PM to steer shareholders effort to get LIAT back on course

Prime Minister Freundel Stuart is leading an effort to get LIAT back on sound financial footing, against the backdrop of a warning that if a plan being implemented by the regional airline’s board of directors fails the carrier could be grounded.

Minister of Tourism and International Transport Richard Sealy has disclosed that Stuart will host other leaders of shareholder governments this week with the hope of finding answers to problems such as “prohibitive” air fares, and finding an alternative funding model for LIAT.

Minister of Tourism Richard Sealy
Minister of Tourism Richard Sealy

“Prime Minister Stuart is leading the effort to get LIAT viable, properly managed and on a sound footing,” he told Barbados TODAY, stressing that the airline was at a point where if it could not become viable, it would have to get out of business.

“You simply can’t continue losing all of that money. None of the shareholders, as it presently stands, can afford to hand a blank cheque every year.

“There will be definite changes going forward. We don’t have any choice in the matter. It is either a better future or the airline will be grounded,” Sealy added, warning that if there was no LIAT “there are countries in the Caribbean that would collapse”.

Sealy identified suspect management decisions, political interference, the involvement of multiple trade unions, and the wear and tear of planes landing and taking off among the problems that have caused the airline to hemorrhage money.

“We have to look at the whole model of how it’s funded. One thing is sure, the airline cannot continue to lose money year in and year out,” he insisted.

The Minister of Tourism also cautioned that if a situation continued where fares had to be increased to allow the airline to continue in the air, travelling on LIAT would become “prohibitive to the average Caribbean citizen”.

“It is already prohibitive to large sections of our population. We would have to look at that and craft a model that will allow us to ultimately get to a point where we can have more affordable travel to maximize the capacity of LIAT,” Sealy said.

He also took a swipe at some Caribbean countries that supported other airlines but refused to invest in LIAT.

“The prime ministers will have to look at having more countries becoming shareholders of LIAT. Dominica came on board recently. Whatever their fiscal challenges, they could still find the resources to come and get a piece of the action. I have a lot of respect for that kind of approach,” the Cabinet Minister said.

“There are some others who are probably in a little better off shape than Dominica. There are some others who find money to give extra regional airlines, but can’t find a cent for LIAT. Many of these folks need LIAT more than Barbados does.

“Even some of the largest critics of LIAT . . . their governments could not survive if they didn’t have LIAT landing at their airports,” Sealy said.

However, he was quick to add that the aim was not to antagonize any government, but to get the airline in shape and hopefully in the process get additional investors involved.

“If we don’t, we would work with who we have to work with. But I do look forward to seeing other people get involved,” he said.

The Minister of Tourism was speaking against the backdrop of efforts by Antigua & Barbuda to secure greater control of the airline and to keep as many services in that twin-island nation as possible.

Sealy told Barbados TODAY it was not important to focus on such matters, contending that neither the location of the airline nor who controlled it was important. He said the LIAT board moving forward with a plan to improve the carrier financially was the most important matter at this stage.

“There is a proposal that . . . the chief executive officer has been trying to implement and we will see how that goes. That is the first step. It [the board plan] calls for a series of decisions to be made,” Sealy said.

“We look forward to getting the airline on a sound footing [and] we think the board is going in the right direction.”

6 Responses to NEW ROUTE

  1. Alex Alleyne February 12, 2015 at 6:52 am

    Air fares on LIAT aer too costy for just a short trip . LIAT need a series of “specials” to get the flying public on board .

  2. Tony Webster February 12, 2015 at 8:04 am

    If Carnival Cruise Lines, or similar, could be interested, (maybe…”fly you there…join our ship here, cruise your three islands and we then pick you up over yonder…after two days at that Beach there (bring your Sandals) , and then fly you safely back home)… There would be no more losses…but a political price to pay.
    Would involve tricky logistics and individually-tailored itineraries, but nothing your tablet computer couldn’t handle… And would be massively appealin..and novel.
    Could our Caribbean politicians see such a big regional picture..using tunnel-vision and parochial economics?

    Talk to Butch: he would know who to call at Florida Caribbean Cruise Lines Association.
    Not exactly Quite Easily Done…but do-able. And no charge, this time.

  3. Tony Webster February 12, 2015 at 8:08 am

    Addendum to my earlier comment: such a novel approach, would not only crack the big LIAT “nut”, but it could well be a strong regional defense,to the inescapable coming Cubano impact on Caribbean tourism!

  4. Carl Harper February 12, 2015 at 9:21 am

    It’s the government taxes and surcharges on LIAT that is making the cost of airfare so high, and resulting in decreased demand for intra-island travel.

    Interesting that Sealy made no comment on the fact that taxes and fees on a ticket could amount to almost 40 per cent of the total cost of airfare. Now that is prohibitively ridiculous!

    Those countries that do not pay to become shareholders of the regional carrier should only get one inbound and outbound daily flight, and more, only when 100 per cent capacity has been achieved.

    It is ludicrous that islands such as St Lucia, Grenada and St Kitts want to enjoy the benefits of LIAT while being critical of its operations but do not want to put once penny into it.

    Barbados simply cannot be expected to carry the lion’s share of burden for keeping LIAT in the air while other governments go scot-free with a smile, but are willing to pump dollars into extra-regional airlines.

  5. Jim Lynch February 12, 2015 at 10:41 am

    So now we will have the blind leading the other blind leading the feeble leading the incompetent through the Valley of Death in the dark with no lights. Don’t worry, the vertical cliff of bankruptcy soon come, and we will finally be rid of all these ridiculous taxpayer-draining air transportation problems. LIAT is being replaced piecemeal through the islands as we read about it, and the loss of LIAT will only accelerate the emergence of these carriers without subsidised government competition.

    If Chief-Jackass-Who-Sleeps thinks he can succeed where Chief-Fool-Without-Clue could not, I welcome his arrival at LIAT’s Board. Maybe now we can accelerate losses – and the closing – and put something efficient and workable in place.

    For those readers who are unaware, LIAT’s delays and screw-ups continue unabated, quite a number of people still missing their connections due to their LIAT aircraft arriving between 3 and 12 hours late.

    Also, bear in mind that LIAT is now more than 50% owned by Barbados, and as majority owner PM Stuart has sat on his hands and kept his silence – as far as the airline and his nation is concerned – for well over a year now, doing little or nothing but contributing to the confusion in the country he leads. The method in his madness is clearly to let all of his problems solve themselves.

  6. Joe Frederick February 12, 2015 at 1:20 pm

    Carl Harper – “Those countries that do not pay to become shareholders of the regional carrier should only get one inbound and outbound daily flight …”. This type of thinking is part of the mindset that is sinking LIAT – it’s decisions are subject to all sorts of political and non-business considerations. Maybe Caribbean Airlines should stop flying to the US because the US does not have share in the airline.

    The airline’s routine should be based on demand for the services and market opportunities. If it turns out that they cannot operate some routes, that will open up opportunities for the many small airline entrepreneurs who have in the past risked their own money (i.e. not taxpayers’) to start air services, only to be forced out by a subsidized LIAT.

    Unfortunately, the policy of many Caribbean governments on LIAT can be best described as a “dog in the manger” policy – they know full well that LIAT cannot adequately service the region’s inter-island travel needs, but will use various overt and covert methods to thwart the efforts of any competitor who tries to.


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