Wednesday, November 13, 2019

Saint Lucia, Other Caribbean Countries Being Urged To Buy Shares In LIAT

Antigua Observer:-  There are fresh calls for more Caribbean countries to consider investing in the Leeward Islands Air Transport (LIAT) even as it continues to reel from losses amounting to millions annually.

Prime Minister Gaston Browne said this was the consensus reached by Caribbean leaders who attended the just-concluded 30th Inter-sessional meeting of Heads of the Caribbean Community (CARICOM) which was held in St. Kitts over a two-day period last week.

LIAT’s main shareholder governments are Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines.

Browne said a move is now afoot to encourage the governments of St. Kitts and Nevis, St. Lucia, Grenada and Guyana to come on board and purchase shares within LIAT.

“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 during an interview on Pointe FM on Saturday.

He also stated that even if the cash-strapped airline is to collapse, it would have to replaced, underscoring the point that people have to be able to move within the region.

“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.

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.

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.

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.

Meanwhile, the country’s leader is not taking too kindly to recent statements made by Trinidad and Tobago’s Prime Minister, Dr Keith Rowley.

On his return to Trinidad following the the CARICOM Heads meeting, Dr Rowley warned that LIAT has enough cash to function for the next 10 days and will face a shutdown if CARICOM does not intervene.

He also stated that the faltering airline needs an immediate cash injection of some US $5 million to keep flying.

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.”

18 COMMENTS

  1. I dislike LIAT as much as anybody but he has a point without LIAT regional travel would significantly decline

  2. Investors are strictly motivated by profits. No investor wants to subsidize a faltering business entity that has a long record of losing millions. I personally want LIAT to become profitable and continue to be the leader in intra regional travel. I also wish that LIAT’s management style would be restructured so the other governments would see it feasible to invest and keep it afloat.

  3. My first trip to Trinidad from the BVI cost me $198.00 US round trip in 2005. Today it now cost over $800 to over a thousand dollars to make the same trip with the same distance, why? LIAT making money what they doing with it? And don’t say it’s the airports fees and fuel that have the ticket price high. Greed and mismanagement is why it is in the predicament it’s in and guess who will have to absorb the cost of getting LIAT back to where it need to be, yes we, the hard working customers that want to visit our families, those that desperately in need of a vacation or those who just trying to get back home. Some countries have other options to fly but those that don’t, feel the full brunt of LIAT and they don’t care. Some of their polices if not all is just to make money, so use the money you milk out of use and will continue to milk out of us to get by.

  4. What sort of business would need that level of support from time to time? This is pure BS. If flights were free then sure, let’s give them our tax dollar. But it is not. Liat flights are more expensive than flights to the US. And LIAT is also booked. They are clearly doing something wrong if they are not profitable. If a business cannot stand on its own, then let it die.

  5. @realist Without LIAT regional travel will not decline because another private carrier will take advantage of the collapse of LIAT and we in the Caribbean will have to accept whatever we are offered as airfares. This is what the shareholders are fearing.

    • If the cost of airfare costs increase greatly the air traffic would by logic decrease because it would too expensive for ordinary citizens to travel. So regional travel would declined

  6. So here’s how this works: LIAT is badly run, with incompetent management, bloated workforce and at best, questionable political leadership. It runs into financial difficulties, and everyone says it’s too important to fail. We must inject more money. So governments and CDB inject more money. LIAT continues with the same people doing the same things. It runs into financial difficulties. Everyone says it’s too important to fail, so we must inject more money … etc. Rinse, repeat.

    Meanwhile, we ensure that we make it as difficult as possible for any competitor to succeed, since LIAT is a sacred cow that we must protect at all cost. Even if that leads to a 30% drop in intra-regional travel (while we promote “free movement”).

    If we want to fix things with LIAT, we’ll first have to admit that what we’ve been doing for the past 45 years has not worked, and the people who we have at the helm are not able to fix the problem. Otherwise, we know that any money we put into LIAT is going down a black hole.

    It’s interesting that as tight as Kenny was with Ralph Gonsalves, when he was in power not even he could be persuaded to invest in LIAT.

    • Your observations are bang-on. LIAT was created in a very different era. Economies, markets, available airlines, technology, managing efficiently and in a results-based manner — all of these elements have evolved.

      LIAT, unfortunately, has not. They remain, to this day, a spoiled, bloated and out of touch organization with a corporate culture of unjustified self-entitlement because they mistakenly believe that the caribben will fall apart with out their priceless presence.

      It is time to face the reality — LIAT is not financially sustainable and remains a money-sucking albatross around the necks of those governments that continue to fund it.

      It should either be:
      (1) Put up for sale, lock, stock and barrel to other airlines, such that new talent can tear it apart and craft something both efficient and profitable.
      (2) Funding wrapped up, services ceased and a transition plan implemented for sale of all assets within a bankruptcy framework.

      Such restructuring has taken place with airlines of all sizes throughout the world.

      There will be those that counter with an argument based on LIAT and the needs of the Caribbean being unique. Newsflash — regarding air service needs, the Caribbean is not unique in the world — it is not a snowflake, nor should we blind ourselves in foolish belief that it is.

      There is no place for financial dinosaurs. LIAT is both a financial and cultural dinosaur, through and through.

      Time to put LIAT out of its money-wasting misery.

      God Bless.

  7. LIATS air fares are to expensive for us the ones that live in the Caribean,you are charging more than what air line companies in the USA charge .If all of us in the Caribean earned the salaries that workers in the USA earn,then we would not complain.A monthly salary in St Lucia,is far better than Jamaica,Guyana and other islands,so if we are suffering,what about the other islands.LIAT has a personel problem,the location of its head quarters is a big problem,acountability is a disaster.All that has to change before you could ever dream of enticing investors to buy shares.Right now LIAT is going nose down.

  8. Chas sell race track and buy LIAT,after all you are a flyer,you love planes,we allways have to pay,for your flights,here is your chance to make history,..sorry …yourstory.

Comments are closed.

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