January 26, 2007
LIAT, Caribbean Star air fares to go up

by Patricia Campbell 26.JAN.07

Chief Executive Officer of LIAT Mark Darby has indicated that the average fares of flights operated by Caribbean Star and LIAT will go up as of February 1, when a commercial arrangement between the two airlines goes into effect.

Speaking at a press conference in Antigua on Tuesday, Darby said fewer seats would be available at some of the lower prices that the airlines have been offering during their price war.{{more}}

“In the past, fares would typically go up the closer to the day of departure…or the more demand there is on a particular flight. The quicker they fill up, the prices go up. That’s still going to be the way we operate.

“The (fare) bands that we operate within are still going to be the same bands, but we will be offering less capacity, less seats at the cheaper end of the market so there’ll be less of the super low fares that you’ve seen in the past and more of the more expensive ones,” he explained.

Asked whether the new LIAT will aim to be a low cost carrier, Darby replied that, as an airline manager, he envisions a low cost airline, one that has low costs and not simply low fares.

“I think that’s been the difficulty we’ve had in the past. We offered some super low fares, very, very low fares, to the market. Unfortunately, we just didn’t have the cost base to match. That’s defying economic gravity and that’s why we are where we are today,” he said.

Darby explained that the need to change their financial strategy stems from the fact that the airlines have been haemorrhaging money over a period of years. On average, he said, LIAT and Caribbean Star have been forced to subsidise the passengers they transported in 2006 to the tune of US$70 per round trip passenger.

“We just, frankly, can’t afford to continue subsidising or supporting our passengers to that sort of level. It’s an enormous amount of money. We’ve made huge losses and clearly that had to stop,” he said.

The airlines said the commercial arrangement would help to minimise the financial losses associated with duplicating flights on established routes. As an added benefit, the LIAT CEO said merging services would allow more routes to be covered between the two carriers, a total of 22 markets.

Implementing the initiative from 1 Feb., will also allow time to settle into new routines before intra-regional travel associated with Cricket World Cup 2007 picks up in March. (Antigua Sun)