LIAT doomed under current ownership – PM Mottley
Prime Minister of Barbados Mia Mottley earlier this week insisted that the regional airline jointly owned by Barbados and three other Caribbean governments is “doomed” under its current ownership, declaring her fellow leaders are “not on the same page” on the future of the cash-strapped carrier.
She also told a town hall meeting at the University of the West Indies at Cave Hill that the island-hopping airline’s viability is not the sole responsibility of CARICOM, even as she declared that sustainable, reliable and affordable air travel is necessary if the regional bloc is to grow.
Mottley, who has lead responsibility for the Caribbean Single Market and Economy (CSME) in CARICOM’s quasi-cabinet, appeared as a panellist at a CARICOM Secretariat-sponsored town hall meeting – CSME – What’s in it for me – at the Errol Barrow Centre for the Creative Imagination.
In a series of frank assessments of the fate of the 63-year-old carrier, she maintained that if the success of LIAT was left in the hands of the shareholder governments alone the regional carrier was doomed.
Mottley said: “Now there are some discussions that have to take place with LIAT.
“LIAT is not a CARICOM issue; LIAT is the issue of three or four governments having to have shareholder discussions.
“Now if you expect the three or four shareholder governments alone to carry the burden then you will end up in trouble each time because it means that at some point they are going to make commercial decisions because there is not a bottomless pit to service it.
“LIAT 1974 Limited is a complex issue and it is complex because it has been losing money for how long.
“But the bottom line is that it does not need to be complex because what we have done is to place the burden of LIAT only on the shareholders without recognizing that routes cannot be sustainable unless there are either financially profitable or economically desirable.”
The Prime Minister said it was still important for the shareholder governments to be united on the future of the airline, which despite a series of challenges in upgrading its fleet, control costs and manage a huge payroll, this year became one of the top on-time carriers in the region.
She hinted that the breakdown in negotiations between Barbados and Antigua and Barbuda on the sale of Barbados’ majority shares occurred because of their inability to come to an agreement.
The Prime Minister declared: “I believe we can solve the problem but it is going to require us coming together and agreeing, and in fairness we tried to, but all of the stakeholders were not necessarily on the same page earlier this year.
“I trust and pray that we can find the common ground for all of the stakeholders because while LIAT 1974 Limited may not be a viable proposition, reasonable, affordable, reliable air travel is the prerequisite for the growth of this region.”
Mottley reiterated the need for a minimum revenue guarantee policy to be implemented at LIAT, noting there was a similar policy at international carriers American Airlines and Virgin Atlantic Airways.
She again stressed that in its current format LIAT was simply not sustainable.
Mottley said: “We need to move to the point where we treat the LIAT planes and the inter-Caribbean planes as almost like buses from the perspective that we recognize that we need to be able to strip out the costs and to be able to have more regular travel, even in smaller planes.
“If they are financially profitable then there is no issue because the profit is after you have taken into account all of your payments, including the payments governments are now paying now for the planes.
“If it is economically desirable then we need to be able have a minimum revenue guarantee such that once the load factor of particular routes falls below whatever the agreed average is, governments who want to sustain those routes say ‘I will pay the difference between the two’ as we are currently doing with American Airlines and with Virgin Airways in many Caribbean countries.”(Antigua Observer)