Caribbean nations assist two airlines

Struggling to fight off the tourism slump and preserve control over air routes, Caribbean governments are bailing out two of the largest regional airlines.

Jamaica wants to double its stake in stumbling Air Jamaica, and could grow to hold a majority of the shares, Finance Minister Omar Davies said this week. The once state-owned airline lost $90 million last year. New bookings have fallen 40 percent since war was declared in Iraq, said Allen Chastanet, vice president for sales and marketing.

Meanwhile, Trinidad and Tobago -- the twin island nation that controls 39 percent of the carrier known by its initials BWIA - will loan the airline $18 million to stay afloat.

Both airlines already have reduced flights from South Florida. The largest cutback was in Fort Lauderdale-Hollywood International Airport, where Air Jamaica cut one of its three daily flights. The

airline´s four daily Miami International Airport flights remain mostly intact, though one will fly four days a week instead of seven.

BWIA has lost only 11 percent of its reservations since the war began, mostly investors who stoped flying to Port-of-Spain to do business in Trinidad´s lucrative oil and natural gas industry. But the

airline also had to slash fares to compete with Continental and American Airlines, spokesman Clint Williams said.

´´There were two things at the same time, we got a double whammy,´´ Williams said.

Unlike the tourist-based Air Jamaica, more than half of BWIA´s South Florida customers are West Indians and others going to the islands to visit friends and relatives.

Caribbean airlines have been struggling since the Sept. 11 terrorist attacks.

Officials also have announced they are considering merging BWIA with the smaller, Antigua-based LIAT, which travels solely between islands. BWIA already owns 29 percent of LIAT and handles its customer service calls and other functions.

Regional leaders have contemplated forming a true regional airline, one that would includes BWIA, LIAT and Air Jamaica, but so far Air Jamaica has rejected the idea.

Under the current proposal for Air Jamaica, the government of Jamaica is negotiating a debt-for-equity swap, which would mean swallowing $300 million in debt to increase shares to 45 percent. The rest of Air Jamaica´s shares are held by a group of investors led by Sandals resorts owner and Air Jamaica Chairman Gordon ´´Butch´´ Stewart.