Owen Arthur has warned his former counterpart in the Caribbean that the beleaguered regional carrier LIAT won’t survive their imposition of hefty airport taxes.
The newly appointed chairman of LIAT – who, when Prime Minister and Minister of Finance, himself raised a raft of travel taxes and fees to pay for the expansion of the Grantley Adams International Airport – was giving early assessment of what is required to rescue the airline.
He told the Voice of Barbados on radio call-in programme, Down to Brass Tacks, of his conclusion that the rising airport fees continue to be the obstacle to the dream of affordable regional travel and the viability of LIAT, currently owned by Barbados and three other Eastern Caribbean governments.
Arthur revealed that he plans to meet with the CARICOM heads in order to discuss LIAT’s rescue plan, noting that the changes needed rest in the hands of his former colleagues.
His former deputy – Prime Minister Mia Mottley – assumed the chairmanship of the regional bloc as the year began and is preparing to host fellow leaders for CARICOM’s mid-term summit, known as the Intersessional.
Arthur said: “There are a number of matters relating to LIAT that only the governments can help with.
“I am not going to put all of the responsibility on the governments, but it is a fact there are some problems that can only be resolved by the governments.
“It is a fact that a dramatic proportion of a cost of an airline ticket on LIAT is government taxes and these are things which must be addressed.”
Arthur noted that departure taxes have risen by as much as 700 per cent in some territories within the last two decades.
He said: “This explains why the cost of a ticket is as high as it is to the travelling public and it is important if LIAT is going to be put on a more viable footing where more of its liability comes from increase seating rather than governments’ taxation.
“We need to come together to determine what is in the best interest of LIAT.”
The LIAT chairman pointed out that LIAT was not the only airline to have serious problems, but while other carriers can simply shut shop with repercussions only to investors, LIAT service goes beyond a profit-making exercise.
He argued that so far, the airline’s workers are the ones who have borne the brunt of its efforts to stay in the air and that this was simply an untenable situation.
He declared that while the airline may never turn over huge profits due to the social component, it certainly can get to the stage where it functions efficiently.
Arthur told the VOB programme: “LIAT has not been without a number of studies and what we are seeing now is very clear that action is needed by the shareholder board to put it right.
“This region needs an inter-regional carrier and it is going to be very difficult to make this type of service highly profitable, we can make it efficient and make it provide a public good at a reasonable price.
“We want to start that process because the fares are simply too high.”