Air Marshall Islands board of directors has endorsed a plan to offer the private sector a 51 percent controlling interest in the government-run airline, and is looking at management options available before a plan is formally put to the Cabinet for endorsement.
Transportation Minister Kenneth Kedi said Wednesday the airline’s board has endorsed the idea of making the airline a private sector-government partnership, with the private sector to hold a 51 percent controlling interest.
“I’ve informed the Cabinet and we’re waiting for the airline to prepare management options to provide for Cabinet review and approval,” said Kedi, who also doubles as the airline’s board chairman.
Air Marshall Islands was established in 1980 by the national government to provide service to many distant, sparsely populated islands in this watery nation. An 11-year financial review of Air Marshall Islands through 2009 presented to the board earlier this year showed the airline lost $19 million over this period.
The airline operates two planes, a Dornier 228 and a Dash-8 aircraft that is waiting on funding to be sent for a major maintenance overhaul in Australia — after which the airline hopes to sell it.
The Dash-8 has been taken out of AMI’s regular flight rotation, so that the Dornier is the only plane providing service.
The Dash-8 is overdue for heavy maintenance that all aircraft are required to undergo after a certain number of flying hours.
Kedi said the airline is seeking a $1.6 million bank loan to cover the costs of the maintenance that will be done in Australia.
Once funds are obtained and the aircraft sent to Australia, it is expected to take about two months to complete the work on the Dash-8, Kedi said.
Kedi said the airline believes it can get a higher sale price for the Dash-8 after it has been fixed than if it tries to sell the plane as it is now.
“After we sell the Dash, we’ll try to buy another Dornier or similar model plane,” he said.
