the loss making Jamaican carrier last year, with the government of Trinidad & Tobago offering finance.

Under the terms of the agreement, Caribbean Airlines committed to investing US$50 million in the beleaguered carrier, which has managed to turn a profit just once in its 42-year history.

In turn, the Jamaican government met the debts of its former flag-carrier and covered the costs of winding up Air Jamaica.

Caribbean Airways took over the operation of all Air Jamaica routes on May 1st 2010, and plans to re-launch the Air Jamaica brand on January 14th in Kingston.

Subsidies

However, fuel subsidies offered to Air Jamaica by the Jamaican government expired in December, prompting some to question if the deal had wings.

Jamaica’s leader of the opposition, Portia Simpson Miller, has been among the most vocal critics, calling for an update on the deal earlier this week.

Caribbean Airlines responded: ““The board made no such suggestion and it could not be further from the truth.

“To the contrary, the board - in keeping with the decision of the government of Trinidad & Tobago - has indicated its commitment to the completion of the acquisition of the Air Jamaica routes.

“Caribbean Airlines is proceeding under the theme ‘one Caribbean airline, two brands’,” said the statement.”

Caribbean Airlines added all remaining steps to complete the transaction should be completed this month.

Plans for Air Jamaica include changing its fleet from Airbus aircraft to newer Boeing 737-800s by the end of April, which is expected to improve on-time performance; and resuming flights to London.