HEADLINES

Barbados urges Caribbean to invest in LIAT

SEALY ... it is not cheap to buy an aircraft and it is not cheap to maintain it

BY KIMONE FRANCIS, Jamaica Observer Staff reporter francisk@jamaicaobserver.com

BRIDGETOWN, Barbados( — 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.

 

Leave a comment