PORT OF SPAIN, Trinidad, Mar 1, CMC – The Trinidad and Tobago government says it seek to help the cash-strapped regional airline, LIAT, reduce its financial burden by possibly entering into an agreement with the state-owned Caribbean Airlines (CAL) regarding the maintenance of its fleet, but that Port of Spain would not be injecting cash into the airline.
Prime Minister Dr. Keith Rowley, speaking at a news conference at the Piarco International Airport on Thursday night, said Caribbean Community (CARICOM) leaders, who met in St. Kitts-earlier this week for their 30th inter-sessional summit had been updated on the financial burden facing the Antigua-based airline.
While, Trinidad and Tobago has a “miniscule” shareholding in LIAT, the regional airline major shareholders are the governments of Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines.
Rowley told reporters that while Trinidad and Tobago does not acknowledged the “one per cent” shareholding in LIAT, “it is not the intention of Trinidad and Tobago to get involved in any ownership or subsidy arrangements with LIAT.
“However, the heads of government were informed that LIAT is in serious financial difficulties, meaning within a matter of a fortnight an injection of a minimum of five million US dollars is needed in order to keep flying.
“Now if LIAT ceases to fly, I need not tell you the economic and other impact that would have on the region. While Trinidad and Tobago does not rely heavily on LIAT for transportation the other territories are virtually at the mercy of a LIAT service,” Rowley told reporters, adding that the meeting noted “this is a matter for the shareholders of LIAT”.
Earlier this week, Antigua and Barbuda Prime Minister Gaston Browne said shareholder governments would need to do what is necessary in order to save the financially strapped regional airline, LIAT.
“Whatever is necessary to save LIAT will be quintessential for all stakeholders to cooperate. It does not matter the sacrifice that is required, we all have to make sure that we play a role to keep LIAT in the air,” he said.
Rowley told reporters that the shareholder governments are looking at the possibility of cutting out routes that are not financially viable to the airline’s survival.
“If the airline is to continue to fly to routes that are like that, the shareholders are saying that such countries will have to guarantee a minimum revenue stream to the airline or the airline will cease to fly on those routes”.
He said while he does not know the situation regarding the Trinidad and Tobago route, it does not believe it is among those uneconomical ones.
Rowley said in seeking to restructure LIAT’s business one of the major costs is the aircraft maintenance and “I have agreed to allow them to talk with CAL to see whether there is any economic benefit or possibilities for cooperation between CAL and LIAT from that standpoint to even a business cooperation.
“LIAT is expected to come to talk to CAL to see whether there’s any possibility of them doing business with CAL…which may relieve them of some of their expenses….,” he added.
Browne had also indicated that LIAT is in debt to the Barbados-based Caribbean Development Bank (CDB) and that St. John’s was aware of the situation confronting Barbados, which is also facing a serious financial situation.
“I think what they are concerned about is taking on additional debt. LIAT has debt at the Caribbean Development Bank that is asking the four shareholder governments to take over. Antigua and Barbuda has readily agreed to assume US$16 million of that debt. I think Barbados is saying it has an IMF programme and there’s some difficulty, but I am pretty sure that in order to save LIAT they will go the extra mile and that they will take over their portion of the debt”.
Barbados last year entered into a US$290 million Extended Fund Facility (EFF) with the Washington-based financial institution aimed at turning around its ailing economy.
Rowley told reporters that LIAT has enough “cash to last for 10 days “.