To­day's Ed­i­to­r­i­al

The merg­ing of the busi­ness op­er­a­tions of Air Ja­maica with Caribbean Air­lines, much dis­cussed and of­ten de­layed, was con­sum­mat­ed this week with the in­jec­tion of $300 mil­lion in­to the deal by Trinidad and To­ba­go's Gov­ern­ment. That sum is ear­marked for up­grades and in­vest­ment in the Ja­maica op­er­a­tions, and the 16 per cent share of the merged en­ti­ty grant­ed to the Gov­ern­ment of Ja­maica trans­fers six Air Ja­maica air­craft and eight key routes to the new en­ti­ty. Un­prof­itable Air Ja­maica routes were dropped by mu­tu­al agree­ment dur­ing ne­go­ti­a­tions. Just over half of Air Ja­maica's em­ploy­ees, 1,000 of the 1,800-strong work­force, will con­tin­ue to run the op­er­a­tions ac­quired by Caribbean Air­lines. The first flights un­der CAL man­age­ment were sched­uled to be­gin yes­ter­day, end­ing a long his­to­ry of na­tion­al avi­a­tion for Air Ja­maica, which fold­ed at the end of April, with the pro­vi­sion­al des­ig­na­tion of Caribbean Air­lines as the na­tion­al car­ri­er of Ja­maica.

Many long, dif­fi­cult miles have been trav­elled in bring­ing this deal to its con­clu­sion, but for Caribbean Air­lines, now a re­gion­al air­line in more than name, the jour­ney has on­ly be­gun. Ahead lie the chal­lenges of fa­mil­iari­sa­tion with the new routes it has har­vest­ed in the deal, eval­u­a­tion of the prof­itabil­i­ty pro­file of the new ex­pan­sions to its op­er­a­tions and the re­al chal­lenge of merg­ing its own fresh­ly-mint­ed cor­po­rate cul­ture, one not quite carved clean from the long lega­cy of BWIA, with that of a 42-year-old en­ti­ty, one rich­ly-vest­ed with its own trap­pings of Ja­maican na­tion­al pride. Caribbean Air­lines wasn't the first or the on­ly suit­or for the as­sets of Air Ja­maica. At var­i­ous times since 2007, when pri­vati­sa­tion of the air­line was first tabled, Air Ja­maica has been con­sid­ered by Air Chi­na, Delta Air­lines, Vir­gin Air­ways, Iberia Air­lines and Emi­rates Air­lines.

It's quite like­ly that if the cir­cum­stances of vir­tu­al­ly every air­line fly­ing to­day were any less dire, the bid­ding for the as­sets of Air Ja­maica would have been much more heat­ed. As it was, the fin­ger gen­tly teas­ing the trig­ger men­ac­ing the end of the air­line's four-decade run be­longed to the In­ter­na­tion­al Mon­e­tary Fund, which in­clud­ed as a stip­u­la­tion of its fi­nanc­ing arrange­ments with a cash-strapped Ja­maica re­moval of the cash-hun­gry air­line from the gov­ern­ment's books. Since 1969, the air­line has cost the Ja­maican gov­ern­ment US$1.4 bil­lion, of which US$330 mil­lion was re­quired in the last three years alone. A Caribbean Air­lines pres­ence on Air Ja­maica's routes will ben­e­fit from some of the arrange­ments be­tween the Trinidad and To­ba­go Gov­ern­ment and the lo­cal car­ri­er, which in­cludes a fi­nan­cial hedge against ris­es in the cost of jet fu­el, eas­i­ly the most volatile line item in the cost of op­er­at­ing an air­line in to­day's com­mer­cial avi­a­tion mar­ket.

Caribbean Air­lines has dodged the costs of pen­sion and sep­a­ra­tion pack­ages for Air Ja­maica em­ploy­ees leav­ing the de­funct air­line, and the con­sid­er­able debt and clo­sure costs, es­ti­mat­ed at US$800 mil­lion. Air Ja­maica was al­so com­mit­ted to pay statu­to­ry de­duc­tions to Ja­maica's Na­tion­al Hous­ing Trust and the Na­tion­al In­sur­ance Scheme, which it has not done since 2008. That's a big cost to Ja­maica, who will al­so be los­ing a source of con­sid­er­able na­tion­al pride and pa­tri­ot­ic iden­ti­fi­ca­tion, but it will, ul­ti­mate­ly, be a big win for the coun­try's fi­nan­cial plan­ners, rid­ding them of the un­cer­tain fu­ture debts of an air­line that wasn't able to keep pace with the rock and a hard place eco­nom­ics of air­line trav­el in the 21st cen­tu­ry.

The tim­ing of this arrange­ment, in train for months now since Ja­maican Prime Min­is­ter Bruce Gold­ing vis­it­ed Trinidad and To­ba­go last De­cem­ber, to open talks, all but de­mands some ar­tic­u­la­tion and ex­pla­na­tion on the hus­tings. The last thing this del­i­cate and long-ne­go­ti­at­ed deal needs is mis­un­der­stand­ings in a heat­ed po­lit­i­cal en­vi­ron­ment. On the ba­sis of what has been re­vealed, so far, the merg­er is a pure busi­ness deal that's been ne­go­ti­at­ed to the ad­van­tage of both Ja­maica and Trinidad and To­ba­go, but sup­port for the "sud­den" spend­ing of an­oth­er US$50 mil­lion all but de­mands se­ri­ous, de­tailed and thor­ough ex­pla­na­tion from the Gov­ern­ment.