Virgin boss interested in regional airline

Virgin Atlantic chairman Richard Branson has expressed an interest in a regional airline, St Vincent Prime Minister Dr Ralph Gonsalves said yesterday. Gonsalves, who was addressing the Chamber of Industry and Commerce at Crowne Plaza, said Branson had written to him expressing his interest and also wrote to Trinidad and Tobago Prime Minister Patrick Manning. A committee has until June to submit to Caricom a plan for the formation of a single airline which will comprise BWIA and LIAT. International Finance Corporation (IFC) will also be involved in the new airline. Gonsalves said air transport is key to regional integration and so the current problems faced by BWIA and LIAT are small compared to the bigger need for transportation.

Both LIAT and BWIA have found themselves in severe financial difficulties. BWIA is now in talks with its aircraft lessors to keep flying while it waits for a $116 million bailout from Government. LIAT, which received assistance recently from regional governments, owes about EC$200 million. Gonsalves included $52 million in severance if the airline was to close. Of the total, US$70 million is owed to the Canadian Export Development Corporation (ECD). Gonsalves said EDC officials will be coming to the Caribbean soon to discuss debt forgiveness.

St Vincent, which gave $2.5 million to the airline, has a 10 percent stake in LIAT and Gonsalves said he wants a bigger stake in a regional airline. Trinidad and Tobago pledged a $12.5 million line of credit as a basis for borrowing by other governments to help the airline. Gonsalves said it was important to keep LIAT in the air, although some people have said the airline should be closed. He also knocked Caribbean Star boss Allen Stanford. “Some who come into the region with very deep profits and engage in predatory pricing to run other airlines into the ground,” he said. He also said that no other region would allow a foreign airline to control its transportation. He said he welcomes competition but was sure that if LIAT were allowed to fail, Caribbean Star, would increase its price.