By Peter Richards
GEORGETOWN, Guyana (CMC) — Antigua and Barbuda Prime Minister Gaston Browne Tuesday defended the cash-strapped regional airline, LIAT, from criticism about its performance, saying that if it did not exist “one would have had to be invented”.
On Monday, St. Lucia’s Prime Minister Allen Chastanet had told reporters that the airline “needs to operate in the context of the private sector”.
The major shareholders of the airline are Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines. But the company, which has been suffering tremendous losses over the years, has come in for much criticism from the Caribbean travelling public over poor customer service, delayed and cancelled flights and overall high costs of airfares to its destinations.
Calls by the major shareholders for other governments to invest in LIAT in the past have not been successful with many regional leaders making references to the airline’s financial situation among other concerns.
“Transportation is critical to integration. I have made my position very clear that LIAT needs to be liberalised. LIAT needs to operate in the context of the private sector and I am not convinced that a monopoly in transportation is going to work,” Chastanet said.
But Browne said he has no doubt that LIAT is serving the purpose of moving Caribbean people which is significant to integration and if there isn’t a LIAT, we certainly would have to invent one”.
He acknowledged that there were deficiencies within the operations of the Antigua-based airline,” but some of the problems associated with LIAT including profitability are more about market structure and having more players will not necessarily be making things any different, because the airline industry is capital intensive”.
Browne said that LIAT is spreading very large capital over a very small population base “and that is one of the reasons too why prices are relatively high compared to other large destinations where these airlines are able to spread their capital costs over a larger population base.
“So there are some structural issues that are unavoidable and I have no doubt that LIAT is likely to require some form of subsidy in order to ensure its survival and to effectively be in a position to move Caribbean people.
“Not to make the point that LIAT should not be efficient,” he said adding, “clearly we would have to minimise the level of subsidies because Caribbean countries are not in the best financial position and certainly not in the position to be profligate in ”their support for LIAT.”
Prime Minister Browne said that “we are being extremely hard on LIAT, we are not looking at the market structure, we are not looking at the other market idiosyncrasies associated with small states with very limited resources, the capital intensive nature of the airline industry and the fact that LIAT is providing a public good that is essential to the integration programme”.
He said “we travel to other countries, we use other airlines and when they are extremely late we don’t make a big issue about it but if LIAT is a few minutes late it becomes a crisis.
“There has to be some level of tolerance not for inferior performance but to understand that human error will always happen and that there’s likely to be delays from time to time,” Browne added.