Trinidad and Tobago’s long-struggling flag carrier BWIA West Indies Airways within months will close down operations to be replaced by a new operator, Caribbean Airlines.

The move follows years of financial losses at BWIA, and a recent impasse in concessions talks between the carrier and its unions, which threatened its planned reorganisation.

Under the plan announced last week, Trinidad’s government - which owns over 97% of BWIA - has approved “a substantial capital injection” to facilitate the creation of Caribbean Airlines, which like its predecessor will be based at Trinidad’s Piarco airport.

BWIA will continue uninterrupted service while management transitions to Caribbean Airlines, which is expected to launch regional and international flights in early 2007.

Eligible BWIA employees will be offered separation packages and will be given the opportunity to apply for positions with Caribbean Airlines. However, BWIA notes that the new packages “will be competitive within the current airline market”.

All tickets already purchased for travel on BWIA will be honoured by Caribbean Airlines and frequent flyer memberships will be transferred to the new airline.

“We are looking to the 21st century whilst being empathic to our historical past; determination, passion and focus will allow us to build a future and respond honorably to the loyalty that customers have demonstrated over the years,” says BWIA chief executive Peter Davies, who took the helm at the financially ailing operator earlier this year.

He says Caribbean Airlines’ services will reflect the needs of the communities within the Caribbean.

Charged with spearheading BWIA’s turnaround, Davies says the mandate he received from the government, through BWIA’s board of directors, allowed management to recognize the dynamic changes that are affecting the global airline industry and to position Caribbean Airlines in an ever increasing competitive market.

This includes extending engineering capabilities beyond the carrier’s own fleet to include heavy maintenance and repair checks on other carrier’s turboprop aircraft.

According to Flight's fleet databse ACAS, BWIA operates a fleet of two Airbus A340s and seven Boeing 737-800s. All but two aircraft are leased from International Lease Finance.

BWIA also owns 45% of Tobago Express and provides maintenance support for the carrier’s Bombardier Dash 8 fleet that operates on short-hop airbridge services between the islands of Trinidad and Tobago.

Further details on Caribbean Airlines will be released during the next few weeks. A detailed communication will be issued to shareholders, says BWIA.