Robert Hart and Dionne Rose, Staff Reporters
LAWRENCE
BACKED UP by a US$200 million loan raised on the international capital market on Wednesday, Air Jamaica's interim management is optimistic it will sort out the airline's operations within an additional three months.
Officials at Air Jamaica yesterday reported that the national airline has achieved significant improvements in some aspects of its restructuring programme, six months after the Government took over its operations.
Addressing a press conference at Air Jamaica's headquarters on Harbour Street, downtown Kingston yesterday, the airline's chairman, Dr. Vin Lawrence, reported losses of about US$64 million over the six-month period.
He said the losses were primarily attributable to maintenance activities, as well as the cost of rerouting passengers to other airlines.
"Our operations are being streamlined with a reduced cost structure which should enable us to compete in a highly price-sensitive and competitive market," Dr. Lawrence reported.
He said the US$200 million loan was "a key element in our capital restructuring and it will provide the debt service support to help Air Jamaica to maintain its position as the region's premiere airline."
The funds would also be used to refinance short-term debt, extend the life of the company's liabilities, and fund capital expenditures, Dr. Lawrence added.
The funds were raised by way of a Government-guaranteed bond through investment bank Bear Stearns. The Air Jamaica bond has a 10-year tenure at a coupon or interest rate of nine and three eighths, approximately three eighths above the recently issued Government of Jamaica Eurobond.
