LIAT’s future hangs in the balance
By George Alleyne
Tiny populations in the Caribbean
separated by stretches of
sea present a challenge for commercial
airline service operators
to profitably fly to these destinations.
Yet the future of the only
airline service, that touches 15
countries from Guyana in the
southern Caribbean, to Barbados
in the east and St Thomas
and Puerto Rico in the
northwest regardless of size or
profitability of route, continues
to hang in the balance owing
mainly to apparent reluctance
of some regional leaders to
share the burden of keeping
Caribbean citizens connected.
That airline service is LIAT,
on whom larger air service providers
such as Caribbean Airlines
depend on as a feeder of
passengers from some small
territories from where persons
wish to get on long-haul aircraft
to take them to the USA,
Canada and Europe.
In its struggles to maintain
the Caribbean service LIAT has
had many cash crises because
until recently there were only
four regional government shareholders
contributing to its survival,
while other nations refuse
to put a cent into the company
that benefits their citizens.
With 49.4 per cent of share
ownership Barbados carries the
bulk of LIAT’s financial burden,
followed by Antigua with
34 per cent. St Vincent and
the Grenadines, and Dominica
account for some 10 per cent
shareholding. Grenada joined
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this year with a minority contribution.
Private shareholders
and employees account for 5.3
per cent.
The circumstances of the
cash-strapped airline provoked
frustration leading to a recent
outburst by Barbados Prime
Minister Mia Mottley in which
she reportedly used the term
‘doomed’ in relation to the airline’s
future.
“LIAT is not a CARICOM
issue, LIAT is the issue of three
or four governments having to
have shareholder discussions.
“Now if you expect the three
or four shareholder governments
alone to carry the burden
then you will end up in
trouble each time because it
means that at some point they
are going to make commercial
decisions because there is not
a bottomless pit to service it,”
she said.
Mottley said she hopes
regional governments can
come together and have common
ground “because while
LIAT 1974 Limited may not be
a viable proposition, reasonable,
affordable, reliable air travel is
the prerequisite for the growth
of this region.”
But Antigua’s Prime Minister,
Gaston Brown - who had earlier
this year attempted to buy out
the majority of Barbados’ shares
but talks between the two countries
fell through – said LIAT is
far from doomed.
Supporting his resolve to
keep the troubled carrier afloat,
he recently flew to Venezuela
and signed a financing agreement
for $15.8 million with
ALBA Bank, established as a
regional development finance
house in 2005 by now deceased
Venezuelan President Hugo
Chavez, and Cuban President
Fidel Castro.
“LIAT is our infrastructure
that links our scattered islands
into a single economic space,
and it breathes oxygen into our
tourism industry,” Browne said
after the signing.
Of the loan amount, US$15
million will go to capital investment,
and the remainder
towards associated bank fees
and Antigua’s membership contribution
to ALBA.
“A condition of this new capital
would be that there has to
be cuts including a reduction in
salary and wages. I’m sure that
there’ll be some changes … We
have to make sure that we have
a cadre of competent people and
we may even create the space
for members in the private sector
as well to participate,” said
Browne.
Browne’s valiant efforts must
be commended, bearing in
mind that the Antigua-headquartered
carrier employs over
600 people there.
Barbados Prime Minister, Mia Mottley. Photo by George Alleyne
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