Although regional carriers Liat and
Caribbean Star missed their self-imposed June 15 deadline for
merger completion, both carriers are confident that the deal will
be finalized by the end of July, at which time the two carriers are
expected to operate as a single airline.
Mark Darby, Liat's
CEO, said that the delay is centered upon legal documentation, but
in the meantime, behind the scenes "we are still moving
ahead."
The merged entity
of the two airlines would only be 40% larger than the original
Liat, according to Darby.
Within that
context, he said that operations would have to be streamlined and
job cuts would take place.
The phased approach
is necessary because Caribbean Star will continue to operate
separately from Liat until all Caribbean Stair aircraft have been
transferred to Liat and all regulatory processes have been
completed, Darby said.
In fact, Caribbean
Star already has initiated a phased staff separation process that
includes the elimination of 56 positions in phase one, which will
take effect at the end of July, one month after employees are given
notice.
The employees
included in the first phase are those "who are not essential for
the continued operation under the terms of the agreement with
Liat," according to Darby.
However, some of
Caribbean Star's employees are expected to take up positions with
Liat, which is posting available positions and both carriers are
working to promote the positions to Caribbean Star
staff.
All employees
separated from Caribbean Star will receive an equity payment
calculated at one month's pay per year served in addition to one
additional month's salary as an expression of gratitude "for their
contributions to the airline," according to Darby.
Caribbean Star
currently employs approximately 290 employees.
"We know this is a
difficult process for our staff, so Caribbean Star is committed to
work with staff needs to help make this as positive an experience
as possible," said Laura Cotton, Caribbean Star's director of
corporate communications.
The merged carrier
will go by the name Liat-The Star of the Caribbean; Liat's current
LI designator will remain in use by the merged carrier.
The ownership of
the new airline will remain as agreed upon in March: 65% to
Caribbean shareholder governments (Antigua and Barbuda, Barbados
and St. Vincent and the Grenadines) and other Liat shareholders,
and 35% to the Antigua-based Stanford Financial, which owns
Caribbean Star.
To
contact reporter Gay Nagle Myers, send e-mail to [email protected].