ST. GEORGE’S, Grenada (CMC) — St. Vincent and the Grenadines Prime Minister Ralph Gonsalves Wednesday publicly disagreed with his Grenadian counterpart, Keith Mitchell on the financial problems facing the regional airline, LIAT and again appealed to regional governments to invest in the Antigua-based company.
Gonsalves, who is also the chairman of the shareholder governments, told the Caribbean Media Corporation (CMC) that he was disappointed in Mitchell’s statement.
“I think Prime Minister Mitchell’s speech last night was unfortunate,” he said, adding “of course we disagree on LIAT, but to say that the decisions which are made in relation to LIAT at the board level are political, he just doesn’t get.”
Speaking during the ceremonial opening of the 38th Summit of Caribbean Community (CARICOM) leaders here Tuesday night, Mitchell, the incoming CARICOM chairman, said that transportation remains the lifeblood of the regional integration process.
He said that weak domestic and intra-regional air travel, added to low service competition and high travel costs, all culminate in the reality that Caribbean countries connect more easily to destinations outside of the region than to destinations within member states.
He said it would represent a significant installment to the “regional integration account” if regional leaders would collectively agree to reduce airline ticket taxes, as well as other fees which attach to the cost of intra-regional air travel.
“Further, I have long held the belief that political presence on the board of airlines, such as LIAT, is not helpful to its proper management and efficiency.
“LIAT’s sustainability would have benefited if it was run more as a private sector company. Governments could then subsidise flights to given destinations or routes that are in the best interest of their respective countries.”
LIAT is owned by the governments of Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines, and Mitchell told the ceremony “how could LIAT thrive when, for example, a few months ago, literally overnight, LIAT cancelled one of its most lucrative routes to and from Grenada, without any consultation with the citizens or leadership of Grenada?
“And it was all based on politics. Colleagues, we have to do better as a region,” he insisted.
Gonsalves told CMC that the LIAT board was headed by a distinguished Caribbean national, Jean Holder of Barbados asking “anybody thinks of Jean as being some kind of political person?”
He said another board member, Isaac Solomon, is a banker who heads RBTT in the sub-region, saying “this is a distinguished professional” and brushed aside the suggestions that they would be party to any political decision to undermine the airline.
“It is sophistry for my friend Keith to say that if it is owned by the private sector that he will put money in. What is the difference between the private sector and the public sector? We have asked for other governments to come aboard LIAT, it is one thing to say on the side-lines and criticize it, it is another to put your money where your mouth is”.
Gonsalves said that in 2001, LIAT put out a 40 million rights issue to get capital and only his government that put up EC$2.9 million, no private sector made any investment.
“At that time, a lot of them were dancing with (Allen) Stanford (the disgraced US billionaire who established a regional airline) and I held the position we have to invest in LIAT. I went to the parliament of my country and say we are investing in an airline for all practical purposes insolvent.
“But if LIAT did not exist we would have had to invent it,” he told CMC, adding “we have done tremendous reforms with LIAT”.
He said St. Vincent and the Grenadines receives 42 flights a week from LIAT, while Grenada enjoys at least 39 “and we put a lot of money in it.
“So, I don’t agree with my friend Keith in his critique of LIAT and I have to say he has put the issue in the public and I have to respond. He is my friend and I hope this matter is resolved.
“If you attack LIAT unjustifiably, I will stand up and defend LIAT. LIAT has a lot of flaws, a lot of limitations, but I would like to invite him while I am on Grenadian soil to put some money in LIAT or either become an equity partner, or if you want additional routes negotiate it with LIAT and say this is the market support for additional routes rather than this kind of unfounded critique of LIAT.
“He knows my position on this and he will not be surprised at my stance on this,” Gonsalves told CMC.
Invest in a perpetual failing company where the staff is unhappy, the customers are unhappy but only the government investors seem to be happy. What’s wrong with this picture?
One of the most expensive but inefficient airlines in the world. Government needs to get its’ greedy fingers out of it and give the airline fair treatment in the financial department.
Mitchell is of the opinion that there needs to be fair prices for everyone. Gonsalves believes the prices should be as high as possible in order for government to get as much money as possible one reason is so it can pass out goodies to the people at election time and keep the greedy in power.
Gonsalves said Chairman Jean Holder is not a political person. Gonsalves needs a dose of reality. Holder is not even the expert in tourism he claims, and certainly has learned NOTHING about aviation from being Chairman of LIAT. When Holder writes his books on tourism (he certainly spends no time on LIAT) the only people who get them are politicians, giving Holder accolade upon accolade for service to the Party and helping publicise his useless books. Nobody actually buys them.
The true solution for LIAT is NOT to sell it, but to COMMERCIALISE it. Shareholding is IRRELEVANT to making a profit – LIAT sets the fares, not the passengers. LIAT is a politically protected monopoly in the EC, yet it charges high fares and still loses money every year – so is it the passengers stealing parts of the airline?
Replace Holder with somebody who actually knows about airlines and can steer LIAT in the right direction. Right now LIAT is rudderless and its current Board is incapable of steering it forwards and upwards. Replace most of the Boards political appointees with regional people who ACTUALLY know about aviation and airlines. Give the new Board a clean start with capable people and broad and unspecific mandates to follow, with time-frames to achieve them.
Install a CEO who is a foreign turn-around manager with global experience, and give them free reign. There will be a short period of discomfort as CHANGES are made, then the taxpayers will be relieved of the annual (now totally unaccounted for) financial burden and we will have a well-managed airline to be proud of.
Replace executive management with people who have qualifications and can actually demonstrate their skills.
For 40 years the faces have changed but the incompetence, political interference and INSANITY carries on. The PMs say they want change, but they do not want to either change or to order change.
Gonsalves says Mitchell does not Get it. Gonsalves is the one who does not get it. If he REALLY wants LIAT to stop bleeding cash, then put in a proper Board and management and stop with the Communist Marxist nonsense that taxpayers MUST pay LIATs losses.
Get IT. Get REAL. Stop this 50-year-old political farce and set LIAT on a commercial path so that the regions taxpayers can be relieved of a massive burden.
If Mitchell pumps $30 million into LIAT, what happens next year? Does the hat get passed around again? Shareholding in LIAT under the current circumstance is a nightmare of continued losses.
CHANGE is the operative word. Grenada does NOT need to become a shareholder, St. Lucia does NOT need to become a shareholder, and ownership has NOTHING to do with whether they get service or not.
If serving Grenada costs more than serving St. Lucia, then fares to and from Grenada have to be raised. Yet LIAT management and PM Gonsalves are clearly mentally incapable of understanding this simple fact.
If the airline is put on a commercial footing with professional managers and an aviation-savvy Board then there will be no losses to harass Grenada, St. Kitts, Montserrat and others for. Am I getting into particle physics here?
Seriously, is this really Rocket Surgery? We now have people who are Prime Ministers of countries and on the Boards of airlines who are apparently mental dwarfs, yet somehow maintain the belief that they are all-knowing and all-seeing.
STOP THE NONSENSE. Pull the politics COMPLETELY out of LIAT and give us our reliable airline back.