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”.