Signs of a fault line between Antigua and Barbuda and Barbados over regional airline LIAT became apparent today with Minister of Tourism and International Transport Richard Sealy accusing the Gaston Browne administration of shedding “crocodile tears” over the financially struggling carrier.
Speaking this morning at a news conference at the headquarters of the Caribbean Tourism Organization (CTO), an animated Sealy made several references to St John’s as he sought to clear the air on a comment he made in April about the establishment of a LIAT hub here, suggesting that the Antiguan leader had taken his comment out of context.
However, the minister’s strongest criticism came in response to a suggestion from an Antigua-based journalist following the news conference online, who suggested that liberalizing the Caribbean aviation industry could lead to lower travel costs within the region.
Sealy agreed with the participant and all but accused the Browne administration of hypocrisy. “[The participant] should speak to his government because all the noise they are making about LIAT they have Seaborne to compete against the same LIAT that they are crying all these crocodile tears about, of which Barbados is the largest shareholder,” he said.
Sealy also led a stinging rebuke of regional countries that depended on LIAT for much of their air connections but refuse to contribute financially to the airline.
Just this week, St Lucian Prime Minister Allen Chastanet told reporters at the Caribbean Community (CARICOM) summit in Guyana that the airline needed to operate “in the context of the private sector”.
“I have made my position very clear that LIAT needs to be liberalized. LIAT needs to operate in the context of the private sector and I am not convinced that a monopoly in transportation is going to work,” Chastanet, a long time critic of LIAT, said.
In addressing issues surrounding the airline today, Sealy did not make reference to Chastanet. However, he said the airline had “a social responsibility” and if it were to operate as a business a number of Caribbean economies would collapse.
“We recognized that there is a social responsibility that LIAT has, and mindful of that we therefore have to try and make it as viable as we can. The truth is, if you had to run LIAT as a business there are economies in the Caribbean that would collapse.
“There are countries right now that rely on LIAT to the extent where they would probably be at risk of being a failed state if they did not have the LIAT service. It is of course hurtful that some of these countries are the ones that don’t want to put a red cent in LIAT too,” he said.
Sealy, who is also the CTO Chairman, explained that as part of the plans to help LIAT become viable, a decision was made by the airline’s Board of Directors and endorsed by the Prime Ministers of the four shareholder countries, to create hubs in both Barbados and Trinidad and Tobago.
He explained that four aircraft each were to be based in St John’s and Bridgetown and two in Port of Spain.
“We have to be as viable as we can be but still understand the social responsibility that we have to the region and I think it is only fair that we look at these opportunities to make operations more viable because there are taxpayers in the region, particularly the ones in Barbados, who are bearing a disproportionate part of the responsibility to keep LIAT in the air.
“The rational for that, which came from the senior executives, was that because of the flow of Caribbean travel and because of the routes that are more popular and more profitable, it made more sense to have more aircraft based in the southern part of the Caribbean. That was their assessment and endorsed by the board and endorsed by the shareholders,” Sealy said, stressing that Browne was at the meeting at which the heads of government endorsed the recommendation.
He revealed that LIAT made more money from tickets that were purchased outside of the region, and given Barbados’ connection to other international destination, “particularly out of the UK, it was felt that there was an opportunity as well for greater earnings for the organization for making those shifts in terms of the hub arrangements”.
Sealy announced in April that the move to establish the hub here had been “formalized”, more than a year after it was first announced.
“For all intents and purposes I would have to say it is formalized. The shift has taken place and of course it will constantly be reviewed and we will see what we have to do going forward,” he said at the time.
This prompted a strong response from Browne, who fell just short of accusing Sealy of speaking out of turn.
“The minister misspoke. It is true that last year a decision was taken by the Board that there should be some redeployment of assets, particularly the number of airplanes that would be stationed in Barbados. That is distinct from moving the headquarters from Antigua and Barbuda. So the Minister may be comingling the issues,” Browne said then.
Today’s news conference was held to announce Barbados’ hosting of this year’s CTO State of the Industry Conference (SOTIC) from September 14 to 16.
Chief Executive Officer of Sandals Resorts International Adam Stewart will be the keynote speaker at the event.