Regional private-sector-owned air carrier
Caribbean Star, based in Antigua, will cease operations on Nov. 15,
following the signing of the acquisition agreement on Oct. 24 with
regional carrier Liat. The asset purchase agreement, which
transfers Caribbean Star's assets, excluding aircraft, to Liat, is
effective immediately.
The deal, which has
been in the works for months, also calls for the final five
aircraft currently leased by Caribbean Star to be transferred to
Liat in a separate transaction on Nov 15. The transfer will boost
Liat's current fleet from 12 to 17 aircraft.
Antigua-based Liat,
whose major shareholders are the three governments of Antigua and
Barbuda, Barbados and St. Vincent and the Grenadines, will operate
the combined fleet of Dash-8 aircraft and will become the region's
largest intra-Caribbean carrier.
"Customers should
experience no interruption as a result of the transfer of aircraft
and the closure of Caribbean Star," said Skip Barnette, president
and CEO of Caribbean Star and once-sister carrier, Caribbean Sun.
Caribbean Sun ceased operations last January but recently
resurfaced again with plans to operate as a charter service in
2008.
"The flight schedule
will continue as published, and Liat will operate the flights
formerly flown by Caribbean Star equipment and crews." according to
Mark Darby, Liat's CEO.
The completion of the
asset purchase agreement marks the end of discussions that began a
year ago between the two carriers.
Jean Holder, chairman
of Liat (and former secretary general of the Caribbean Tourism
Organization), described the agreement as "one of the most
significant business deals in the history of the
Caribbean."
Holder said that,
despite the ups and downs over a year's worth of discussions, the
end result was that "the heritage of an important regional icon
[Liat] was preserved in the process. We look forward to moving Liat
ahead as a commercial entity that will best serve the Caribbean
people."
Liat operated at a
loss for years, especially since Caribbean Star entered the
competitive air transportation fray in 2000, but was able to reduce
much of its debt in 2006, thanks to a restructuring of the company
and financial bailouts by the shareholder governments on several
occasions, according to Holder.
A commercial
agreement between the two carriers was signed last February, which
put the restructuring plans into effect, reduced the employee
rosters at both carriers and downsized both fleets to suit
demand.
Merger plans, which
also were in the picture for several months, were shelved in July
when the asset buyout by Liat of Caribbean Star was agreed upon,
contingent upon the approval of a $60 million loan from the
Caribbean Development Bank to assist Liat in purchasing the assets
of Caribbean Star.
As if to signal its
new status as the airline synonymous with regional Caribbean
travel, the 51-year-old Liat will have a stand-alone presence at
the upcoming World Travel Market in London.
Liat's booth will
display its route network, schedules, services and tour packages to
the trade.
For details on Liat's
routes and schedules, visit www.liat.com.
To
contact reporter Gay Nagle Myers, send e-mail to [email protected].