Air Jamaica Now A Better Acquisition Target?

Today's Jamaica Gleaner carries the following story - Gov't to absorb $86b Air Jamaica debt.

I am not surprised because if I was going to bid for the airline, knowing that the Govt. was dying to get rid of it, I would use my negotiating skills to get as many concessions as possible and one of them would be reducing the debt load I take on.

The divestment plan has obviously not been going well and they finally realized that no one wants a debt-ridden company that has never been profitable.

Who do I think will bid for the airline now?

• Michael Lee-Chin
  
• Virgin
  
• Eastern Caribbean Multimillionaire (probably from Barbados)
  

My money is on Lee-Chin to strike a partnership with Virgin and share the risk. His push for high-end tourism fits perfectly with Virgin Atlantic's brand and experience.

Would it still be called Air Jamaica though?

Would Lee-Chin go it alone without a major airline partner?

The Jamaica Gleaner Does Air Jamaica Wrong With Sensationalist Headline

The Gleaner's article today stating "Air Jamaica Bankrupt" makes it's agenda quite clear for those who did not know already.

While I too speak about the burden of the airline and the need for divestment and redeployment of that badly needed capital, I do not use sensationalism and potentially problematic headlines to make my case.

There are lots of companies that operate with "more in liabilities than its assets were worth" and before turning a profit. Amazon.com lost money for 7 years and it's assets were never worth more than the liabilities (it benefitted from venture capital).

Look at them now.

Granted Air Jamaica has a history of losses and is no Amazon.com, but one should consider the consequences of such a headline.

While the definition of "bankrupt" is correct, Air Jamaica has not filed "bankruptcy", but few people know the difference. I can only imagine the calls to Air J with people asking if their flight is still on.

Responsible journalists would go for a less sensationalist headline. I am very disappointed with this kind of headline meant to sell papers and scare people.

p.s. I sent this as a letter to them today. I wonder if they will publish it?

Jamaican People and Businesses Must Play Their Role In Fighting Crime

I read about the Jamaican pubic crying out for the government to make a real effort to solve the crime problem and corporate Jamaica is doing the same thing.

What I don't hear however is the affirmations to play their own roles in making this a reality. Governments need money to pay for policing and that money usually comes from tax revenue. Audley Shaw once again pointed out some disturbing facts at the recent economic forum.

Jamaican people need to:
(1) Pay their taxes - Cheating the government of the money it needs and then complaining about poor services and policing is hypocritical. Less than 250,000 people in Jamaica pay income taxes, with more than 220,000 of those being on the PAYE system, meaning that they pay taxes BEFORE they get their paycheck.

(2) Supporting the police by providing information - The "informa fi dead" culture is rampant and continues to be promoted. Nobody whose family member has been a victim would ever support such a stupid notion.

Corporate Jamaica needs to:

(1) Pay their taxes - "Corporate income tax accounts for 68 per cent of the arrears" and "One per cent of the firms account for 75 per cent of income tax". That makes no sense whatsoever. Corporate Jamaica needs to pay up because that is the money that trains the police, hires new officers for an understaffed force and allows upgrades to increase the efficiency of investigations.

Add to that the fact that these very same companies are calling for a tax rate reduction when they don't even pay their taxes anyway!

(2) Reduce the interest rates collected on national debt - The largest holders of Jamaica's national debt are Jamaican companies. Is the almighty dollar and the pursuit of profit more important than facilitating a a positive business environment? Lowering the interest rate by 1% saves J$5 Billion, money that can also go towards policing efforts.

There is a lot of blame to go around for the growing crisis and while the Government deserves much of it, the people of Jamaica and Corporate Jamaica must share some of the blame.