Janet Silvera, Senior Tourism Writer

Dr. Jean Holder, chairman of LIAT. - File

San Juan, Puerto Rico:

After one year of merger negotiations, LIAT is closer to signing with regional carrier Caribbean Sun and by the end of November it is expected that its accumulated debt of EC$350 million (US$130 million) will be wiped clean.

LIAT, which operated in the red for years and had to be bailed out by the shareholder governments on several occasions, was able to reverse losses of EC$61 million (US$22.7 million) in 2006, to just about EC$3 million (US$1.1 million), the airline's chairman, Dr. Jean Holder revealed yesterday.

LIAT, falls under the umbrella of three major shareholders, Barbados, Antigua and Barbuda and St. Vincent and the Grenadines.

Speaking with The Gleaner at the 30th Caribbean Tourism Conference (CTC-30) now on in San Juan, Puerto Rico, Dr. Holder said he hopes to sign the deal with Texas millionaire R. Allen Stanford, owner of Caribbean Star and the defunct Caribbean Sun within days.

"All terms have been agreed on and as a result of the alliance both airlines were able to remove the suicidal competition that ensued before we signed a commercial agreement in February," explained Dr. Holder.

The term 'suicidal competition' was coined shortly after the commencement of fierce rivalry between the two airlines and the flooding of the market with flight capacity exceeding the demand.

LIAT with 51 years under its belt and which serves 22 destinations daily, transporting some 750,000 passengers annually, almost had its name placed in bankruptcy court, when Caribbean Sun and Star entered the region operating 30 thirty-seven-seater Dash 8s.

By entering the commercial agreement in February, both airlines were able to downsize the fleet to suit the demand, Dr. Holder said. LIAT has since restructured and Caribbean Sun was closed. He added: "With the merger, the agreement is that Caribbean Star will close once the parties have signed off, and we will be buying all their assets."