The much delayed divestment of Jamaica's loss-making state airline Air Jamaica is just days away, according to an announcement from the Jamaican government. Under a deal with Trinidad and Tobago's carrier Caribbean Airlines, Air Jamaica will be absorbed into its Trinidadian counterpart. For the deal to stick, however, the Jamaican government will have to cover debt obligations and other costs, including the likely redundancy of hundreds of staff, to the tune of the J$27 billion (US$302 million). The divestment will be overseen by a newly formed five-member board, which was appointed yesterday by Finance Minister Audley Shaw, and a transition management committee that is already in place. Plans to sell Air Jamaica were first announced by Prime Minister Bruce Golding in April 2008. At that time, the airline had already accumulated losses of over US$1 billion, according to press reports.

Significance:The sale of Air Jamaica is part of the Golding administration's efforts to put the island's public finances, which have long been ailing under a high burden of debt, on a sustainable footing. Efforts towards fiscal consolidation will be supported by a US$1.25-billion loan from the International Monetary Fund (IMF), but more divestments of loss-making state assets are in the pipeline. According to an announcement by Prime Minister Golding, the government plans to sell off shares in Clarendon Alumina Production and to privatise Kingston's international airport. The government also remains committed to selling the island's remaining sugar factories and estates. The implementation of this programme will be a tough test for the Golding administration, which has already come under heavy fire for plans to implement wide-ranging public sector reform and, more recently, for a J$21.8-billion tax package linked to the IMF loan (seeJamaica: 24 December 2009:).