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A LIAT ATR-72 aircraft.
A LIAT ATR-72 aircraft.

Antigua and Barbuda has made a proposal in an effort to allow financially-troubled regional carrier LIAT to keep all of its 10 aircraft.

Chair of LIAT shareholder governments, Prime Minister of St. Vincent and the Grenadines said on Sunday that an extraordinary meeting of all LIAT shareholders was held last week in St. John’s to discuss the 2017 audited accounts, the draft account for 2018 and to get a report from the airline’s chief executive as to how the restructuring is coming and what are the next steps.

Gonsalves said that during the course of the discussion of the next steps, Prime Minister of Antigua and Barbuda, Gaston Browne, presented an oral proposal to help LIAT keep the three ART turboprops that the shareholder governments had suggested that the Caribbean Development Bank sell to realise some US$12 million in revenue.

“… and because Barbados has 49.5 per cent of the shares of LIAT, its indebtedness at the bank would be reduced by approximately close to US$18 million,” Gonsalves said on WE FM.

In addition to Antigua and SVG, the other major shareholder governments of LIAT are Barbados and Dominica.

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Grenada recently invested in the airline and St. Kitts and Nevis has announced its intention to do so.

Gonsalves, who has been chair of LIAT shareholders for the past 18 years, said that one of the problems that LIAT is having with resources is that Barbados, the largest single shareholder, is under an International Monetary Fund programme and does not have much fiscal space.

He further said that Antigua is proposing to buy some of Barbados’ shares and is encouraging Dominica, SVG, and even St. Kitts to do likewise “and correspondingly to take portions of the debt at the CBD, which had been incurred with the re-fleeting a few years ago”.

LIAT’s shareholder governments borrowed US$100 million to finance the re-fleeting, which saw the airline replacing its DASH-8 37-and 50-seater planes with 50- and 70-seater ATR aircraft.

He said that St. John’s promised to submit its core proposal within a week, and shareholders expect to receive it by Wednesday.

“But there is a promising development that we may be able to keep the 10 aircraft. There are some other suggestions that have been put forward; some came out of the report from the CDB, the technical report, which had been financed by the CDB, but basically we are to keep the existing fleet as we have it.”

He said that one idea was to have a slimmed-down fleet and have some other smaller airline, code share with LIAT.

“So, that’s a work in progress and with the Government of Antigua and Barbuda willing to take up a little bit more slack makes the situation the day after the meeting more promising than the day before; but we have to see the details and the devil is always in the details.”

Gonsalves said an interesting thing happened after he made the comment to the media in Grenada that there would be a slimmed-down LIAT in “the transitionary period” and the airline might close altogether. 

“It is amazing the response that ‘No, no, no. It can’t happen.’ All of a sudden, people from governors of central banks to ordinary people and business people are saying, ‘No, no, no. LIAT is absolutely necessary. Otherwise, all the public comments were are getting by the naysayers, close LIAT. Something would replace it. … All of a sudden, they are saying, “Please, please. Keep it in the sky because it is so important,” he said.

4 replies on “Antigua makes proposal to help LIAT keep its planes”

  1. Vincy America says:

    Get rid of the unprofitable route and rum it like a business. If the St Lucia based airline is ready to pick up the slack so do away with the unprofitable St Lucia route and let their government find a solution.

  2. Jolly Green says:

    The actual LIAT share of the ticket is small, most of the ticket is various taxes imposed by the government owners of airports where LIAT lands and takes off, departure, arrival, security and a host of other taxes.

    Average Caribbean taxes and fees are approximately 80% of the base airfare charges, thus comprising over 40% of total ticket cost. High airport charges and taxes for outbound traffic represent a large proportion of ticket prices with US$48 being the average charge levied on a departing passenger.

    So whatever the governments give LIAT it is far less than LIAT has given them.

    LIAT on average get about $50 per ticket.

    Sales Tax
    Passenger Departure Fee
    Airport Development Tax
    Airport Authority Taxes
    Airport Passenger Taxes, departure and arrival taxes and fees.
    Landing Fees
    Takeoff Fees
    Security Fees
    Customs fee
    Immigration fee
    All included in the price of a ticket.

    Imposing heavy fees and taxes on aviation and air travel negatively affects levels of tourism, business travel, and inter-Island travel—the very things required for a vibrant Caribbean economy.

    The taxes and fees have killed the inter-island travel, where islanders travel to visit family and friends, or just go shopping. Twenty years ago such travel was common, gradually over the years this type of airline client has almost disappeared. Because of the ticket cost, now inflated with greedy taxes, has all but killed inter-island travel.

    LIAT has seen its client base shrink, whilst overheads increase almost by the minute.

    Taxing the international airlines and their passengers is one thing, but taxing to the very hilt airlines such as LIAT is most certainly highly destructive. Local and regional air travel is the lifeline of the Caribbean, the very blood that needs regular transfusions of money by government because they unfairly took it from them in the first place.

  3. Jolly Green says:

    Further more the 60 people at Argyle whose farm land was taken for the airport still have not been paid.

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