5:30 PM Miami – Caribbean Air completed the purchase of Air Jamaica in exchange of 16% stake with the Jamaican government in the combined airline. Caribbean Air hopes to return between $12 million and $15 million a year beginning 2011.

Caribbean Air completed its acquisition of Air Jamaica and offered 16% stake in the merged airline to the government of Jamaica according to Chairman of Caribbean Air Arthur Lok Jack valuing the stake at $30 million.

Caribbean Air has assumed full ownership and operating responsibility of the Air Jamaica as of May 1. Government of Trinidad and Tobago has extended $50 million to fund the transition and the government of Jamaica has provided $19 million for the advanced ticket sales for travel from May 1.

Since its inception in 1968, Air Jamaica has racked up losses of $1.3 billion.

Prime Minister in a statement to Parliament noted, “Unfortunately that pride has come at a huge cost, $126 billion over the forty years and $31 billion over the last three years, as among other things, the international airline industry has come under tremendous pressure from rising costs and intense competition.”

He further added, “We have been fortunate in that we have been able to transfer the majority ownership to a regional carrier, Caribbean Airlines, which will operate the routes that are of the greatest importance to Jamaican travelers, the Diaspora and tourist visitors making connections to Jamaica. The government of Jamaica will have minority ownership in all of Caribbean Airlines, not just the Jamaican operations, but will not be required to absorb any losses or provide any capital.”

Chairman Arthur Lok Jack at a press conference in Kingston said the airline hopes to generate between $12 million and $15 million on return of its investment beginning 2011.