Tussle over LIAT’s future
By George Alleyne
Facing continued financial
struggles the Caribbean’s dedicated
air taxi service, LIAT, is about
to be closed but that decision has
given rise to a dispute among
regional prime ministers on what
should replace this service.
Antigua and Barbuda’s PM Gaston
Browne recently announced
that with the airline bleeding
money it will be liquidated to be
replaced by a new company, but
while his vision was re-starting
another entity using the assets left
after bankruptcy procedures, his
Barbados counterpart Mia Mottley
however declared that there
are six small air service providers
ready to fill the opening.
“I can report with certainty
that since announcements were
being made earlier this week
about LIAT’s demise, six airlines
have come forward offering to fill
the space,” Mottley said days ago,
adding “we are satisfied that these
six airlines can more than fill the
immediate gap, particularly given
the reduced traffic within the
COVID-19 pandemic. There are
other private sector players who
have also expressed an interest
in being able to see how they can
work either on their own or with
some of the existing players.”
Caribbean L 14 ife, July 10-16, 2020
But Browne, on whose twinisland
state LIAT is based and provides
significant employment, last
Saturday reacted furiously to this
suggestion of replacement services
declaring it will not fall, “prey
for no rinky dinky airline.”
“If we’re not careful, the decentralization
that I see taking place
here and which some heads of
shareholder governments are
pushing for, you’re going to end
up with a whole heap of rinky
dinky airlines, small rinky dinky
airlines, and you will see a reduction
in service quality and you will
also see a reduction in passenger
comfort and safety,” he said.
In previously announcing a
need to fold the financially faltering
airline, Browne had said the
COVID-19 pandemic, “increased
the losses exponentially,” against
a backdrop of it losing $4.440 million
in all of 2019.”
The pandemic that saw Caribbean
territories closing their air
and sea borders, however, led to
the airline’s grounding for several
months.
“They have to pay the lease
payments and they are not getting
any revenue,” Browne pointed out
and said “a decision will have to
be made to collapse it and then
maybe the countries within the
region will have to come together
to form a new entity.”
Browne’s envisioning that the
airline be closed, get its finances
in order, then to re-launch as
another LIAT company is not new
to the entity.
The service began humbly as
a privately-owned air transport
provider in 1956 and was allowed
to fold then bought out by a consortium
of 11 Caribbean territories
when it faced similar financial
challenges 18 years later and
renamed LIAT (1974).
Now owned by only four Eastern
Caribbean islands, and the
Antigua PM conceded circumstances
Antigua and Barbuda’s Prime Minister, Gaston Browne.
Photo by George Alleyne
are different in moving to
another firm as ‘LIAT 2020.’
“I do understand that there are
a number of stakeholders that we
have to satisfy, especially creditors
and I believe that we could
do a work out with the various
creditors and to literally get some
arrangement in which they can
accept that we are not conveniently
closing LIAT 1974 Ltd. The
governments cannot go any further
with it.”
Nonetheless he insisted, “we
should not be running away from
the name LIAT.”
“LIAT is a Caribbean institution
built by Caribbean people of
which we should be proud.”
Not denying the usefulness of
the 1974 company, Mottley however
countered, “while LIAT has
been a critical part of our history,
there is also a time when those
instruments that have served us
well in the past, may not be the
right instruments for us going
forward.”
The challenge Browne faces
is that his country is a minority
shareholder, Barbados is the
major shareholder and Mottley is
reportedly supported by the other
two minority owners, Dominica
and St. Vincent and the Grenadines.
Prime Minister, Mia Mottley.
Photo by George Alleyne
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