CARIBBEAN Island officials revive call for airline merger

A merger would trim costs and keep planes flying, proponents say.
PORT-OF-SPAIN, Trinidad (AP) -- With tourism in a slump, politicians are reviving an old argument to merge the Caribbean's major airlines.
A worldwide economic slowdown and flying fears after the Sept. 11 terrorist attacks have decreased tourism arrivals to the Caribbean by 10 percent in the past year, according to the Caribbean Tourism Organization, which represents 34 member countries.
Three of the largest airlines -- Antigua-based LIAT, Air Jamaica and Trinidad-based BWIA -- have reported millions of dollars in lost revenues, prompting regional leaders and industry officials to call for a merger to cut costs and keep the planes flying.
Airlines' response
The three airlines, which are all at least partially state-owned, have said they are restructuring and will soon return to profitability.
But "there can be no rejuvenation of Caribbean tourism without the simultaneous reinvention of Caribbean air transportation," Bahamian Premier Perry Christie said recently at a tourism conference.
Trinidad has launched a new study into whether an airline merger would be profitable or even possible.
American Airlines, the Caribbean's largest carrier, controls 70 percent of the region's $1 billion air travel market but is struggling to cut costs after large losses. Its Fort Worth, Texas-based parent company, AMR Corp., announced last week that regional subsidiary American Eagle was planning to sell Caribbean carrier Executive Airlines to Puerto Rican hotelier Joaquin Bolivar.
One concern for Caribbean businesses and residents is that declines in air service could leave some destinations cut off from tourists and much-needed revenue.
In recent years, American had demanded that some smaller islands pay to ensure air service. In 1999, St. Lucia refused to keep paying a $1.7 million annual subsidy and turned to Air Jamaica, which doubled the number of flights without a subsidy.