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LIAT buyout?

Another airline has eyes on Barbados base

Puerto Rico-based Seaborne Airlines, which operates in over 10 regional countries, is reportedly looking to set up a new base in Barbados, amid reports that it has also made a firm offer to acquire regional airline LIAT.

Seaborne, which flies mainly 34-seater aircraft, operates in Anguilla, Antigua, Dominica, Dominican Republic, Guadeloupe, Martinique, Puerto Rico, St Croix, St Kitts and Nevis, St Maarten, St Thomas and Tortola.

Well-informed sources have told Barbados TODAY that Seaborne’s offer of US$100 million  has already been put to the LIAT board by the company’s CEO Gary Foss.

However, Foss could not be reached today for comment, but when contacted, LIAT’s Chief Executive Officer David Evans suggested the offer was no longer on the table.

He also took issue with the $100 million figure, describing it as “completely erroneous”, but did not deny that the two sides have been talking.

“As a matter of course, airlines will talk to each other on a regular basis about various relationships they might have with each other, and these can range from something as simple as inter-airline agreements or something major like an acquisition,” Evans said.

However,  he made it clear that “in the case of Seaborne Airlines, I can confirm that there is no plan for Seaborne to buy out LIAT” at this stage.

“There have been discussions over the course of the year with Seaborne Airlines and those discussions remain confidential but I can tell you that they have been considered by the board of LIAT and, as a consequence, let me repeat that Seaborne will not be buying out LIAT,” he stressed.

Also asked to comment today on the so called buyout proposal, the Minister of Tourism and International Transport, Richard Sealy, said he had just returned home from World Travel Market in London and would therefore have to look into the reports.

He however revealed that Seaborne had expressed an interest in establishing a base of operations here, but he said those discussions were at “a very early stage”.

“We’re open for business. There’s a process involved, but we’re looking to build our aviation industry,” Sealy said when asked whether Barbados would be interested in having Seaborne set up operations here.

The latest development comes against the backdrop of recent talk of having LIAT change its base of operations from St John’s to Bridgetown.

However, Evans assured today that the carrier, which is jointly owned by the Governments of Barbados, Antigua and Barbuda, St Vincent and the Grenadines and Dominica, was staying put for now.

He also commented on the performance of the Antigua-based airline, describing 2015 as “a relatively satisfactory year” for LIAT, with a strong performance “right up to the end of August”.

“We have, as an airline, faced the tragedy that befell Dominica as a result of the damage that was caused by Tropical Storm Erika, and I have to say that our thoughts must always first and foremost be with the people of Dominica.  That did have a negative impact on our business, but I think we can look forward to 2015 as being a year in which we achieved a number of our objectives.

“We had two primary ones which were to complete the exit of our old fleet of Dash-8 aircraft and that is still on track for the end of the year. And the other major initiative we had was to reduce our staff members in line with the smaller size of our business and that is also on track,” he reported.

Efforts by Barbados TODAY to reach St Vincent and the Grenadines’ Prime Minister Dr Ralph Gonsalves, who is the chairman of LIAT’s shareholder governments, were unsuccessful.

9 Responses to LIAT buyout?

  1. Joel C. Payne
    Joel C. Payne November 7, 2015 at 12:43 am

    Somebody tell the Barbados government as the largest shareholder in the airline LIAT to say YES!

  2. Joel C. Payne
    Joel C. Payne November 7, 2015 at 1:51 am

    Somebody tell the Barbados government as the largest shareholder in the airline LIAT to say YES! If the government of the Federation of Antigua & Barbuda again demands the airline to be based there let them pay out the Barbados taxpayers and they can keep the airline down in Antigua. This is the best option for the Barbados government to get out of the airline industry. If/when price of oil/gas goes up again LIAT will be back in trouble.

  3. Barry Szum November 7, 2015 at 9:33 am

    Please, please, please, Seaborne, buy Liat. Show the people of the Caribbean the level of service that an airline that understands customer service can provide to its passengers and the market it serves.

  4. James Lynch November 7, 2015 at 10:15 am

    The shareholders are not going to sell LIAT, or they would have made such a possibility public years ago.

    I am a full national or TWO east Caribbean countries and a couple of years ago offered a joint venture with the shareholders of LIAT with an injection of US$200 million, to take control and operate the airline properly. I received no response, but four months later Comrade Ralph went to the Press, made my offer public and called me a Buccaneer trying to destroy his precious LIAT.

    Barbados now owns more than 50%, which means none of the other shareholders really have a say in what is done with LIAT. But in Fumble we have a Prime Minister who rules by “Tort” – that is, the thinks if he does nothing then he cannot be blamed for anything. For him to make such a decision would involve possible apportioning of blame from somewhere, therefore he is unlikely to make any decision – and we therefore default to the status quo.

    Further, LIAT as a company is not a “going concern”, is still losing almost US$100 million a year, and an offer of US$100 million is by far inadequate (an insult, actually) for recompensing the taxpayers of several sovereign countries for the Billions they have poured down that alligator’s throat over the years – the re-fleeting alone cost almost that much. But Seaborne knows what they can afford and are probably “trying a ting”.

    Anyone who buys LIAT – to operate as LIAT – had better have very deep pockets, because it will take huge chunks of money to set LIAT straight. Which is probably why Caribbean Airlines has not tried to buy it, but set CEO Ian Brunton on LIAT as a Trojan Horse to destroy it from the inside – and between the “meltdown” and his incompetent replacement that ruse is succeeding very well. CAL need only wait for LIAT to close its doors, and they can move in without spending another penny.

    Another obstacle is LIAT’s reputation and goodwill, the airline has gone from “We Airline” to “Please get me there some other way!!” in the space of less than a decade, and the good Comrade has made it clear that whether we like it or not this is the way the shareholders want LIAT run – Leave Island Any Time, or now a more valid LIAT Is Almost Terminated.

    Apart from an act of sheer stupidity, the only sensible business plan I can see from Seaborne is that for US$100 million they want to buy LIAT only for its many grandfathered regional and international route rights (for Seaborne – a US-owned and registered company – to operate as Seaborne), and shut LIAT down. And the Three Amigos – Fumble Dumble, Comrade Ralphie and Monsieur Gaston – would never allow that to happen, each for their own particular reasons. For some reason the Comrade believes LIAT is his own airline and clearly it is being run his way.

    If this is the intent, for US$100 million Seaborne is looking for perhaps US$1 Billion in value plus perhaps US$200 million in assets in order to tear it down, strip out and sell the assets, and then start operating throughout the Caribbean as if it were not a US airline. Question: Would the US DoT allow a non-US citizen of company to buy Seaborne and start operating within the contiguous USA?

    To me it is basically the same thing. It just seems to me as though the USA treats everyone else as sacks of flour to be bought and sold, but reciprocally everything is taboo for non-US individuals and businesses.

    Let me spin this in one more direction… Seaborne taking over LIAT’s route rights would be like Antigua-registered LIAT taking over InselAir’s route rights and seeking to fly between Curacao and New York. The US DoT would refuse because LIAT is not registered in the Netherlands Antilles, and Curacao would refuse because it is not a Netherlands Antilles or US airline.

  5. Ron Fraites November 7, 2015 at 10:20 pm

    I do believe that Seabourne Airlines should buy out Liat. From an investor’s perspective it makes sense. It takes the financial strain off of the Caribbean governments that may have some investment in Liat. The other beneficial fact is that they can help fix Liat’s financial problems and probably make them better off financially. EEven though Liat made changes with their directors and executives, it appears that their ideas aren’t working 100%, but they’re people willing and trying to keep Liat in the sky which I do support. But Seabourne Airlines buying out Liat seems to be the best idea, the best situation for Liat, but both parties will know what’s situation for both airlines.

  6. J. Payne November 8, 2015 at 1:39 am

    P.S. There is no more “Netherlands Antilles” the Dutch islands that WERE in the Netherlands Antilles voted that federal government out of existence since 2010. In the aftermath some voted in that referendum for more autonomy, while others voted for less.
    In terms of “grandfathered” air slots. Those are done once they’re no longer served. So LIAT routes into USA or Canada et al which are no longer flown would be null and void when the airline stops serving those routes.
    P.P.S. If your bid for LIAT is compelling put it up again.

  7. James Lynch November 8, 2015 at 9:30 am

    I am aware of that chanbge. We all know what the Netherlands Antilles WERE, but we don’t all know what the Netherlands Antilles ARE now… I write so that the maximum number of people understand first time out.

    Once the “grandfathered” slots were there they may still be subject to recall – if there is a case for asking them to be reactivated. Same for British Airways, which used to operate (enroute) intra-Caribbean flights… if they asked for them back they would probably be reinstated without any fuss, despite any protest from LIAT or CAL.

    I already wasted too much brain power, good will, time and money trying to save LIAT. The owners do not want to save it, and the Comrade mouthpiece is rude, arrogant and seems in total control of LIAT – and for a period of years now our own “mastermind” has nothing whatsoever to say, even from his cellphone or private email account.

    I do what I can, first behind the scenes (including finding a bank who would lend me US$200 million) and then in public, but when I am done trying I am done – the door is closed and I won’t revisit that rude and unpleasant “Comradely” scenario again.

    It is the expert opinion of myself and several other airline professionals that LIAT will not last much longer, primarily because there is not much shareholder money – if any – left to throw down the LIAT hole, secondarily because most of the Board and management is incompetent – and the Comrade has said he likes it exactly that way.

    Barbados would need to throw the lion’s share down the LIAT hole, and – as we know – Bados is broke (except for political gallivanting, there always seems to be plenty of cash for that).

  8. zulumbj November 8, 2015 at 2:54 pm

    For an example of how takeovers/mergers/buyouts work. Look at the Caribbean Airlines and Air Jamaica takeover. Airlines if operated efficiently should be a stream of foreign exchange for the islands. Try to keep Liat caribbean owned.

  9. J. Payne November 8, 2015 at 11:15 pm

    @Zulumbj. Puerto Rico is in the Caribbean is it not? Air Jamaica has all kind of clauses that if Trinidad based Caribbean Airlines stops using the Jamaica brand, or decreases air traffick to Jamaica or many other catch clauses that the Air Jamaica brand reverts back- to the Jamaican government. In terms of LIAT Caribbean government could start out by reducing share ownership or maybe even swapping their localized ownership for shares in the parent holding company.


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