by Shawn Cumberbatch
Longstanding Caribbean airline LIAT is going to Europe on a special trip, but it is unclear how much the journey, expected to be at about $230 million, will cost Barbadian tax payers.
Two months after officials declined to divulge details of a plan to renew the company’s fleet of aircraft, it has emerged that negotiations to purchase six planes from France-based Avions de Transport Regional G.I.E have started.
And while LIAT Chairman Jean Holder revealed that two meetings had already been held with ATR’s principal’s on the purchase of the half dozen new ATR 42-600 50 seater planes, just how they will be paid for was still to be decided.
Additionally, once a deal is forged it will be another two to three years before the new aircraft bearing the LIAT name are able to take to the skies.
It was in late July at a Press conference in Barbados that shareholder prime ministers and the airline’s management announced they had reached a decision to purchase new planes, but declined to name the manufacturer or related costs.
Yesterday, however, Holder told Barbados TODAY that following that announcement actual negotiations had started.
“The position is that following the announcement made earlier that LIAT is to acquire a replacement for its 50-seater turboprop aircraft, negotiations have been undertaken with the chosen manufacturer, Avions de Transport Regional G.I.E.,” he said.
“These negotiations surround the proposal for the sale to LIAT of six ATR 42-600 aircraft from the manufacturer. The lead time after agreeing to the proposal would be two to three years for the delivery of all six aircraft.
“So far two meetings have been held at LIAT headquarters in Antigua between the respective representatives of LIAT and the ATR company. It is anticipated that there will be another two or three further meetings between the parties before agreement is reached on ATR’s sale proposal,” he told Barbados TODAY.
While senior aviation sources told this newspaper the likelihood was that shareholder governments Barbados, St. Vincent and the Grenadines and Antigua and Barbuda would likely have to contribute some of the millions needed to purchase, Holder said there had been no conclusion to discussions on how the planes would be bought.
ATR Media Relations Manager David Vargas said the current listed price for the planes LIAT is in discussion to acquire was about $39 million each, which meant any outright purchase of six of them would be about $234 million.
Holder said “the on-going negotiations are about price, delivery schedule, payment terms, financing etcetera. We will not therefore have answers to the financial questions you have posed until the negotiations are complete and we sign the proposal document”.
The chairman also noted while the first half dozen planes would have 50 seats like his organisation’s current fleet of planes, that would not be the end of the fleet renewal.
“With respect to the 50-seat aircraft, LIAT has determined that to carry out its present business missions, and cater for growth, it requires both 50-seat turbo-prop aircraft and larger (68/70 seat) aircraft,” he stated.
“The acquisition of six new 50-seat aircraft is the first step. The process for choosing the larger turbo-prop type has started and is expected to be completed later in 2012.
“We are presently refining the mission of the larger aircraft in our business plan to determine the exact number required to execute the plan.” Aviation industry sources questioned why LIAT was favouring the ATRS, asserting purchasing them would not make economic sense.
“I have heard that they have already decided on the ATRs – which is hard to understand as the Q400s are much faster, close to jet speeds, while the ATRs operate at the same speed as the current DASH 8s – the obvious advantage being that you get there faster as a passenger and as an airline you get in more trips in a day,” the source said.