LIAT split

Regional leaders trade punches over carrier’s future

St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves Wednesday publicly disagreed with his Grenadian counterpart Dr Keith Mitchell on the way forward for regional carrier LIAT, while calling for more investment on the part of Caribbean Community (CARICOM) governments in the Antigua-based carrier in which Barbados is the majority shareholder.

Speaking at the ceremonial opening of the 38th CARICOM Heads of Government Summit in Grenada on Tuesday night, host prime minister Mitchell, the incoming CARICOM chairman, noted that transportation remains the lifeblood of the regional integration process.

However, he said weak domestic and intra-regional air travel, along with low service competition and high travel costs had all contributed to the reality that Caribbean nationals could more easily connect to destinations outside, than within, the region.

In that context, the Grenadian leader said it would represent a significant installment to the “regional integration account” if regional leaders were to collectively agree to reduce airline ticket taxes, as well as other fees attached to the cost of intra-regional air travel.

Grenada Prime Minister Dr Keith Mitchell

“Further, I have long held the belief that political presence on the board of airlines, such as LIAT, is not helpful to its proper management and efficiency,” Mitchell said, adding that “LIAT’s sustainability would have benefited if it was run more as a private sector company.

“Governments could then subsidize flights to given destinations or routes that are in the best interest of their respective countries,” he told the regional gathering, which included representatives of the shareholder governments of Antigua and Barbuda, Barbados, Dominica and St Vincent and the Grenadines.

Mitchell also questioned: “How could LIAT thrive when, for example, a few months ago, literally overnight, LIAT cancelled one of its most lucrative routes to and from Grenada, without any consultation with the citizens or leadership of Grenada?”

While suggesting that the decision was “all based on politics”, the Grenadian leader told his CARICOM colleagues, “We have to do better as a region.”

However, Gonsalves, who is chairman of the LIAT shareholder governments, told the Caribbean Media Corporation (CMC) he was disappointed with Mitchell’s statement.

“I think Prime Minister Mitchell’s speech last night was unfortunate,” Gonsalves said.

“Of course we disagree on LIAT, but to say that the decisions which are made in relation to LIAT at the board level are political, he just doesn’t get,” he added.

Gonsalves pointed out that the LIAT board was headed by distinguished Caribbean national Dr Jean Holder of Barbados, asking, “anybody thinks of Jean as being some kind of political person?”

St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves

The Vincentian leader further pointed out banker Isaac Solomon, who heads RBTT in the sub-region, was also a member of the carrier’s board.

“This is a distinguished professional,” Gonsalves stressed, in further brushing aside Mitchell’s concerns.

“It is sophistry for my friend Keith to say that if it is owned by the private sector that he will put money in. What is the difference between the private sector and the public sector? We have asked for other governments to come aboard LIAT

“It is one thing to sit on the sidelines and criticize it [LIAT]. It is another to put your money where your mouth is,” he insisted.

He reminded that back in 2001, LIAT had put out a $40 million rights issue to get capital but that only his government had put up EC$2.9 million (one EC dollar = US$0.37 cents), with no private sector investment made.

“At that time a lot of them were dancing with [the disgraced Texan billionaire Allen] Stanford and I held the position that we have to invest in LIAT.

“I went to the parliament of my country and said: ‘We are investing in an airline that for all practical purposes was insolvent,’ but if LIAT did not exist we would have had to invent it,” Gonsalves told CMC, adding “we have done tremendous reforms with LIAT”.

He also pointed out that St Vincent and the Grenadines currently receives 42 LIAT flights a week compared to at least 39 to Grenada “and we put a lot of money in it.

“So I don’t agree with my friend Keith in his critique of LIAT and I have to say he has put the issue in the public and I have to respond. He is my friend and I hope this matter is resolved.

“If you attack LIAT unjustifiably, I will stand up and defend LIAT. LIAT has a lot of flaws, a lot of limitations, but I would like to invite him while I am on Grenadian soil to put some money in LIAT, or, either become an equity partner or you want additional routes, negotiate it with LIAT and say, ‘this is the market support for additional routes’ rather than this kind of unfounded critique of LIAT.

“He knows my position on this and he will not be surprised at my stance on this,” Gonsalves said.

In a separate statement, Antigua and Barbuda’s Prime Minister Gaston Browne also weighed in on the LIAT issue, saying that the policy should be “based on shared burden and shared benefit.

Antigua and Barbuda Prime Minister Gaston Browne

“LIAT needs more planes, it needs more pilots, the staff need an increase, the airline is struggling to pay its debts. In fact it takes cash. To operate an airline is not cheap talk, not political grandstanding and those who do not contribute to LIAT, its operations and viability have no moral authority to demand increased airlift from LIAT,” Browne said in response to Mitchell.

“The rationale is simple you contribute and then you can make your demands. There are no free lunches,” he said.

After the leaving the summit last night for Antigua, Browne also delivered a nasty bouncer at Mitchell saying “the irony is that one prime minister is trying to engage me in the affairs of the West Indies Cricket Board, but on the other hand he has refused to cooperate in ensuring the viability of LIAT or to contribute to the viability of LIAT”. 

Source: (CMC/BT)

21 Responses to LIAT split

  1. Saga Boy July 6, 2017 at 12:05 am

    While I agree with him re the reduction in taxes, Mitchell should be shame for making the type of demands he us making especially since Grenada is not a shareholder. If I were on the board of LIAT I would reduce the flights to Grenada and St.Lucia and any other island that is not a shareholder. Let them get their own planes. This is why CARICOM is so divided. A pack of unrealistic, selfish politician who believe they are entitled.

    Reply
  2. Mia July 6, 2017 at 6:39 am

    If your government does not contribute to LIAT, then your country should NOT benefit from its services. And if you REFUSE to assist, then you do not have a say in how the airline is managed. Do you tell AA, BA or VA how to schedule their flights to your country or how to manage their airlines?

    Reply
  3. Rawle Spooner
    Rawle Spooner July 6, 2017 at 6:41 am

    LIAT-Leaving Islanders Agitated Traumatized.

    Reply
  4. Eddy Murray
    Eddy Murray July 6, 2017 at 6:57 am

    LIAT, making prime Ministers brawling in public while other play invisible to it.

    Reply
  5. Tony Webster July 6, 2017 at 7:40 am

    In Antigua, you spell LIAT as P-O-L-I-T-I-C-S. S’matter of fact, it’s spelled the same all over God’s ble$$ed Caribbean. Yep, just like dat Mexican stand-off….wid 12 loaded guns…er mouts.

    Reply
  6. KS July 6, 2017 at 7:44 am

    PM Mitchell is 100% correct …… “when a business fails, don’t blame the workers, the fault is usually management!”.

    LIAT has always been too ‘political’ ………… ridiculous taxes/fees on a ticket from the greedy governments, with a monopoly…. & because they control the airports, they choke any private sector attempt to start-up a competing airline which would bring down prices.

    Gonsalves is a bully & our PM Frundel, the main shareholder, is a silent wimp!

    Reply
  7. Harry July 6, 2017 at 7:56 am

    what does jean really know about running an airline like LIAT with its complicated nature, didnt he wish to retire some years ago and was asked to stay on? as i think that it would difficult to get a suitable replacement.

    The suggestion that Governments reduce the tax on tickets – which are approx 50% of the cost of a ticket – is one that should be adopted.

    Reply
  8. Ali Baba
    Ali Baba July 6, 2017 at 8:15 am

    PEOPLE OF BARBADOS I HAVE IT!!!!!!!! LISTEN REMEMBER THESE LEADERS SAY THEM AIN’T PUTTING NO MORE MONEY IN LIAT? WELL DE INVISIBLE IDIOT WE HAVE HERE, WILL TAKE UP THE TAXPAYERS MONIES AND SIMPLY GIVE IT AWAY AS PER USUAL. WATCH AN SEE…..

    Reply
  9. Jeff July 6, 2017 at 8:27 am

    Gonzales, I respect your opinion but again I think you are completely wrong on this. Dr. Mitchell hit the nail dead on its head. Any government ran institution could not be managed well and LIAT is a prime example. No more Government injection and let the people invest in the airline. If it’s so great, the people will then value their investment and make it greater. Have an IPO on LIAT and let the company go public.

    These high taxes that are paid to the region countries are outrageous and a criminal act if one ask me. The laziest form of government is taxation.

    Reply
  10. Sonia Seale
    Sonia Seale July 6, 2017 at 8:29 am

    It will come from the Barbados Bank of National Insurance.

    Reply
    • Ali Baba
      Ali Baba July 6, 2017 at 9:15 am

      how u know so good SONIA..RIGHT FROM THAT BANK

      Reply
  11. carlisle norville July 6, 2017 at 10:12 am

    L.i.A.T. & Caribbean Airways want some real competition, I heading for Jamaica & i have to pay $ 1,000.& fifty something just to fly there from here in Barbados, poor people can’t go anywhere, it is a shame that blacks do treat blacks like rats( looking for a rich man to start a new airline, that travels to every island in the Caribbean.

    Reply
  12. Alex Alleyne July 6, 2017 at 10:14 am

    LIAT will not go in the hands of the “private sector” because that sector demands RESULTS.

    Reply
  13. Kevin July 6, 2017 at 10:17 am

    Dr Mitchell’s main point was not addressed, can governments reduce taxes on Liat regional flights. These taxes in most cases makeup half the cost of Liat ticket.

    Reply
  14. Saga Boy July 6, 2017 at 10:24 am

    Ali Baba you are very disrespectful. Why can’t you make a point without personalizing it? LIAT is needed by Barbados. In case you do not know it many Bajan professionals and businesses use that airline on a daily basis to do business in the region. Barbados, Antigua and SVG have for many years invested money to ensure that LIAT remains operational. It is unreasonable for Mitchell to make demands while not contributing to the airline. The PM did the right thing. This issue should be discussed behind closed doors.

    Reply
  15. Peter July 6, 2017 at 10:38 am

    I shall write it again. The cost of air travel within the Caribbean is highly unprofitable, not to mention undependable and time consuming, all embodied with very poor management. I invite all readers of this comment to click on the forwarded website shown…. https://www.youtube.com/watch?v=WG755vwONHM ( website underlined). See wherte the introduction of super ferries can enhance regional integration, trade and growth at a fraction of LIAT’s airfare costs and delays. This system is current in the Canary Islands, Hawaii Islands the British Isles, Australia and New Zealand and Asian Isles among a few others. This can well earn the Caribbean governments in excess of US$ 500 BILLUION dollars per annum while increasing tourism and giving visibility and awarerness to our cultures and foods. Question is Do we want true development?

    Reply
  16. Milli Watt July 6, 2017 at 1:13 pm

    Late If At All…………LIAT

    Reply
  17. James Lynch July 6, 2017 at 2:21 pm

    The true solution for LIAT is not to sell it, but to pull the politician parasites out of its ass and run it as a commercial airline. Shareholding is IRRELEVANT to making a profit. Shareholding INTERFERENCE is EVERYTHING to entailing a loss.

    I have advocated this directly to the PMs for almost 10 years now: Replace your Tourism “star” Jean Holder with somebody who knows about airlines. In 20 years on the Board Holder has learned NOTHING – and it shows.

    Replace most of the Board’s do-nothing political appointees with people who know about aviation and airlines. Give the Board broad and unspecific mandates mandates to follow, with time-frames before they too are thrown out for incompetence. No Board Member should be indispensable.

    Replace the CEO with a foreign turn-around manager with global experience, and give him free reign. There will be a short period of discomfort as CHANGES are made, then the taxpayers will be relieved of the annual (now totally unaccounted for) financial burden and the eastern region will have a well-managed airline to be proud of.

    Replace executive management with people who have qualifications and can demonstrate their skills. Right now we have people there with paper but no learning.

    For 40 years the faces have changed but the incompetence, political interference and INSANITY carries on. The PMs say they want change, but they do not want to order change.

    To the PMs I say, “Piss or get off the pot”. You are wasting in excess of US$100 million a year, every year, of taxpayers money and with these managements causing “meltdowns” and endless delays and cancellations, causing any amount of passenger inconveniences and ,missed connections.

    At what point are you going to actually DO something and stop all the waste-of-time bullshit talk?

    Gonsalves says Mitchell does not “Get it”. Well, Mr. Gonsalves, it is my considered opinion that it is YOU who does not “get it”. You want LIAT to stop bleeding cash? Then put in proper Board and management and stop with the Communist Marxist bullshit that taxpayers MUST pay LIAT’s losses. But the fact is that LIAT need not MAKE any losses, chew on that a while and then tell me what kind of ganja you are selling again.

    You want taxpayers to pay LIAT’s losses so that you and your Comrades can continue to pass favours to your political friends with do-nothing appointments, no qualifications required. Maybe it is time your voters show you where you can park that little nugget.

    Reply
  18. Alex Alleyne July 6, 2017 at 3:15 pm

    LIAT split-up.

    Reply
  19. Alex Alleyne July 6, 2017 at 7:34 pm

    Where is “BimJim ???? ,,,,,on this one.

    Reply
  20. Rayie July 8, 2017 at 5:33 pm

    LIAT is emblematic of ALL that is wrong with Caribbean attitudes and culture. SERIOUSLY.

    Reply

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