LIAT is no more – A few thoughts!

It was a mere few days ago that LIAT’s CEO announced that the airline was going to extend its suspension of service until July 15 while they monitor arrangements for the reopening of countries in the region.

Then came the announcement by the PM of Antigua/Barbuda that LIAT was to be liquidated. I am not sure why the announcement was made by Gaston Browne, but with LIAT anything goes. For most persons, the announcement about liquidation would not have been a complete surprise. We knew for a long time that LIAT was in intensive care. Efforts at surgery as emerged with various plans for reorganisation came to nothing. It was not too long ago that we heard about the possibility of the headquarters being shifted. Actually, I smiled because I knew it was not going to happen. It is easy now to put the blame on COVID -19, but we know that the airline had for long been in deep trouble. COVID-19 just exposed its nakedness.

Two major issues emerge; the payment of dues owed to staff which we are told amounts to EC$94 million. Then the decision on the entity that will replace it! I am surprised that LIAT workers seemed not to have been considered in the different economic stimulus packages provided by the Shareholder governments! Workers need to be paid. What are the legal ramifications, I do not know, but morally they must be. This has to be on the table. Then LIAT’s replacement: Already we hear talk of having the name LIAT remain. The Antiguan PM said that with the 1974 collapse of LIAT, a new entity was agreed on within a day, but that it might be more difficult to do it now within that time frame. Listening to Gaston Browne it appears that the issue of the headquarters of the new entity is settled. While there is talk about Government/private sector arrangement one gets the impression it’s going to be with government in control. Come on there must be a total rethinking.

Part of the problem with LIAT was government control. This appears very obvious. In fact, if it were a private sector operation the Board would have been fired long ago. One of the problems facing the airlines was that fewer people were flying because of the cost, the fares being exorbitant because of government taxes which made up more than 60 percent of the cost of the ticket. I must plead ignorance about the issue of landing fees. Were these waived? The President of the Caribbean Development Bank had complained about the failure to implement corrective measures agreed on. The PM of St. Lucia has for long decided that St Lucia would not be a shareholder unless there was a reorganisation of structure and operation. I guess that is why LIAT had only four shareholder governments.

There is little doubt that there must be a rationalisation of regional air transport, which means that other carriers that serve the region must be brought into the equation. We have heard of One Caribbean and SVG Air. So much for that, but I am hearing little of the major Caribbean air carrier, Caribbean Airlines. When CAL first asked for landing rights in SVG, they were refused on the ground that they were being subsidised on fuel and therefore would provide unfair competition for LIAT. Since then with the need for international carriers they were given rights also to run a service with Trinidad.

Many studies have been done about LIAT. These are most likely gathering dust somewhere. The wheel does not have to be reinvented. Look carefully at these studies. Widen the base of those tasked with the duty of creating this new entity. Remember while doing so that we are looking at service to the region and avoid focusing on economic benefits to any particular country. Now is a chance to make a new start. Let us not spoil it this time.