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Consolidation still on Caribbean agenda

Newly-minted Caribbean Airlines chief executive Ian Brunton is ready to ignite long-called for consolidation in the region, if the opportunity arises to enlarge its footprint through joining forces with another airline.

Brunton brings an entrenched knowledge of the region to the post through a 47-year career that includes senior positions at Caribbean's predecessor BWIA West Indies Airways. He latterly served as Caribbean's operations chief.

He has no plans for a big overhaul of Caribbean, after profits in 2007 and 2008,but says it is constantly seeking consolidation and growth opportunities."You have seen the reports for our bid for Air Jamaica," he says. "Had this gone through, it would have grown our operations significantly."

Former Caribbean chief executive Philip Saunders believes the economic uncertainty could usher in some consolidation over the next couple of years. Governments and airlines in the Caribbean are examining how to supply sustainable lift, and Saunders thinks awareness of consolidation benefits could be growing.

Having missed a potential consolidation opportunity with Caribbean, Air Jamaica continues talks with another party interested in acquiring the carrier. Air Jamaica chief Bruce Nobles says the parties involved are working to finalise a deal, but no definitive timeline exists.

As Nobles and Air Jamaica's executive team deal withuncertainty surrounding Air Jamaica's ownership, they can boast of staving off loses of nearly $15 million per month, and celebrate achieving their break even targetsfor the second half of 2009.Most of the improvement is attributed to optimising Air Jamaica's schedule and fleet, which has fallen from 15 Airbus narrowbodies to eight.

But this is only part of the solution. Nobles says it needs balance sheet strength that only a new owner can provide, but Air Jamaica's huge $1 billion debt level is a deterrent to potential investors. The government has agreed in principle to assume the debt, some of which requires payment in cash fairly quickly.

While Air Jamaica plays a waiting game with respect to its ownership, Brunton says one of hispriorities is protecting the airline's markets from increasing competition. "Our success has sent the message that there is money to be made in Caribbean aviation, once you strike the right combination of service and operational efficiency," he says.

For more on Caribbean aviation check out former LIAT chief executive Mark Darby recent review of his time in charge of the Caribbean regional



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