Trinidad bails out BWIA again

Trinidad will inject 10 million dollars into BWIA and exchange 30 million dollars in debt for equity in the latest bailout of the airline, and it will also provide Eastern Caribbean $6.3 million dollars in loans to Caribbean governments that hold shares in LIAT airline to assist that cash-strapped carrier.

The debt-for-equity swap could result in Trinidad´s government increasing its 33.5 percent share in BWIA. The government will ask private shareholders to participate in exchanging debt for shares, but may do it alone if they refuse, Trade and Industry Minister Ken Valley said.

The 10 million dollars the government will provide will be used to pay off various debts, Valley said.

BWIA has struggled since the Sept. 11, 2001, attacks in the United States, which caused a sharp drop in passengers and higher insurance and security costs. A weakened global economy and the war in Iraq prevented a quick recovery by keeping fares low, company officials say.

Last year, the government stepped in to assist when a leasing company seized two of BWIA´s jets and the airline was near bankrupt with total debt of about 100 million dollars.

The Trinidad government continues to support the airline because it considers it strategic to developing trade ties in the region, Valley said. The government also wants to have a Trinidad-based airline as it lobbies to host the headquarters of the proposed Free Trade Area of the Americas, a 34-nation hemispheric free-trade zone being negotiated.

Consultants have been looking for ways to restructure BWIA to make it profitable again. The government will get an interim report in a couple of weeks and a final report at the end of May.