St. Vincent and the Grenadines (SVG) has paid up its contribution to the $5 million in working capital needed by regional airline LIAT, which is owned by the governments of SVG, Dominica, Barbados, and Antigua and Barbuda.
Prime Minister Ralph Gonsalves defended the investment at a press conference on Tuesday, saying “… for St. Vincent and the Grenadines, LIAT is vital.
“Whether or not we have an international airport, LIAT is vital, and without an international airport, LIAT is an absolute necessity, and, for those who want to think otherwise, they live in cloud cuckoo land,” he said.
SVG is slated to complete its first international airport this year, four years later than schedule.
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Gonsalves also defended the decision of the shareholder governments to relocate the base of the airline from Antigua and Barbuda to Barbados.
He told reporters that the decision taken at a meeting in Bridgetown last month was based on the realities of LIAT.
While the governments of Antigua and Barbuda, Dominica, Barbados and St. Vincent and the Grenadines have agreed to the shift, they also said that Antigua remains an important gateway for LIAT.
Four of the airlines eight ATRs will be located in Barbados, with one ATR-42 and one ATR-72 in Trinidad, and one ATR-42 and one ATR-72 in Antigua.
But Antigua and Barbuda Prime Minister Gaston Browne has written to the shareholder governments urging them to delay the implementation of the new policy.
Browne said that the relocation will result in job losses and negatively affect his country’s economy.
However, Gonsalves said “the decision was taken unanimously with all the shareholder governments present, that is to say Barbados, Dominica, St. Vincent and the Grenadines and Antigua and Barbuda”.
He said that there has been no meeting of the shareholder governments since the Barbados meeting.
“So the decision of the shareholders is the decision that the management has to follow, which the board has to follow until the decision is altered, if altered, by the shareholders.
“One shareholder can say that it would wish a decision other than what was decided, but a decision was made at a shareholders’ meeting,” he said.
“It is clear that the case is not only persuasive, but, to my mind, conclusive based on the data about that happens on the southern cone with traffic,” Gonsalves said, noting that 60 per cent of LIAT’s traffic is between St. Lucia, Grenada, St. Vincent, Barbados, Trinidad and Guyana.
He said that the main revenue destination is the Barbados-St. Vincent route, while the St. Vincent-Trinidad route is number two, while the destination with most passengers is Barbados, followed by St. Vincent.
“Those are the facts. LIAT has to be restructured in a comprehensive manner and that restructuring has been taking place, that’s why we invested all the money in re-fleeting,” he said of the US$100 million spent to replace aging de Havilland Dash 8 aircraft with ATRs.
“… from what the facts are, the decision seemed to have been clear and correct. Now those who may wish that those facts were otherwise, so be it, but I am interested in LIAT surviving, improving its service, delivering a better service to the people of the region, delivering a service which, in all the circumstances is the most competitive that LIAT can deliver.”
He told reporters that the reduction of LIAT’s staff from 800 to 620 will also put the cash-strapped airline on a firmer financial footing, adding that several other decisions were taken at the meeting last month.
“All these decisions represent a composite to keep LIAT in the sky to service us,” he said.