Caribbean urged to invest in LIAT

Jamaica Observer:-The Government of Barbados is urging more Caribbean countries to consider investing in Leeward Islands Air Transport (LIAT) even as the airline continues to reel from losses amounting to millions annually.

Minister of Tourism and International Transport for Barbados Richard Sealy, who was speaking to Jamaican journalists at a Sandals press conference in the eastern Caribbean Island on Friday, said that it is “extremely difficult” to run the problem-plagued airline, which has its headquarters in Antigua & Barbuda.

Barbados is the airline’s largest shareholder with 49.5 per cent, Antigua & Barbuda 13 per cent, St Vincent approximately 12 per cent, and Dominica less than 10 per cent.

“We are the largest shareholder in LIAT which is even more difficult to run than CAL Caribbean Airlines) or Air Jamaica or any of those airlines,” Sealy lamented.

The airline is projected to lose EC$9 million this year, having lost $EC56 million in 2015 and is operating with an accumulated deficit of up to EC$344 million. “These are very large numbers,” Sealy stressed.

He added: “The Barbados Government and even Antigua, St Vincent, and Dominica, the four major shareholders, they are really disproportionately carrying the load for the rest of the Caribbean.”

The minister said that what has also been “unfortunate” is the stance of “some of the countries that have not been putting money in LIAT, [but] are very vocal in the manner they go about announcing that they’re not putting any money in LIAT.

“You’re happy to stick your straw through the fence and enjoy the benefit but not putting anything in. There are people who disagree with me but I believe very strongly that if you were to look at countries in the OECS (Organisation of Eastern Caribbean States) they would probably collapse if they didn’t have LIAT servicing them. It’s one of those things we have to look at, but I can tell it will not continue like this forever. We’ve had success in dealing with the large losses, but we are still losing money,” he argued.

LIAT currently has 10 aircraft servicing 18 countries with some 700 flights per week.

“I remember meeting with a top executive from a US airline and he has a stellar career, and he said he would never want to run an airline like LIAT. The reason is it is extremely difficult. The most difficult part of a flight is the landing and take-off and all LIAT does is land and takeoff,” Sealy said.

Added to that, he noted that the airline has had to face other challenges, including union and management public stand-offs.

“The airline was operating at a massive loss as most airlines seem to do in the region. We’ve been able to reduce the number of staff working there [and] we’re down to 669 people working there. We had 1,200 before; it went down to 900 plus, and that has put a lot of challenges into the airline,” he said.

As a result, Sealy said both management and staff are forced to carry out their duties under “enormous pressure” and “difficult circumstances”. “It is extremely difficult; we try our best,” the minister said.

At the same time, Sealy concluded that some suggestions put forward to combat the airline’s problems are worth exploring.

“People say, especially this part of the Caribbean, ‘Well why not try high-speed ferry.’ I don’t have a problem with that and if there are private sector interests that want to go down that road, we will certain facilitate as much as we can…But we have to be serious about that. To try to substitute aviation travel with maritime travel, it’s really like a backward step. That is where we were, but I think that if we should do it, could supplement what we’re doing? Encourage more movement between the islands? …But I don’t know that you should substitute one for the other,” he said, adding that it was important for aviation players understand that it is a capital-intensive business.

“It is not cheap to buy an aircraft and it is not cheap to maintain it either. So we are in the business of something that is hugely expensive and totally necessary, and therefore, we can only look to minimise the cost.

“LIAT is extremely difficult. I would think that, certainly, at this structure it is very difficult for LIAT to be thinking in terms of being profitable. You have to be viable so the impact of the cost can be minimised and the ratio shared better among those countries that benefit from the service. I think it’s fair to say that that is not current right now,” Sealy said.

 

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5 Comments

  1. Anonymous
    October 31, 2016 at 12:27 pm Reply

    You eh see dem people mad. Barbados bawling now because they are in the hole with LIAT. SO now they want us to come and take off some of the load by eating some of their bad investment. LOL

    1. Anonymous
      October 31, 2016 at 3:19 pm Reply

      Agreed. Look at the prices of fares. Express costs 300 to go to Martinique. LieAT is how much. I can pay 400 US to go to NYC on JetBlue and 350 to go to Antigua. Where you do you think I am going? LieAT is making the money. In this era of low oil costs US airlines are making record profits, yet LieAT making losses. Nonsense. I fully agree with Chastanet. Not one cent of our money going in that garbage airline.

  2. James Lynch
    October 31, 2016 at 5:06 pm Reply

    Reminds me of a line from that old song from decades ago… “Wishing, and hoping, and begging, and praying…”

    Investors, here is some excellent advice: DO NOT PUT A PENNY INTO LIAT.

    When the LIAT shareholders came knocking and shaming on his doors about four years ago PM Kenny Anthony of St. Lucia told the shareholders of LIAT to clean up the airline and his country would consider becoming shareholders again. Nothing changed on LIAT’s end, and so nothing changed at St. Lucia’s end.

    Grenada and St. Kitts have joined St. Lucia in refusing to pour their taxpayers hard-earned money down the LIAT drain.

    Since Kenny Anthony’s polite and reasonable request, the politically appointed Board also (unnnecessarily) took on an additional debt of some US$100 million to change the aircraft fleet. The same person who sold them the airplanes then caused a “meltdown” (his own words) and just about doubled the airline’s loss rate before resigning and scuttling back to Trinidad.

    Barbados actually owns slightly more than 50% of LIAT, and if Barbados wanted to save money and make LIAT more efficient, the politicians – especially (minority) Chairman of the shareholders PM Ralph Gonsalves, who micromanages the airline – would have been kicked out, and the useless political appointee Board would have been swapped for people who actually know something about airlines and aviation.

    The unqualified and inexperienced executive management would have been fired and replaced with professionals – as with the Board, there are several West Indians around who can do the job – but they are the types who will not take orders from political masters. That last CEO, David Evans, was the least qualified among the entire bunch of applicants, but clearly he promised to make no changes in order to get the job (he spent his entire tenure touring LIAT’s destinations, at LIAT’s expense).

    In short, if you put money into LIAT, put the kind of money you would take with you into a casino, because it has to be money you can easily afford to lose. The obtuse, hard headed, contrary politicians are not about to let go of power over LIAT and Gonsalves has already declared in public that LIAT is required to operate at a loss – he is a Marxist, and that is the way he will run the airline whether anyone else likes it or not.

    The big clue, however, is that Barbados is the largest shareholder but has so far done NOTHING to insist that LIAT changes its ways or the way LIAT is operated. PM Stuart is known for his inaction and refusal to make decisions – he is a lawyer and operates 100% on the legal principle of TORT. If the largest shareholder is doing nothing to save their own money but is holding out the cup for contributions, what does that say for the future of the company??

    So, if you should so unwisely become an investor/shareholder in LIAT, expect your money to drain away before your very eyes – and I can guarantee that the same politicians begging and threatening everyone now will be back for more.

    Because remember, if you are an investor/shareholder then without the necessary CHANGE you logically must share in paying for the inevitable continued losses – or see your shareholding percentage wither and die as the others pick up your slack with taxpayer dollars.

    Since all current LIAT shareholders refuse to make changes so that the airline can break even or make a profit, my suggestion is that you leave the losses to the taxpayers and their eventual revolt or the airline’s closure – one or the other is inevitable – and keep your money safe.

    Until politics are removed entirely and _MAJOR_MAJOR_MAJOR_ changes are made to the entire oversight and management of LIAT, the airline’s financial investment status should be seen as “Black Hole” (twelve grave-depths lower than “Junk”) – you and your money are advised not to get anywhere near it.

    In fact, don’t even ask a question… you may get sucked into the yawning chasm without even knowing it, and such will be the end of your investment career.

  3. Sackawinkie
    October 31, 2016 at 8:55 pm Reply

    Sint Maarten to Saint Lucia one (1) way, was US$318; one way; got to look for a return money. LIAT could be filled year round; people want to travel, within/throughout the islands; the fare is far tooo high. Some workers are NOT customer friendly; the “LIAT customer service” need something, someone will coment on the need! The fares are definately too high: sell v o l u m e; you will have your planes full, people need to visit to neighbouring islands.

  4. Disappointed
    November 1, 2016 at 4:27 pm Reply

    St Lucia needs to invest in another airline because Liat has flights for $700 which is ridiculous!!! If they have an average of 700 flights they should be making enough money to service their planes. Apart from the horrible service that they provide. Canceling peoples flights and giving a poor excuse such as maintenance failure. I have been in transit in Antigua and see Liat planes just out there in the lot so to say u cancel a whole flight because one plane broke down is beyond unacceptable. Maybe if they didn’t provide such shitty service then other countries would want to invest in them. Right now if they get competition in the small islands they will lose all their clients. Sorry to say but they did it to themselves

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