BWIA, Liat flock to the Caribbean skies

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BWIA, Liat flock to the Caribbean skies
By Sharon Lym (Trinidad Guardian)

At a time when travel is down, costs are sky rocketing and in an atmosphere
of fierce competition, BWIA and Liat have joined forces to survive in the
region's struggling airline industry.  On Tuesday at the Savannah Hotel in
Barbados, BWIA and Liat presidents Conrad Aleong and Garry Cullen shook
hands as they announced the deal to the media. Aleong said the strategic
alliance would see both airlines sharing key services to provide seamless
travel to passengers through the Caribbean from international
destinations.  This means Liat travellers will make connecting flights to
BWIA's international destinations and visa versa without having to worry
about their luggage.  After the press conference Aleong said this pooling
of resources would give the airline an added "piece of strength" as it
would stop the erosion of the company's resources.  Without the alliance,
he said, BWIA would have to find the funds to buy new Dash 8's to expand
into the Eastern Caribbean.  He said the alliance is suitably timed as the
airline industry worked in cycles and is now in a down period.  "When you
are prepared in the lean times you're positioned well to benefit in the
growth time," he said.
Aleong predicts that the industry will become vibrant once again in the
next three years.

BWIA vice president, marketing and sales, Beatrix Carrington, said the
agreement will be implemented in phases.
The first involves code sharing with Liat travellers on BWIA planes, with
the next phase being accommodation for BWIA travellers on Liat
flights.  Presently both airlines are working on the co-ordination of
schedules and frequency of flights.
Aleong said the new alliance would not reduce or increase fares put help to
sustain the present prices.  But both airlines plan to jointly approach
insurance companies for better premium insurance rates.  "Instead of both
of us going to buy our own insurance policies we will do that jointly so we
will both get at a better premium," he said.  The full effect of the
alliance should be felt by March of this year, when both airlines would
share the same facilities and services.  As an example both airlines will
together pay one company in Barbados for its ground handling service. This
bulk buying would be applicable also to replacement parts (both airlines
own Dash 8s) and food services.  Aleong expects the alliance would increase
revenues and reduce costs of both airlines.

Liat's Cullen said the combination of the two airlines would create a
strong Caribbean network. While the presence of international airlines is
"crucial" to the future of regional tourism Cullen said dependency on such
carriers is risky.
The airlines are not afraid of the competition, however, Cullen said. Liat,
he disclosed, had had approached other regional competitors regarding an
alliance but they expressed no interest. He said large sums are lost
duplicating Liat's route, when it could have been spent on other areas that
are not being serviced.  "If you get a carrier who says they want to
dominate the region, it can't work," he said.  Within the last year
competition has become more "hostile" with air transport capacity almost
doubling especially at a time when the market is depressed, Cullen
observed.  Air travel still has not picked up as fast as the airlines
expected after September 11 and to improve service there may be moves to
join responsibilities, Aleong added. While Liat has already had a round of
job cuts, BWIA is holding its hand on any layoffs for now, he said  From
1016 employees in 1999, Liat has cut its workforce down to 720. This
number, Cullen said, had to be reduced to about 650 and the company is in
negotiations with employees unions.  Last year, Liat issued a bond in
Barbados to raise money to purchase new Dash 8s and to offer severance
packages for those employees who took voluntary retirement.


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