Grenada is now a shareholder in the financially burdened airline, LIAT.
The revelation came this morning from Grenada’s Minister of Trade, Industry, Co-operatives and CARICOM Affairs Oliver Joseph, who was addressing that island’s weekly government press conference at his St George’s conference room.
“I am pleased to announce that Grenada is now the fifth shareholder in the airline,” said Joseph.
The decision was taken following the latest round of meetings between airline officials and representatives from other shareholder countries.
The major shareholding countries are Barbados, Dominica, St Vincent and the Grenadines and Antigua and Barbuda, where the airline is currently based.
Grenada’s involvement comes as regional governments continue to seek out a viable restructuring plan to save the over 60-year-old island-hopping carrier from going under.
LIAT’s Chief Executive Officer Julie Reifer-Jones has already given the assurance that the airline would continue to operate its full flight schedule.
Joseph revealed that a minimum revenue guarantee framework would be used to provide funding, one that officials are pushing so that countries who benefit from the airline’s service would contribute.
Under this model, it means that should a flight from Grenada to another island fail to have full capacity, St George’s would contribute a minimum guaranteed amount for the empty seats to ensure the flights remain.
Joseph said: “Grenada pledged to continue supporting LIAT . . . that is a model we think is fair if we want to keep the LIAT flying.
“It means that the cabinet has taken a decision to continue to support LIAT. When we look at the figures, the number of passengers LIAT brings to Grenada… of course the multiplier effect is great,” said Joseph as he justified the decision to join in the funding of the airline.
“LIAT brings in thousands of visitors to Grenada every year and therefore from an economic and social point of view, Grenada had to support LIAT, because not supporting LIAT would have been a loss of revenue and economic development to our country,” he added.
Grenada’s decision to fund the airline also comes amidst reports that founder of the Virgin Group Sir Richard Branson had expressed interest in investing millions of dollars in bailing out the cash-strapped airline.
Recently Chief of Staff in the Office of the Prime Minister in Antigua and Barbuda, Lionel Hurst, told reporters that discussions were held between the cabinet of that country and the business magnate.
“The entrepreneur has proposed investing several million dollars. He would wet lease several aircraft – jets – and they would fly from Fort Lauderdale to Jamaica, Haiti and down into Antigua and Barbados. The whole idea is to enlarge LIAT, rather than collapse LIAT or making it a smaller entity,” Hurst said, explaining that this would allow the air carrier to fly to destinations outside the region.
LIAT’s financial woes deepened after it suffered a major blow when it lost millions of dollars as a result of the passage of Hurricanes Irma and Maria in September 2017. Some destinations including Dominica and Antigua and Barbuda, were left battered, forcing the airline to cancel its services or operate reduced flights for several months.
Recently, concerns were raised that the airline could disappear from the skies if some US$5.4 million was not provided and critical restructuring did not take place.
The Keith Mitchell government in Grenada responded to the concerns by pledging about EC$1 million towards an emergency fund for the airline.
While acknowledging that the operations of the carrier needed restructuring, Joseph told journalists this morning that unless this was done and unless it received necessary funding, some routes would have to be cut.
“At the meeting, Grenada insisted that LIAT should operate as a business and that the operation should be restructured. And so, as a shareholder we will make our voice be heard at the board meeting,” he said.
As part of the restructuring process so far, pilots have agreed to take a pay cut. However, given the magnitude of the airline’s financial woes, officials have already indicated that this was not enough, and further restructuring was urgently needed.
The airline, which currently employs over 600 people and operates 491 flights weekly across 15 destinations, was fraught with labour disputes between 2010 and 2013. Despite, recent improvements, LIAT has struggled over complaints of poor customer service, delayed flights and leaving passengers stranded.