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Air Shot

Regional governments to pump $5M more in LIAT

Barbados and the three other LIAT shareholder governments today agreed to stick with their February 13, 2015 restructuring plan designed to keep the financially struggling airline from collapse.

The Governments of Antigua and Barbuda, St Vincent and the Grenadines and Dominica, joined Prime Minister Freundel Stuart in deciding not to back out, despite the losses being incurred by the airline, but to invest a further $5 million in short-term capital.   

Following a four-hour shareholders meeting at Hilton Barbados, chairman of the shareholder governments, Prime Minister Dr Ralph Gonsalves of St Vincent & the Grenadines, told Barbados TODAY that while LIAT was benefiting from that short-term cash injection, management of the company would try to secure a new loan of an unspecified sum from the Caribbean Development Bank (CDB).

Prime minister Dr Ralph Gonsalves

Prime minister Dr Ralph Gonsalves

Gonsalves said the money was for working capital and developmental needs. Describing the meeting as very fruitful, he stated: “We reconfirmed our decisions of February 13 for restructuring in accordance with the plan laid out by the management which was approved by the board of directors.”

“We also got a report where there was a satisfactory progress in the implementation of the plan…the restructuring plan. We took some decisions that the management would work actively with the CDB to see if we can get a particular request go to the board of the CDB for the middle of July, and in the meantime we would provide further short-term capital – the shareholders – in the aggregate of $5 million,” he added.

Gonsalves touched briefly on the contentious issue of high air fares by LIAT for travel within the region.  The outspoken prime minister said the real problem was the taxes which the various governments have imposed on basic ticket prices. “That’s a significant issue and that has to be dealt with by our governments,” he emphasized.

The LIAT shareholder governments chairman said the meeting also examined the retrenchment of staff, severance payment arrangements and the disposal of the old fleet of Dash-8 aircraft.  Gonsalves declined, however, to elaborate on these matters.   

Gonsalves and Stuart were the only two prime ministers of the four shareholder governments attending today’s meeting.  The other shareholders were represented by high ranking officials that comprised Antigua and Barbuda’s Minister of Transport and Public Utilities, Robin Yearwood and Rosemond Edwards from Dominica’s Ministry of Finance.

St Lucia and St Kitts and Nevis, whose leaders had earlier expressed an interest in buying equity in LIAT and were invited to attend, did not turn up. Among other top officials present included Barbados’ Minister of Tourism and International Transport Richard Sealy and chairman of the airline’s board of directors, Dr Jean Holder.

The move to increase LIAT’s shareholder base comes against the backdrop of a new study on Making Air Transport Work Better for the Caribbean, which has revealed that LIAT, Caribbean Airlines and Bahamas Air were consistently recording losses of about a billion US dollars collectively.

The study, which was carried out between the last quarter of 2014 and March 2015, stresses the need for greater co-operation among regional governments and carriers, including foreign airlines, as well as harmonization of administrative and regulatory policy and operations.

It also calls for the setting up of “a ‘quick-wins’ CARICOM-centric Airlines Association to share best practice and identify cost reduction and revenue enhancement opportunities that could be pursued jointly”.

5 Responses to Air Shot

  1. Michael May 23, 2015 at 5:29 am

    If Caribbean governments are one of the maIn culprits contributing to the high airfare, why aren’t Caribbean people not taking out their frustration on them. And why are these same governments lamenting about the same high airfare. Are the tail wagging the dog Here?

  2. Nathaniel Anderson May 23, 2015 at 9:20 am

    Why can’t the governments discount all the taxes by 50% just for six months and see if there is an increase in air travel or if things remain the same? We must try to do something to increase business activity in the region and travel is one activity that will spur on other sectors.

  3. James Lynch May 23, 2015 at 9:46 am

    That’s right, Comrade, don’t FIX it, just keep throwing taxpayer money at it.

    After all, why would YOU care if the Barbados or Antigua economies tank, travel to your island is already covered by SVG Air.

    Ralphie for King!! Ralphie for President!! Ralphie for Prime Minister!! Ralphie for Chairman!! Ralphie for ebryting!! Ralphie does put he nose in ebryting!! Ralphie doh turn dung nuttn!!

    I am praying this bumbling jackass loses his next election in SVG and is put out to pasture.

  4. James Lynch May 23, 2015 at 9:49 am

    The problem with the government-owned regional carriers is simple: Political interference and involvement which results in an incompetent, uncaring, unresponsive and unaccountable Board and management.

    The politician shareholder representatives (usually Prime Ministers) who oversee such airlines should approach these national and regional entities as a business, not as a political resource, appoint Boards of individuals who have qualifications, knowledge and experience in aviation, and mandate them to break even or make a profit.

    If the management the Board appoints cannot break even or make a profit, then the Board should replace them. And if the Board cannot perform their function then the shareholder/s should replace the Board.

    The Caribbean taxpayer has supported this sheer incompetence financially for over four decades; for once the shareholders should “get their act together” and themselves start acting professionally – get OUT of aviation and let the professionals do their work.

    As long as politics continues to make all of the decisions in Caribbean aviation, the taxpayer will continue to bear the heavy financial burden of incompetence.

  5. James Lynch May 23, 2015 at 1:01 pm

    Note to the journalist Emmanuel Joseph:

    Is this $5 million in US dollars? EC dollars? Barbados dollars? TT dollars? Guyana dollars? It makes a difference… if this is Barbados dollars we are only talking US$2.5 million, if EC dollars we are talking about even less that that.

    When you write an article in future, please state or annotate (such as EC$, US$, BD$, etc.) what currency you are quoting. at 2 or 2.7 (or much more) to US$1, there is a huge disparity between currencies.


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