Prime Minister Allen Chastanet, asked by reporters Monday whether Saint Lucia would be willing to invest in loss-making regional airline, LIAT, responded in the negative.
“The answer would be no,” Chastanet said at a pre-cabinet news briefing.
But he later went on to explain that on a matter of principle, Saint Lucia would consider providing support to the carrier once specific conditions were met.
“Clearly, I don’t need to say it, it is there for itself – LIAT almost nine years ago was given a new lease of life and LIAT had complained bitterly about the level of competition in the region,” he recalled.
Chastanet, a former Tourism Minister, said in those days Caribbean Star, EC Express and other carriers existed.
He told reporters that all of LIAT’s debt was wiped off and the airline was recapitlaised through the Caribbean Development Bank (CDB) in excess of seventy million dollars.
Chastanet said new planes were brought in and in the past nine years LIAT has operated relatively competition free.
He noted that an alliance has been put together in which there is no competition.
But Chastanet said LIAT has now found itself back in a position of insolvency.
He disclosed that a proposal has been made to this country to provide a one-time cash investment of some $US 600,000.
“They would also like us to consider doing an MRG (Minimum Revenue Guarantee) on specific routes. So whatever routes we would like to see LIAT continue to fly on that we would pay an MRG. If we took all of the routes that are currently flying, they are saying that would cost us about $US 1.6 a year in order to maintain this existing route structure,” Chastanet explained.
He asserted that Saint Lucia’s position is very clear.
“We would not consider doing any of those things unless there is a significant restructuring of LIAT – that we would know that the cost of running LIAT is not going to be what it currently is,” the Saint Lucia PM stated.
He said that on a matter of principle, Saint Lucia would be willing to support LIAT but under certain conditions, including its restructuring to provide service to the region in an efficient and cost effective manner.
Chastanet also said Saint Lucia believes there needs to be competition.