Saint Lucia, three other countries urged to invest in LIAT to prevent airline from collapsing

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Saint Lucia, three other countries urged to invest in LIAT to prevent airline from collapsing
PM Browne
Browne

ST. JOHN’S Antigua, Mar 4, CMC – Prime Minister Gaston Browne says efforts are being made to get the governments of at least four Caribbean countries to purchase shares within the financially-strapped regional airline. LIAT.

Speaking on a radio programme here over the last weekend, Browne said that the issue had been discussed at the Caribbean Community (CARICOM) inter-sessional summit held in St. Kitts last week.

“The Caribbean Development Bank did a study some time last year in which they concluded that the most expensive option to pursue is to allow LIAT to collapse because we would have to form a new entity. That is just more expensive than having a restructuring of LIAT,” Browne said.

The major shareholders of the airline are Barbados, Antigua and Barbuda, St. Vincent and the Grenadines and Dominica and Browne said that there are plans to encourage the governments of St. Kitts-Nevis, St. Lucia, Grenada and Guyana to become shareholders.

“There is a need for us to have a model of shared burden, recognising that from time to time LIAT would need some level of support. We have recognised that LIAT is making a significant contribution, not only in terms of the connectivity of people within the region, but even the airport taxes, the landing charges and so on that are earned by the various governments,” Browne said.

“Even if LIAT was to collapse, LIAT would have to be replaced. We must be in a position to move people within the region. So If LIAT collapses you will have to re-invent it,” he said.

Last week, Browne had also indicated that LIAT is in debt to the 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.

The Trinidad and Tobago government last week said while it would seek to help the cash-strapped regional airline by possibly entering into an agreement with the state-owned Caribbean Airlines (CAL) regarding the maintenance of its fleet, Port of Spain would not be injecting cash into the airline.

Prime Minister Dr. Keith Rowley said the regional leaders 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”.

He told reporters that LIAT has enough “cash to last for 10 days“.

However, Browne told radio listeners “one of my colleague heads in the region made a very unfortunate statement recently in which he suggested that LIAT was 10 days away from collapse”.

“That is not so. The reality is the various governments continue to support LIAT to ensure that it stays in the air. Perhaps someone may have made a statement, as far as I am concerned, it was a hyperbole, not saying that without the support that LIAT could not collapse, but the reality is LIAT still has the support of the four shareholder governments and we will not allow it to collapse, unless circumstances push us to the extent where we cannot take it any further,” Browne said.

The airline’s chief executive officer, Julie Reifer-Jones, responding to reports that the airline is facing severe financial problems and could possibly be grounded in the coming days, said that while the Antigua-based airline is in a challenging financial situation, “LIAT has continued flying through the region with support from its principal shareholders”.

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12 COMMENTS

  1. It will not collapse. It is a job creator. All they have to do is to continue to ransfer money from other areas to LIAT. It works each time there is a crisis. That will keep this prestige National asset flying Caribbean skies.

    Who invests in a losing business? Who would do such a crazy thing?

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  2. This is a no-brainer any island that doesn't pony up with money or buy shares gets no service. This foolishness has gone on far too long the islands not contributing are spongers. Its another form of cheating they are benefitting without contributing. They should be cut off from LIAT service like yesterday. The sky will not fall and LIAT may actually be better off.

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  3. I say let LIAT collapse, it's the greed with the Board of Directors and every Mr so and so with a so called big name sponging off LIAT profits and the flight attendants getting Penny's on the dollar. LIAT right now is like Tourism in the Caribbean, modern day slavery, a bunch of maids , watress and waiters working hard for barely anything just to make the white swines happy.
    Some of us are too freaking happy when we hear about a 10 cent raise while the Hoteliers send back their monies to their homeland, taking hard working tax payers money to bail out a failing airline is wrong in so many ways.
    When last anyone of us heard of a nice gesture that LIAT did for the poor ordinary man? The most a group of people get off tickets is a meager $20 if so much., and we wonder why all these islands are crime ridden, (no excuse but) the young people are fed up and see those at the top taking advantage of the system

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  4. The cdb report should be made public . Let the public see how much of the recommendations have already been implemented. My guess is not a thing . Yet PM Browne wants money from countires which actually provide viable money making routes .
    If money is given before basic restructuring, not a damn thing will change . Tax for one needs to drop .

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  5. Who wants to invest in a business which isnt progressing?
    If each time they get investment they cant show returns, why invest in them? There are other airlines within the Caribbean. If LIAT management was better, operations etc, it would not be where it is.

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  6. LIAT's purpose is not so much whether it makes a profit, but whether it provides a necessary and vital service. LIAT should cut service to those countries/locales in the OECS whose Governments refuse to support it.

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    • On the subject of destinations "paying their fair share", Caribbean Airlines serves our islands without multiple ownership or destination governments "paying their fair share", WinAir serves our islands without multiple ownership or destination governments "paying their fair share", interCaribbean now serves our islands without multiple ownership or destination governments "paying their fair share" - as do multiple other "regional" AND international airlines.

      How is it, then, that the supposedly intelligent eastern Caribbean political owners of LIAT are unable to wrap their supposedly intelligent minds around the concept of applying cost of operation to tickets, non-owner destination governments paying seat subsidies (AS THEY DO TO FOREIGN AIRLINES), and even doing the right things to transform the airline into a commercial operation which DOES NOT REQUIRE SUBVENTIONS?

      LIAT's problems are nothing new, and over the decades the ever-changing faces of the owner politicians have had the same advice repeated from scores of stakeholders and aviation professionals (including Lufthansa), yet here we are with the political non-aviation non-airline talking heads in Barbados still just making it up as they go along.

      If majority shareholder Barbados is going to make changes, they should do so with professional advice, and not continue to waste everyone's time and taxes playing irrelevant political games.

      It is NOT necessary for ALL destination countries to invest and waste their taxpayer money in this failed airline model. Commercialise the airline, pull the politics and politicians completely out of it - AS HAS BEEN DONE AT WINAIR - impose reasonable fares, charge the losing destinations seat subsidies where necessary, and stop the decades-old utter amateur stupidity.

      The REAL problem is POLITICS, in politicians who believe that becoming elected dictators somehow endows them with knowledge and qualifications far surpassing every expert under the sun. Pull THAT dark matter out of LIAT's backside and allow the professional light to shine on LIAT, and you WILL see an airline which expands beyond your wildest dreams. But as long as these dead weight sea anchors insist on dragging LIAT low in the water there will never be progress.

      So I suggest a new LIAT motto for the second millennium - "Backwards ever, forwards never."

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  7. And after more shareholders have invested in LIAT, what then? Business as usual, and in six months yet another call for subsidy/subvention to "save" LIAT again? You KNOW that's going to happen. And you KNOW it's going to happen again after that on a regular basis - just the usual crop of insane politicians sucking the life of out their taxpayers without any regard to making any real changes.

    St. Kitts and Nevis, St. Lucia, Grenada and Guyana are NOT going to invest in LIAT, and the mental asylum inmates in Trinidad just indicated that they too would refuse to buy shares in a SECOND taxpayer-supported airline (after Caribbean Airlines, also long supported by massive taxpayer subsidies). Something to do with "de damn oil run out".

    By all means recognise that from time to time LIAT would need some level of support, but there is NO need for us to have a "model of shared burden", because there is NO NEED for a "shared burden".

    The insane Trinidadian politicians just recently joined LIAT in placing people at the head of Caribbean Airlines who have zero qualifications or experience in running airlines - and the outcome will be as predictable to professionals as it is to anyone with a brain... losses, subsidies, political responsibility, and MORE TAXES.

    So the insane are indeed running the asylum... PM Mottley swept Parliament last year and owns more than 50% of LIAT. And since she won the election she and her minions have met at least THREE times to make decisions about the way forward for the airline. But despite there being scores of professionals willing to offer their opinions who did actually they meet with? Yeees, they met with exactly the same aviation-incompetent people who are now destroying the airline - PM Gonsalves, CEO Riefer-Jones et al. They have no clue what they are doing, but they are well connected politically.

    If your roof is leaking badly, do you call in an undertaker? A haberdashery? Oh, I know, perhaps a concrete manufacturer? A secretary? But in the last 50 years our favourite mental giants have called in and appointed to the Board and upper management of LIAT just about all of their friends from all walks of life - except a single person with qualifications and experience of running an airline.

    And for at least the last 50 years the ever-lasting abysmal governance and management have blamed everyone but themselves for the problems, screw-ups and losses, while the shareholder politicians cast around like fish out of water - and today are still asking the same Beavis & Butthead crop of political appointee idiots what they should do next.

    "According to PM Browne, all the existing shareholder governments have committed to the restructuring of LIAT to include issues affecting staff, performance of management and to building a healthier culture within LIAT."

    Except changes over the decades have ALL been superficial and revert to the sale-old same-old within a year. Change? God forbid anything should change in LIAT, then someone on high would have to forego living in the style to which they have become accustomed.

    "He stated further that the Government of Antigua and Barbuda has moved to amend the laws to make the regional carrier an essential service and that was one of the pre-requisites for the support of the various shareholder governments."

    Nonsense. Last time this was discussed at shareholder level it was discarded because LIAT is not a Hardware store - and even if it were, you CANNOT stop people from calling in sick - ESPECIALLY not pilots, who are instructed by a different set of laws called the Air Navigation Orders, where as little as a sniffle demands that they stay home because of the danger of blowing their eardrums out of the ear canal with the ever-changing air pressures.

    "Barbados is LIAT’s major shareholder with 49.5 percent, Antigua and Barbuda 13 percent, St. Vincent 12 percent, and Dominica with less than 10 percent."

    More rubbish. Barbados shareholding is over 50%.

    And "In response PM Browne said: “The various governments continue to support LIAT to ensure that it stays within the air. Perhaps someone may have made a statement, I am not saying that without the support that LIAT could not collapse, but the reality is LIAT still has the support of the four shareholder governments and we will not allow it to collapse.”"

    Do I fall over laughing now, or wait until PM Browne eats his words? LIAT is not going anywhere, the taxpayers will just have to suck it up and pay - because their particular elected dictator says so.

    Soon we will have to call LIAT the Cuckoo and Antigua the Nest... because the Cuckoo is going to keep flying over the Nest as long as the inmates continue to live there. Or there is real change - but we all know THAT's not going to happen.

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  8. Why must the rest of us, pay for the wealth creation created by the misalignment of profitability with employment creation in money-losing hubs and maintenance points in the network? Why?

    LIAT today is a politically sick child that is so emblematic of the CARICOM idea. LIAT will still run, even it is comatose.

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  9. the reason they sinking is cuse of their sloppy service and they always damn late if we have to purchase they should pull up their socks

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