After experiencing significant losses and route duplication as a result of a “ruthless price war”, two of the Caribbean’s dominant airlines decided to merge in an effort to provide more efficient service.
Mark Darby, Chief Executive Officer of Liat Airlines made the point at a travel industry briefing on Thursday at the Roraima Residence Inn, Bel Air. The commercial alliance between the two airlines came into effect on February 1. Darby stated that Liat (1974) Ltd. and Caribbean Star Airlines have been competing against each other for the last seven years. Therefore the two service providers decided to stop competing and form one airline to better serve the region.
The “ruthless price war”, Darby said, meant it was difficult to make money and each airline lost a lot. For every ticket sold, said the CEO, US$35 was lost. While this was great for the flying public as the two airlines offered so much capacity that it was easier for persons to move around the region, it was unsustainable for the airlines.
Operating together allows for more choice and better connections with larger airlines, Darby said. The commercial agreement it was stated means that the two airlines have now formed one unified business with Liat controlling most of the flights in the northern Caribbean, while Caribbean Star would handle the southern ports and they would both overlap in the middle.
After the agreement was made in December it was decided to push the service out to the region in time for the Cricket World Cup. This, Darby said, was because of the importance of having a schedule set up so that whatever problems came up could be resolved. The new schedule has eliminated competing routes and duplication hence a reduction in stops for the longer flights.
The merged airlines control 18 Dash 300 and 100 aircraft, similar to each other with the capacity to carry 35 to 50 passengers. There are also spares, the CEO said, allowing for charters and additional capacity for CWC.
He said there are 22 markets that would be served by the airlines, “every island destination between Guyana and San Juan.” There is also a recently added route to Curacao via Port-of-Spain and Tobago.
The flight code for the new merged airline would be LI, which is really the Liat flight code. However, said the CEO, this decision was made because Liat is registered to fly to US territories.
For bookings Navitaire is the programme being used by the airlines allowing potential passengers to book flights online at www.liatairline.com or www.flycaribbeanstar.com. Options for making flight arrangements are also available at travel agents, reservation call centres for both lines and Liat ticketing offices.
It was noted also that passengers could approach Liat airport counters for check in at 20 of the 22 destinations. The exceptions are Curacao and Tobago where passengers would use Caribbean Star counters. Signage would be good allowing for passengers to identify the LI code and counters.
The airlines are also offering a limited baggage policy. Cabin baggage should have a maximum weight of 15 lbs/6.8 kgs and checked baggage a total of 50 lbs./22.7 kgs. The companies at this point are operating as two separate companies so staff levels would not be affected, the CEO said. When the merger has been finalized a decision would be made as to who would be kept.
Promotions offered by the merged airline include a new improved frequent flyer programme, and tour operators would be asked to add tours to Guyana. This, he said, would be interesting for European tour operators as Guyana has great potential as an eco-tourism destination.
In terms of their physical image the airlines would not be repainted at the moment because the exercise is costly but they would be having a fresher, cleaner look. The airline would now be flying under the head Liat-Star of the Caribbean until the merger is finalized later in the year.
