ALLIANCES

Last updated: 2004-12-01

Introduction

This document summarises major alliances concerning Caribbean carriers.

CaribSky

Following discussions from October 2000 between LIAT, WINAIR and Air Caraïbes (BWIA was invited to join the discussions but declined), the CaribSky alliance was launched on 08JAN01 by the three airlines plus Tyden Air and Caraïbes Air Transport. Essentially, this alliance is about how the airlines can collaborate on the 32 airports they serve in order to cut costs and increase revenue. A key component of the agreement is that the partners should focus on their routes from their home bases and feed traffic to alliance members. So, the following bases were established:

One consequence of the alliance has been the axeing by LIAT of its flights to Fort-de-France and Point-a-Pitre and replacing them with flights operated by Air Caraïbes. Another was the termination of its services into St Vincent and Union Island out of Martinique by Air Caraïbes. This was a blow to St Vincent which had expected the merger of airlines into Air Caraïbes to increase traffic to its country, and followed a drastic drop in traffic following the axeing of American Eagle flights in January 2001.

The alliance is hampered, however, by having three incompatible reservations systems.

BWIA/LIAT

On 16NOV00, BWIA and LIAT signed a memorandum of understanding to enter into a comprehensive strategic alliance to increase the opportunities for the airlines to offer joint competitive and cost-effective air transportation services. Both carriers said that there were tangible and significant benefits to be derived from harmonising their flight schedules and services, eliminating inefficiencies, optimising the use of resources and combining the strengths of each. It was also noted that the airlines were aiming to improve the quality of the interline air transportation they now offered. And through a series of initiatives, they plan to provide the Caribbean with new and enhanced service options and further alternatives designed to facilitate the easy flow of passengers and cargo in the region and internationally, thereby increasing overall revenues and reducing costs.

This alliance, however, has not resulted in the demise of BWIA's BWee Express which competes with LIAT, nor was it a help in LIAT's establishment of its single reservations centre in Port of Spain (BWIA was not chosen to provide the service).

On 08JAN02, the two airlines announced their alliance, claiming to have overcome their mutual distrust and different cultures which had prevented close co-operation for decades. The major purpose of the alliance is cost reduction, made more urgent since the events of 11SEP01, through joint purchasing and sharing of many services in other areas, as well as increased revenue through marketing both airlines as one in all their destinations. It is intended that passengers will benefit through integrated schedules and better baggage handling. The agreement takes effect on 01MAR02, following the code-sharing agreement to be signed later this month.

Neither airline has invested in the other.

This new alliance is due to start on 15JUL02, having implemented a merger of commercial departments, codesharing, through fares and rearranged schedules. Still to come are merged procurement and airport management.

GoCaribbean

03JUN02 GoCaribbean, a new cooperation and marketing initiative with three regional Caribbean airlines -- Caribbean Star Airlines, Nevis Express and WINAIR -- was announced today by US Airways. The initiative will include affiliation through the US Airways Dividend Miles frequent traveler program, US Airways Vacations and, in some markets, code sharing. US Airways is currently finalising agreements that will enable the three airlines to operate as US Airways associate carriers, providing flight connections linked with existing US Airways Caribbean gateways.

GoCaribbean plans to offer additional service to 14 island destinations, representing further major growth of US Airways's Caribbean network. Currently, US Airways serves 15 Caribbean destinations from Philadelphia, Charlotte, Pittsburgh and LaGuardia, and has recently announced plans to add three more routes. Caribbean Star, Nevis Express and WINAIR together intend to provide convenient connections linking four US Airways destinations -- Antigua, Barbados, San Juan and St Maarten -- with the following Caribbean points: Anguilla, Antigua, Dominica, Grenada, Nevis, Saba, St. Barthelemy, St Eustatius, St Kitts, St Maarten, St Vincent, St Lucia, Tobago and Tortola. The GoCaribbean initiative will start on 15JUL02 with services provided under a code share agreement with Nevis Express linking San Juan with St Kitts and Nevis. Other elements of the GoCaribbean program are expected to be added during the summer and fall this year. US Airways intends to operate services from San Juan to St Maarten, St Kitts and Nevis under a code share agreement with Nevis Express. Nevis Express, based in Nevis, intends to operate flights connecting with US Airways's San Juan and St Maarten gateways using 19-seat Beech 1900 aircraft.

Caribbean Star, based in Antigua, intends to operate flights connecting with US Airways Antigua, St Maarten and Barbados gateways using 37-seat Dash- 8-100s and 50-seat Dash-8-300s.

WINAIR, based in St Maarten, intends to operate flights connecting with US Airways's St Maarten gateway using 19-seat DeHaviland Twin Otter aircraft.

Details of fares, destination options and flight schedules available through GoCaribbean will be announced shortly.

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Copyright © 1999, 2000, 2001, 2002, 2003, 2004 Roger Chung-Wee
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