by RICKEY SINGH

"TOTALLY ABSURD TALK."

That was the immediate response yesterday of LIAT's chairman, Jean Holder, to Friday's outburst by Caribbean Hotel Association's director-general and chief executive officer, Alec Sanguinetti, against the merger between regional carriers Caribbean Star and LIAT.

In addressing Friday's annual meeting of the Caribbean Society of Hotel Association Executives, at the Barbados Hilton Sanguinetti fiercely denounced the LIAT/Caribbean Star merger as "the worst thing" to have happened for the region's tourism industry.

He said the merger could "destroy" the vital tourism sector. Increased costs

In turn, Caribbean Tourism Organisation's secretary general, Vincent Vanterpool-Wallace, had earlier contended that while the LIAT/Caribbean Star merger did not translate to "a monopoly", it would have the effect of seat reductions and increasing costs of regional travel.

Holder, however, said both Sanguinetti and Vanterpool-Wallace had advanced "very surprisingly absurd arguments".

The LIAT chairman said Sanguinetti's "self-serving" contention deliberately overlooked the "exorbitant rates" imposed by the hotels with Cricket World Cup 2007 in mind, and even some prevailing rates that would be way above increased rates for regional air travel.

So, why this attack on just air fares? The hotel industry, he said, did not have to face the challenges of the region's airlines, which include objective factors of fuel cost, over which they have absolutely no control, as well as in having to compete in a demanding pool for skilled, experienced pilots whose services are always in demand by airlines, regionally and internationally.

Unlike the hotels, which benefit from various forms of subsidy – including tax concessions – LIAT did not get any subsidy, but had to cope with the burden of accumulated debts, he said.

That burden, which stood at a massive EC$311 million when he assumed the chairmanship, said Holder, had often been temporarily eased with financial interventions, "not subsidies", by its sharehoder governments, primarily Barbados, Antigua and Barbuda, and St Vincent and the Grenadines. Merger necessary

"If the merger did not take place then, by now either LIAT or Caribbean Star would be out of operation," he stressed, adding:

"Sir Allen Stanford may have been able to survive the escalating losses, possibly in cooperation with a foreign carrier, for some time. But it had become palpably clear to its management and shareholders that the two airlines could not continue with their operational losses."

In the same way that hotel rates vary between the winter and summer seasons, said Holder, there were also the "high and low" seasons for regional air travel.

It was simply a matter of economic management in adjusting rates to take care of the periods when there would normally be a fall-off in passengers. 'Nonsense'

In stoutly rejecting the reported claims by Sanguinetti and Vanterpool-Wallace linking declining hotel occupancy with sharp hikes in air fares by regional airlines, Holder said it was "utter nonsense" to project the merger of LIAT and Caribbean Star as either "the worst thing" to happen for the tourist sector or that the jacked-up cost in air fares represented "the silent killer" of regional tourism.

Existing air fare structures, merger arrangements between LIAT and Caribbean Star, as well as a move by St Lucia to have American Eagle providing inter-island services, starting between that country and Barbados, are expected to be among issues for discussion at the 23rd meeting of CARICOM's Transportation Ministers tomorrow in the Vincentian capital, Kingstown.