BWIA seeks fleet renewal funds

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Paul Lewis/ORLANDO

BWIA West Indies Airways will shortly move ahead with the first of two planned $75 million initial public offerings (IPOs) to help fund its fleet-renewal programme, including the acquisition of a new long-haul type to replace its Lockheed L-1011 TriStar 500s.

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The carrier is also seeking approval for a codeshare tie-up with United Airlines in an initial step towards participation in the Star Alliance.

"We've started the process to float a $15 million IPO on the Trinidad and Tobago stock market. That's a stopgap measure. We need to replace our TriStars and we want to go to the Nasdaq in 2001," says Conrad Aleong, BWIA's chief executive.

The local share placement will count for 20% of BWIA's stock and will be used for Boeing 737-800 spares, infrastructure improvements and provide some working capital. "We want to clean up and get a healthier balance sheet. The $15 million IPO will take care of that," adds Aleong.

The second $60 million offer will be used to fund BWIA's replacement of its four ageing TriStars. It aims to decide in the last quarter of the year, with the evaluation focusing on the Boeing 767/777 or Airbus A330/A340. It plans to order a "minimum of two, possibly three aircraft" using direct purchase and lease financing.

The Caribbean carrier has taken delivery of three of the six 737-800s it has on lease from International Lease Finance, with the rest to arrive by the end of the year. BWIA is seeking a buyer to acquire its four tri-jets in a sale/lease-back deal until the new widebodies can be delivered. "There are a lot of buyers in the market right now and this is the time to do it," says Aleong.

Linked to BWIA's refleeting are plans to strengthen its international partnerships. As a first step it has applied for US approval to codeshare with United on its flights from the West Indies to Miami, New York and Washington DC. It also wants to codeshare on United's Miami-Chicago, Washington-Boston, Chicago, Denver and New York services.

The airline wants to reduce its 70% dependence on local origin traffic and counter American Airlines' regional presence. "There is a definite need for an alliance and United is the perfect partner as they are not flying here and we give them the whole of the eastern Caribbean," says Aleong.

Aleong sees a "junior role" in Star for BWIA and says more talks with Air Canada are planned for October, while interest in British Midland is also being expressed.

"It's one step at a time. I think we can play a useful role for them in our part of the world," Aleong adds.