Regional airline LIAT is expected to record an EC$23 million loss at the end of this year but the company has unveiled a business plan which it says will reverse its fortunes in 2013.
Recently-appointed chief executive officer, Ian Brunton, told a regional news conference in Antigua on Friday that based on the plan, the airline is projecting a two percent profit for 2013.
“The projections show strong revenues and significant bottom line improvement. LIAT is projected to reverse its current losses and record a profit of EC$7 million in 2013 and by 2017, profits in excess of EC$40 million are projected,” Brunton said.
The airline has constantly been in the red. In 2010 it recorded a loss of EC$20.2 million, which increased to EC$43 million in 2011. Brunton said this was “largely driven by higher fuel costs combined with lower passenger volumes” combined with high maintenance and employee costs.
Brunton said the new business plan will provide a “road map to turn around the fortunes” of LIAT and “it indicates that a modest positive net profit margin of just over two per cent is attainable in 2013 and more than positive nine per cent in subsequent years”.
Some aspects of the plan include revamping the management structure and decision-making process of LIAT, reviewing unprofitable routes which Brunton dubbed ‘social routes,’ a complete fleet change of 50-seat and larger turbo prop aircraft to service both the existing core markets and an expanded market based on new city pairs, the forging of closer working relationships with “one or more third tier commuter carriers…on a sell you fly basis,” and “alliance with one of more metropolitan air carriers will be sought in order to increase LIAT’s reach into new tourist and visiting friends and relatives markets”.