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Volume No. 1 Issue No. 32 - Wednesday, November 27, 2002 |
LIAT May be Facing Bankruptcy
by: Thomson Fontaine
The Regional airline LIAT (Leeward Island Air Transport) is on the verge of financial ruin and has called on Regional governments (CARICOM) to intervene in regulating the ticket prices between the Islands. In a hastily convened meeting in St. Vincent, the airline blamed Caribbean Star headquartered in Antigua for its demise saying that the airline was engaged in predatory pricing.
LIAT officials complained that the airline was charging prices far below its competition and as a result LIAT had suffered significant financial losses and may be forced to close or scale back operations if Regional governments did not intervene.
CARICOM governments are currently the main shareholders in LIAT and for years have had to bail the financially troubled airline. LIAT has operated in the Region for over thirty years and for most of that time has operated at a loss. In the process it has built a reputation for high prices and an abysmal timing schedule. At the St. Vincent meeting, Regional ministers discussed a possible pricing structure and bailout for LIAT.
Caribbean Star is owned by Antiguan businessman Alan Stanford and has been in operation for approximately two years in direct competition with LIAT. Both airlines fly between the member states of CARICOM. Star's Chief Executive Officer Paul Moreira urged CARICOM not to intervene in regulating ticket prices. Mr. Moreira said if government interferes with the fares passengers would be hurt.
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