Caribbean Sun Airlines Announces Shutdown.

San Juan-Santo Domingo Service Ends Jan. 16, 2007; All Remaining Flight Operations End Jan. 31, 2007

FORT LAUDERDALE, Fla. -- Caribbean Sun Airlines (www.flycsa.com) announced today a two-phase shutdown of all flight operations. Phase one consists of the termination of all Caribbean Sun flights between San Juan and Santo Domingo. The final day that Caribbean Sun will operate flights between San Juan and Santo Domingo is January 16, 2007. Phase two consists of the termination of all remaining Caribbean Sun flight operations and the closure of the airline's operational hub at Luis Munoz Marin International Airport in San Juan, Puerto Rico. Caribbean Sun's final day of flight operations is January 31, 2007.

Caribbean Sun passengers holding confirmed tickets for travel between San Juan and Santo Domingo after January 16, 2007, or tickets for travel to/from all other Caribbean Sun gateways after January 31, 2007 will be re-accommodated on alternate service operated by Cape Air, Caribbean Airlines (formerly BWIA) or LIAT. In cases where alternate service cannot be arranged, passengers will be issued full refunds. Passengers are encouraged to call Caribbean Sun at 1-800-723-1111 for further details.

Skip Barnette, president and CEO of Caribbean Sun and its sister carrier Caribbean Star, commented on the Caribbean Sun shutdown, saying: "Competition in San Juan has always been very tough, but recent developments have created a no-win situation for us. Major U.S. carriers currently expanding service to the region are increasingly emphasizing nonstop service. The trend toward 'over-flying' San Juan has greatly diminished the strong demand we formerly enjoyed from connecting passengers. The local market is simply too small to sustain a profitable operation."

Another factor in the decision to shutdown Caribbean Sun is the recent re-certification of its sister carrier, Caribbean Star Airlines, under new Civil Aviation Regulations passed in Antigua and Barbuda by the Eastern Caribbean Civil Aviation Authority (ECCAA). In March 2006, the ECCAA was upgraded to Category One status by the U.S. Federal Aviation Administration (FAA). In October 2006, Caribbean Star was re-certified under the new regulations, enabling the carrier to consider broader expansion opportunities, including possible new service to U.S. destinations.

"When Caribbean Star was launched in 2000 it could not serve San Juan and other U.S. destinations, which of course hindered growth," said Barnette. "Caribbean Sun was later launched as a completely separate U.S.-based airline to complement the Caribbean Star operation with its ability to hub out of San Juan and attract what was then a stronger market for connecting passengers. Now that Caribbean Star has the same advantages, we can realize some efficiencies and better focus our efforts."

Caribbean Sun employs a staff of 215, the majority of whom (85%) are based at the airline's operational hub in San Juan, Puerto Rico. A total of 32 Caribbean Sun staff are based at the airline's corporate headquarters in Fort Lauderdale, Florida. Additional Caribbean Sun staff are based in destinations served by the carrier. A total of 195 employment positions will be eliminated as a result of the airline shutdown.

"It's a sad day for us and for Caribbean aviation in general. It's a sad day for our passengers. But, most of all, it's a sad day for our dedicated staff who fought hard to build a great airline. I'd like to extend my sincerest thanks and appreciation for the sacrifices you made and the professionalism you exhibited in building the Caribbean Sun brand over the past few years," added Barnette.

The Caribbean Sun fleet is comprised of four Dash-8 100 series aircraft, each with a 37-passenger seating capacity. The carrier serves nine gateways throughout the Caribbean with more than 161 weekly flights.

"Discussions are ongoing with additional interested parties toward deciding what will happen with Caribbean Sun aircraft and other assets," said Barnette.

About Caribbean Star Airlines and Caribbean Sun Airlines

Privately held Caribbean Star Airlines Limited was incorporated in Antigua in January 2000. Its sister airline Caribbean Sun Airlines Inc., based in Fort Lauderdale, Florida, launched its maiden flight in January 2003. Caribbean Star Airlines Limited and Caribbean Sun Airlines Inc. are affiliated but separate companies. The air service provided by each carrier is operated independently of the other, and the rules applicable to travel on each airline may be different. More information about Caribbean Star and Caribbean Sun is available at their respective websites, www.flycaribbeanstar.com and www.flycsa.com.