Barbados and the three other LIAT shareholder governments today agreed to stick with their February 13, 2015 restructuring plan designed to keep the financially struggling airline from collapse.
The Governments of Antigua and Barbuda, St Vincent and the Grenadines and Dominica, joined Prime Minister Freundel Stuart in deciding not to back out, despite the losses being incurred by the airline, but to invest a further $5 million in short-term capital.
Following a four-hour shareholders meeting at Hilton Barbados, chairman of the shareholder governments, Prime Minister Dr Ralph Gonsalves of St Vincent & the Grenadines, told Barbados TODAY that while LIAT was benefiting from that short-term cash injection, management of the company would try to secure a new loan of an unspecified sum from the Caribbean Development Bank (CDB).
Gonsalves said the money was for working capital and developmental needs. Describing the meeting as very fruitful, he stated: “We reconfirmed our decisions of February 13 for restructuring in accordance with the plan laid out by the management which was approved by the board of directors.”
“We also got a report where there was a satisfactory progress in the implementation of the plan…the restructuring plan. We took some decisions that the management would work actively with the CDB to see if we can get a particular request go to the board of the CDB for the middle of July, and in the meantime we would provide further short-term capital – the shareholders – in the aggregate of $5 million,” he added.
Gonsalves touched briefly on the contentious issue of high air fares by LIAT for travel within the region. The outspoken prime minister said the real problem was the taxes which the various governments have imposed on basic ticket prices. “That’s a significant issue and that has to be dealt with by our governments,” he emphasized.
The LIAT shareholder governments chairman said the meeting also examined the retrenchment of staff, severance payment arrangements and the disposal of the old fleet of Dash-8 aircraft. Gonsalves declined, however, to elaborate on these matters.
Gonsalves and Stuart were the only two prime ministers of the four shareholder governments attending today’s meeting. The other shareholders were represented by high ranking officials that comprised Antigua and Barbuda’s Minister of Transport and Public Utilities, Robin Yearwood and Rosemond Edwards from Dominica’s Ministry of Finance.
St Lucia and St Kitts and Nevis, whose leaders had earlier expressed an interest in buying equity in LIAT and were invited to attend, did not turn up. Among other top officials present included Barbados’ Minister of Tourism and International Transport Richard Sealy and chairman of the airline’s board of directors, Dr Jean Holder.
The move to increase LIAT’s shareholder base comes against the backdrop of a new study on Making Air Transport Work Better for the Caribbean, which has revealed that LIAT, Caribbean Airlines and Bahamas Air were consistently recording losses of about a billion US dollars collectively.
The study, which was carried out between the last quarter of 2014 and March 2015, stresses the need for greater co-operation among regional governments and carriers, including foreign airlines, as well as harmonization of administrative and regulatory policy and operations.
It also calls for the setting up of “a ‘quick-wins’ CARICOM-centric Airlines Association to share best practice and identify cost reduction and revenue enhancement opportunities that could be pursued jointly”.