This was disclosed by Prime Minister Dr. Ralph Gonsalves at a media briefing held on January 12. Dr. Gonsalves had just returned from a meeting held in Antigua/Barbuda between Principal Shareholders of LIAT and Texas billionaire and proprietor of Caribbean Star, Sir Allan Stanford.

St.Vincent and the Grenadines, Barbados and Antigua/Barbuda are major shareholders in LIAT and have been fighting to keep the ailing regional carrier in the skies.

According to Dr. Gonsalves, Sir Allan Stanford wanted to get out of the airline business after realising an undisclosed amount of financial losses. He said that the alliance would also see the servicing of LIAT debt, which he said, is approximately US $55 million.

He told journalists that there was also another proposal from Caribbean Airlines, formerly BWIA. The PM stated that this proposal, while it had merit, did not address effectively the settling of the debt of LIAT. He however said that a working alliance between LIAT the Star of the Caribbean and Caribbean airlines would have to be looked at.

The code that will be used on the 16 aircraft will be LI. LIAT will man 10 aircraft with Caribbean Star controlling 6. Two planes will be in reserve.

With respect to the LIAT's debt, the PM said LIAT owes the Export Development Company of Canada US$41 million for the acquisition of three planes, interest and penalties. It also has outstanding debt with the Antigua Commercial Bank and some other suppliers of spare parts and rental of planes.

Dr. Gonsalves said a Committee has been set up to assist with the establishment of the new airline. This country's representative on that Committee is Isaac Solomon. The governments of Antigua/Barbuda and Barbados are also represented on this committee.

He said a sub committee would also be set up to deal with the Trade Unions to address any severance issues, if necessary.