LIAT has some things to sort out – PM
The former shareholder countries of LIAT (1974) Ltd have nothing to do with the company’s new structure in Administration.
And while there is no question that the government of St Vincent and the Grenadines (SVG) welcomes LIAT (1974) Ltd in Administration to operate in the country, there are several administrative things that must be addressed.
Prime Minister Dr Ralph Gonsalves made these remarks on Monday, December 7, in response to comments made by Antigua and Barbuda’s Prime Minister, Gaston Browne who reportedly said that SVG and Barbados were making deliberate attempts to block the operation of the regional airline.
Browne’s accusation followed developments that resulted in the airline having to suspend services to Barbados and SVG, which it had previously announced as destinations, while it awaits the approval from the relevant authorities.
“Now, you cannot however just return an airline like that. There are a number of things that have to be put in place administratively,” Gonsalves said on Star Radio this week.
LIAT is currently under Administration, with the administrator being Cleveland Seaforth of BDO Antigua and Barbuda.
The Antigua based airline announced in November the resumption of flights five days a week to seven destinations. And this is the first time that the regional carrier has operated since it suspended commercial services in March due to the COVID-19 pandemic.
Gonsalves, who is the former chairman of the airline’s shareholder countries, explained that LIAT (1974) Ltd and LIAT (1974) Ltd in Administration are entities with two different governing structures.
Under the legal process taking place, the airline company has a court appointed administrator and no independent management.
The Vincentian prime minister gave an explanation of the administrative issues that needed to be addressed before LIAT could fly in SVG once again, since its suspended operation earlier this year.
He said the management of the Argyle International Airport (AIA) needed to receive formal communication from LIAT (1974) Ltd in Administration to address three things: office space, cargo and ground handling.
Gonsalves noted that LIAT (1974) Ltd owes the AIA over $9 million, and the country, over $14 million in taxes and other fees, which the government has agreed to write off.
He said Corsel Robertson, chief executive officer of the AIA informed a LIAT representative that correspondence needed to take place between AIA and LIAT’s company in Administration to work out contracts in relation to office space, cargo and ground handling.
“They subsequently sent that letter and AIA prepared the contracts and sent them the contracts for the office space, because they had five offices really, now they’re going to have three because they’re a slimmed down operation,” Gonsalves said.
He also disclosed that “the board said to the management, I didn’t know this, the board said to the management that given the way in which you have…not paid in the past, this new entity or this LIAT in Administration with a new structure, we would like any place where you’re going to rent to pay us two months’ rent in advance”.
The prime minister said he was informed that LIAT responded that they would pay one month’s rent in advance.
Robertson indicated that she believes this to be acceptable and that AIA was prepared to agree, once the chairman of the board, Garth Saunders endorses the decision.
“Is not a lot of money you talking about you know, maybe about $4000,… but the point is this, we don’t want to start – remember we are writing off $14 million you know,” Gonsalves said, noting that all other airlines, including Caribbean Airlines and American Airlines make their payments on time.
He added that SVG would be foolish to purposely block LIAT from operating in SVG because the country is interested in the traffic with passengers and with cargo.
“…We are not being unreasonable at all, but it can’t be a freebie. Is the taxpayer who has to pay to upkeep the airport when the services … which are being provided when the facilities are not being paid for by the airlines,” he said.
Gonsalves said LIAT has since indicated to AIA that the regional airline will continue to do its own ground handling and that is another matter that will be sorted.
“The point I am telling you, is the people who are giving Gaston the information out of Antigua, are not giving Gaston the correct information about their own tardiness in dealing with matters in a business-like way.”
LIAT, in a release dated December 5, said the airline has valid flight approvals which have not expired.
Gonsalves said there is no problem with regard to these approvals, as the Air Transport Licensing Authority have accepted LIAT (1974) Ltd in Administration as the entity as successor to LIAT (1974) Ltd in terms of its permit to come to SVG.
This permit is issued to all airlines on an annual basis and is scheduled to expire at the end of December.