BRIDGETOWN (Barbados Today) — Barbados Prime Minister Mia Mottley insisted, on Tuesday, that LIAT, the regional airline jointly owned by Barbados and three other Caribbean governments, is “doomed” under its current ownership, declaring her fellow leaders are “not on the same page” on the future of the cash-strapped carrier.
She also told a town hall meeting at the University of the West Indies at Cave Hill that the island-hopping airline’s viability is not the sole responsibility of CARICOM, even as she declared that sustainable, reliable and affordable air travel is necessary if the regional bloc is to grow.
Mottley, who has lead responsibility for the Caribbean Single Market and Economy (CSME) in CARICOM’s quasi-cabinet, appeared as a panellist at a CARICOM Secretariat-sponsored town hall meeting – “CSME – What’s in it for me”.
In a series of frank assessments of the fate of the 63-year-old carrier, she maintained that if the success of LIAT was left in the hands of the shareholder governments alone the regional carrier was doomed.
Mottley said: “Now there are some discussions that have to take place with LIAT.
“LIAT is not a CARICOM issue; LIAT is the issue of three or four governments having to have shareholder discussions.
“Now if you expect the three or four shareholder governments alone to carry the burden then you will end up in trouble each time because it means that at some point they are going to make commercial decisions because there is not a bottomless pit to service it.
“LIAT 1974 Limited is a complex issue and it is complex because it has been losing money for how long.
“But the bottom line is that it does not need to be complex because what we have done is to place the burden of LIAT only on the shareholders without recognising that routes cannot be sustainable unless there are either financially profitable or economically desirable.”
The prime minister said it was still important for the shareholder governments to be united on the future of the airline, which despite a series of challenges in upgrading its fleet, control costs and manage a huge payroll, this year became one of the top on-time carriers in the region.
She hinted that the breakdown in negotiations between Barbados and Antigua and Barbuda on the sale of Barbados’ majority shares occurred because of their inability to come to an agreement.
The prime minister declared: “I believe we can solve the problem but it is going to require us coming together and agreeing, and in fairness we tried to, but all of the stakeholders were not necessarily on the same page earlier this year.
“I trust and pray that we can find the common ground for all of the stakeholders because while LIAT 1974 Limited may not be a viable proposition, reasonable, affordable, reliable air travel is the prerequisite for the growth of this region.”
Mottley reiterated the need for a minimum revenue guarantee policy to be implemented at LIAT, noting there was a similar policy at international carriers American Airlines and Virgin Atlantic Airways.
She again stressed that in its current format LIAT was simply not sustainable.
Mottley said: “We need to move to the point where we treat the LIAT planes and the inter-Caribbean planes as almost like buses from the perspective that we recognise that we need to be able to strip out the costs and to be able to have more regular travel, even in smaller planes.
“If they are financially profitable then there is no issue because the profit is after you have taken into account all of your payments, including the payments governments are now paying now for the planes.
“If it is economically desirable then we need to be able have a minimum revenue guarantee such that once the load factor of particular routes falls below whatever the agreed average is, governments who want to sustain those routes say ‘I will pay the difference between the two’ as we are currently doing with American Airlines and with Virgin Airways in many Caribbean countries.”
Again I say LIAT is not and should not be a for profit making venture. It’s a public transportation system that should and must be subsidized by not only those with ownership interest but by all the stops. Just cover the cost of operations and a fund a revenue stabilization fund.
I agree with PM mottly.Beacsue there is a leader of one of the stakeholders government who used there position for personal and political gain.A investigation needs to be done in respect of allegation that the individual have been soliciting sexy from Yong ladies in exchange for influence them getting a job with the airline and not just from the individual country but the Caribbean.And also influncein jobs for persons who supports him reginaly.So as MISS Mottly said that the stakeholders have different ideas on going forward that is true.And a lot of tax payers money have gone into LIAT for government to only be using it for there porsnal gain and not for tax payers.So l hope after an investigation if it prove to be true that tax payers will take action.Beacuse liat was used to that government advantage in that country last general election.And the other stakeholders should have naver allow that prime minister to do something like that with such an important asset that is important for reginal development.
Airlines around the world are constantly in trouble, and the markets go up and down, as expected. Shrewd management is needed and these shareholder governments are not capable of such thinking. Obviously the structure of Liat is a losing recipe. The even bigger elephant in the room is not even mentioned in this article:
LIAT TICKETS ARE TOO EXPENSIVE FOR THE VAST MAJORITY OF CARIBBEAN PEOPLES BECAUSE THESE GREEDY SHAREHOLDER GOVERNMENTS HAVE TOO MUCH TAX INCORPORATED INTO THE COST!!!
STRANGELY. MRS MOTTLEY NEGLECTED TO MENTION THIS FACT!!!
However the last paragraph of this article is also a vital fact that has to be realized by these greedy shareholder governments. Maybe these governments have to stop seeing Liat as a cash-cow for large amounts of revenue for thier profits and instead use Liat as a means to instead serve the people instead of serving the governments!
both comment above sounds right on target …..
I remember the days when a return ticket to Trinidad or St Lucia use to be no more than about US$75.
I also remember CARIB EXPRESS and CARIBBEAN STAR and RED JET – open gateways to regional integration and free movement of Caribbean nationals.
They killed Carib Express, dismantled Caribbean Star and fleeced Red Jet.
They left us with …L I A T – to slow the process down with higher prices and exhorbitant taxes to stifle leasurely trips from one shore to the other.
SvG is about 100 miles across from Barbados. Should a Bajan be paying at times over US$300 to come over and visit friends or to attend a seminar or for Carnival or a Wedding or Funeral or Christening?
Tanty Merle say no, Go back to de oval and bowl another ball!
You said it so correctly DUKE! “LIAT TICKETS ARE TOO EXPENSIVE FOR THE VAST MAJORITY OF CARIBBEAN PEOPLES”!
However, these individuals who are in the saddle of the company are not Business people at all but are rather Politicians doing what Politicians do best, sit and talk!
And even worst for us, one of their numbers are whom may one ask? None other than Ralph Gonsalves, who could not even run a booze party in a Beer factory as his most dismal record at business development has since shown!
Indeed, we the suffering public are so poorly served on all fronts. By incompetent Politicians playing at business and an Airline that does not know whether it is going or coming.
After more consideration, knowing that the article has information that does not “sit right” in my mind I believe I have figured out what bothers me:
PM Mottley is saying, (wanting us to believe) that the Shareholder Governments “alone” (financially) should not have to keep Liat afloat. This means the taxpayers should have to pay even more than they already do. If anyone follows the money that we all see, and puts the numbers on a tally sheet it is obvious that the Shareholder Governments do not pay ONE CENT to keeping Liat afloat, in fact, THE SHAREHOLDER GOVERNMENTS ARE THE EXACT ENTITY THAT IS SINKING LIAT!!! All any reader of this comment has to do is look at how much of your Liat ticket is tax…ALMOST 50%! The Shareholder Governments get this vast hoard of money! NOT LIAT! Need I say that the money is coming out of the pockets of anyone and everyone who flys Liat. A large percentage of people that fly Liat are government employees, flying at government (we the people’s) expense.
Anyone who reads my comment can put two plus two together and begin to see where the problem(s) are and figure out why Liat is one of the most expensive airlines on earth and nevertheless is in perpetual financial collapse. It is a tremendous cash cow for the shareholder governments, and now they want even more!
I am sorry but the Shareholder Governments owe us some answers before they think to institute yet another Caribbean tax to support a problem they are responsible for. The Shareholder Governments do not lose ANY money from Liat, they are in fact the recipients of the largest portion of the costs WE are paying not to keep Liat afloat but to steer more money to the Shareholder Governments!
They should tell us how much money they make from Liat evey year!