Posted on

Shareholders forecast EC$15m. deficit for LIAT

Shareholders forecast EC$15m. deficit for LIAT

Social Share

LIAT made a net profit of EC$8.9 million in 2009, but the financial forecast for 2010 is that there will be a deficit of EC$15 million.{{more}}

This disclosure was made by Prime Minister Dr. Ralph Gonsalves on Wednesday, February 2, at a press conference at the Administrative Centre in Kingstown, following a meeting of LIAT’s shareholder governments.

It was made clear at the press conference that the shareholder Governments have not been called upon to pump any money into Liat since 2006.

Chairman of LIAT, Dr. Jean Holder, said at the press conference: “Not under my watch.”

Escalating aviation fuel, labour and maintenance costs, and a decline in passengers were cited as reasons for the loss. It was, therefore, announced that LIAT will have to implement some cost cutting measures if it is to survive.

Gonsalves said in 2011, the shareholders are budgeting for a loss of EC$1.5 million. LIAT is anticipating that it will have a two per cent decline in passenger traffic this year.

The meeting in St.Vincent and the Grenadines, attended by Holder, Acting Chief Executive Officer Brian Challenger, and the Prime Ministers of Barbados, Antigua and Barbuda and St.Vincent and the Grenadines, dealt with the operation plan and performance of LIAT, the final report and projections, and human resource developments within the company. The discussion also touched on areas such as LIAT’s staff pension plan which it holds with CLICO, fleet planning and expansion, and the relationship between LIAT and Caribbean Airlines.

Gonsalves, the Chairman of Air Transport within CARICOM, said an executive report delivered by Holder was done against the backdrop of a continuing weak regional and international economic environment, escalating operational costs, increased competition on certain routes, changes in travel patterns and trends. The shareholders also received an update on the launch of LIAT’s cargo freight service, which was done on Tuesday, February 1.

At the meeting, LIAT’s operational performance was also discussed. In 2009, there were 49,127 departures, as opposed to 46,597 departures in 2010. During 2009, LIAT transported 1.4 million passengers and 1.3 million in 2010.

LIAT will be revising its schedule in the summer of 2011. Gonsalves said this is expected to focus on a better streamlining capacity and demand.

Gonsalves further stated that for 2011, LIAT’s human resource management focus will be on improving performance, management and productivity. He added, ongoing initiatives include the development of a five-year strategic plan for the airline.

The shareholders were also asked to pay attention to certain priority public policy areas, such as reform of labour legislation, aviation taxes, and customs regulations.

Gonsalves said the day began with a breakfast session at the official residence of the Prime Minister attended by Freundel Stuart, Prime Minister of Barbados, Baldwin Spencer, Prime Minister of Antigua, and him.

That discussion focused on the current state of the regional integration movement of CARICOM and issues relating to British American Insurance Company and CLICO. (HN)