Owen Arthur in new LIAT chair but …
By George Alleyne
Former Barbados Prime Minister,
Owen Arthur, was Thursday
appointed new LIAT chairman
and with the announcement
this week also came news
that travellers will have to wait
another two years for 25 percent
reduction in fare charges.
Information on the deferred
Caribbean Development Bank
(CDB) recommended decrease
dampened enthusiasm associated
with appointment of the
veteran economist, Barbados’
most successful leader financially,
though he was not behind
the decision.
Reports coming out of Antigua
quote Prime Minister Gaston
Browne saying that the
deferment decision was taken
at a meeting of government
owners Monday.
CDB the main lender to the
struggling airline, had recommended
in a 2018 report this
lifeline to most small Caribbean
territories should cut is fares
by 25 percent, positing that
lowered fares would result in
increased travel, by 10 percent,
and make up for the initially
lost revenue. That economic
move was supposed to begin
in 2020.
Browne however said after
the shareholder governments
meeting, “the problem is
whether or not we have the fiscal
space to give up 25 per cent
of that revenue”.
Liat’s airfare comprises 50
percent taxes and fees.
Browne said the company
needed additional time to
reduce more of its debt that
is being repaid mainly by the
taxes, “what we have to do is
hold taxes for the time being
and maybe in a few years we’re
in a better position especially
with reduced the debt then we
can have a reduction.”
Though the Antiguan prime
minister gave a two-year timeline,
he explained that the fare
reductions will be phased in,
meaning that 25 percent reduction
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is further away than two
years.
He said that to cut that
amount in one fell swoop
would, “create a fiscal problem
or, let’s say, financial challenge
for all of the airport authorities
within the region.”
Liat’s previous long-serving
chairman, Jean Holder, had
retired and the Barbados Nation
newspaper quoted Browne saying
that Arthur was a natural
choice for the position.
“Owen Arthur spent a large
amount of his prime ministerial
equity ensuring the survival
of LIAT, and now that it is at
the crossroads again, I think he
is the right person to lead LIAT
out of these difficulties.”
A Liat statement indicated
that among Arthur’s early
tasks is “to undertake a special
assignment to meet with
regional prime ministers to discuss
sustainability of the airline.”
Arthur, prime minister from
1994 to 2008 and currently
a professor of practice at the
University of the West Indies,
pointed out to the Nation newspapers
that during his PM tenure
the regional airline was at
one period about to fall into the
hands of now-disgraced billionaire
Allen Stanford but a group
of Caribbean shareholder governments
intervened to keep it
flying under the LIAT banner.
“We said we were not going
to let that happen, and that
is how Barbados became the
majority 49 percent shareholder
in LIAT.”
He said regional air travel
could have been put at risk
had Caribbean governments
allowed LIAT to fail.
Arthur added that LIAT also
enabled Barbados for many
years to remain an airline hub
for the Eastern Caribbean and
develop its tourism product
to what exists today. “Barbados
owes a lot to LIAT,” he
stressed.
Former Barbados Prime Minister, Owen Arthur,
Photo by George Alleyne
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