Prime Minister of Antigua and Barbuda Gaston Browne has certainly got a bee in his bonnet. And who could blame him? When it appears that the livelihoods of hundreds of Antiguan employees of LIAT 1974 Ltd located in his homeland are under threat, the political leader, as most politicians are wont to do, has sprung into defence mode.
The blistering letter he recently penned to his Caribbean Community (CARICOM) colleagues over their planned liquidation of the beleaguered regional air carrier, left no doubt that the Prime Minister is angry. The airline’s employees will certainly feel well represented and that there is someone defending their cause.
“It is also troubling to my government that shareholder governments in LIAT 1974 Ltd would decide by majority vote to liquidate the airline without putting in place any arrangements for meeting obligations to creditors and employees,” Browne said as he justifiably criticised the move.
But after the terse words and harsh subtext that left Caribbean observers with the impression that there is still a major insular divide among regional leaders, there is a reality that has to be reckoned.
Taxpayers of the region, mainly in Barbados, St Vincent and the Grenadines, Antigua & Barbuda, as well as Dominica, have not been privy to audited financials of the airline their hard-earned dollars support. We have been told that the carrier registered $12 million loss last year.
With the COVID-19 pandemic upending just about every aspect of economic activity in the region, particularly tourism and travel, there is little to no wiggle room for what some might describe as Prime Minister Browne’s baby project. We know how difficult job losses are. In Barbados and throughout the Caribbean, the stark evidence manifests itself on a daily basis.
We are more than certain that were Barbados not in the grips of an International Monetary Fund (IMF) programme, where holders of most Government paper have had their returns slashed, hundreds of civil servants relieved of the jobs, state budgets cut to many agencies, Barbados would certainly splash a few more millions on the air carrier.
Caribbean governments simply cannot, in the turmoil that is 2020, pump millions of dollars into this hole that is a perennially failing institution, no matter how important the public good that it ostensibly provides.
The airline’s problems continue to revolve around its ability to take on additional debt with its key financing source, the Caribbean Development Bank (CDB). LIAT reportedly needs more than US$60 million (BDS $120 million) to keep it in the skies.
It is time for Mr Browne to face the truth. As difficult as it may seem, the private sector will have to fill this void of connecting leisure and business travel, particularly within the Eastern Caribbean. Some of the expertise employed by LIAT will obviously find its way to the many privately-operated airlines who are chomping at the bit to service routes. The sky will not fall if LIAT is liquidated.
Regional travellers will have to accept the risk that airlines could fail. Over the decades we have seen many of them come and go. It will be for the fighting fittest to survive and that’s what is desirable in the market place. Whoever comes in will have to employ top quality service with competitive pricing.
We know that the bitter aftertaste of RedJet is still on the tongues of many Barbadians, but it is the chance we will have to take or we will forever be troubled by the millstone that LIAT has become.
