ST. JOHN’S – LIAT CEO Ian Brunton has sought to explain the “perfect storm” which he said led to the “meltdown in the network” that resulted in LIAT passengers facing lengthy delays and cancellations all summer.
“We apologise to all our travelling public that felt that they were hurt by us and we did inflict a lot of pain on people,” Brunton said.
The LIAT CEO said a failure by stakeholder governments to deliver on committed finance, difficulty in selling Dash-8 aircraft and a 10 per cent decline in revenue combined to leave the airline in dire financial straits.
LIAT also came under pressure from the fleet renewal and grounded planes, according to Brunton. He noted out of US $27.4 million committed to by governments, only US $13.5 million has been received.
“That’s a big deficiency in the money that we needed,” he said.
Making matters worse, Brunton said there was a 10 per cent decline in revenue in 2012-2013, representing at least US $30 million less revenue. The third factor was the inability to sell two Dash-8 planes because of paperwork lost in the June 2012 hangar fire.
“By now, we should have been able to sell two Dash 8s … (For) over US $4 million each,” Brunton said.
Over US $800,000 was spent in recovering records and Brunton hopes one plane will be sold this week. Brunton said this meant cash was hard to come by for LIAT, which has posted combined losses of almost EC $80 million since 2010, and had an accumulated deficit of about EC $344 million at the end of 2012.
Despite the situation Brunton said the airline was forced to find the millions needed upfront to secure the two new ATR aircraft that have so far been acquired in the airline’s fleet renewal process.
“No way we could not have paid up front for those aircraft. We would have lost those slots,” Brunton said.
The LIAT CEO said the airline was forced to dig deep into its own coffers because “otherwise it would put us so far back in our business plan.”
Brunton said this left the airline in the unenviable situation of choosing between hiring contract crews, as had been planned for as part of the fleet renewal process or to pay LIAT pilots and employees on time.
This month, the airline found money to hire contract crews but Brunton said many problems remain.
“It was a firestorm without a firebreak and that is why it’s lasted this long. There were more fires being started all the time and there was no time for the network to catch up,” Brunton said. (Antigua Observer)