Nov 2006 Financial News

Airline’s shareholders to get nothing

Nov 28, 2006

Caribbean Airlines will not be listed on the local stock market as BWIA was, according to the airline’s chairman Arthur Lok Jack.

The new entity, which will be launched on January 1, will begin with a clean slate, Lok Jack told reporters at a function to launch a re-branded Boeing 737 yesterday

BWIA was 97 per cent owned by the Government.

The Government has already injected more than US$250 million for BWIA’s restructuring. In June, Cabinet approved an additional US$100 million to meet the equity injection and recapitalisation of the airline.

BWIA’s shares were suspended by the Stock Exchange last November at the request of its board of directors for a three months period.

The Securities and Exchange Commission said it had received a request from the Stock Exchange to delist the company because it had not been providing financial statements

The formerly cash-strapped airline would be delisted from the stock exchange, said Lok Jack, with a future option to list Caribbean Airlines.

Chief executive, Peter Davies, said he did not know of Government’s plans for divestment.

“As far as I know they are the shareholder and remain the shareholder. My business is to make sure they have a profitable airline.”

PNM party chairman, John Donaldson, had said BWIA would be divested, but Davies did not want to speculate.

He said they were advertising through the media and had a major advertising campaign for year-end.

Caribbean Airlines will spend $4 million in marketing to “make sure Caribbean Airlines is in a position where we can put the country on the airline market,” said Davies.

He said the company had already received 20,000 job applications and were sorting them out.

Last week, Caribbean Airlines announced that it would be pulling out of its London routes from March 27 and is trading in its valuable Heathrow spots to British Airways (BA) in favour of a code-sharing agreement with BA to Gatwick.

The airline could no longer afford to operate the London route for reasons of cost and conditions relating to the aircraft, director of Corporate Affairs, Dionne Ligoure had indicated.

“New routes are already under review together with a more effective intra-Caribbean network linked into worldwide destinations,” it said in a press statement yesterday.

“More than competing for existing traffic in the region, Caribbean Airlines is interested in creating demand. A fresh approach to pricing and fare structures will help to achieve its aim to become the number one carrier in the Caribbean. Extra flexibility will be important, for instance, flying one-way economy and returning in business class; discounts for senior citizens, children and students are just some examples of how the airline will reflect customer requirements,” it said.

Asha Javeed
The Trinidad Guardian
Tuesday, November 27, 2006.
http://www.guardian.co.tt/business1.html