A LIAT aircraft. (Photo: Maxime C-M)

A senior opposition lawmaker in St. Vincent and the Grenadines says that without regional air carrier LIAT, the country and the region would face graver economic difficulties.

St. Clair Leacock, Member of Parliament for Central Kingstown, said Tuesday night that the Caribbean region cannot function as an economic unit if it doesn’t have an efficient transport mechanism.

Speaking on NICE Radio, Leacock, who is a vice-president of the main opposition New Democratic Party, said he wanted to throw out his ideas for consideration and was not afraid to be wrong.

He said older persons would remember the years of the Federal Queen and the Federal Palm, two boats that ferried people across the region.

“And many would say it is one of the things that helped at that time to bring the Caribbean together,” Leacock said, adding that for years, the region has had LIAT, “with lots and lots of trouble.

“And it has failed and everybody wants to drop it like a hop potato now. But I have news for the governments of the region, in particular the government of St. Vincent and the Grenadines. We simply don’t have time like Dominica and others to stand idly by and wait for a solution to come to hand. Because our economies would be crippled, starting with the tourism sector.

“If we do not resolve the LIAT problem, the Argyle Airport — which I have always supported as a project, controversial as it may be — will be a white elephant. Period,” Leacock said of the airport, which began operating in 2017, after seven years of construction.

‘The dance will not be able to pay for the light and thousands of people will suffer. Big money, small money,” he said.

Even after the opening of AIA, LIAT continued to be the main air carrier serving SVG, notwithstanding some direct flights to the United States and Canada.

On Saturday, Prime Minister of Antigua and Barbuda announced that LIAT’s shareholder governments, namely his country as well as SVG, Barbados, and Dominica had decided to liquidate the cash strapped airline.

Prime Minister of SVG Ralph Gonsalves, who is chair of LIAT shareholder governments, said on radio on Sunday that the COVID-19 pandemic — which has grounded the airline since March — had exacerbated the airline’s financial challenges.

Gonsalves said that LIAT had no money, even as its debts included some EC$90 million to workers in severance and vacation pay.

The prime minister said that Kingstown was shifting its focus to local carrier SVG Air and One Caribbean. 

Vice-President of the New Democratic Party and Member of Parliament for Central Kingstown, St. Clair Leacock. (iWN file photo)

Leacock also said that without regional airlift, local hoteliers would suffer and investment in the hotel sector would be “in trouble”.

“Even now, the projections that are on-stream for the hotels, in Mt Wynne, Peters Hope, Diamonds, Calliaqua-Villa are running into hundreds of millions of dollars, NIS monies which have been spent, $90 million, all those projections will come to naught if the airline does not get itself together in quick time.”

The government is proposing to build hotels at Mt Wynne and Diamond and there are other private sector hotel projects taking place elsewhere in St. Vincent.

Leacock said it is easy to say that LIAT has failed, adding that while the evidence points to  that, the airline is “not an isolated case of failure in the Caribbean.

“Which Caribbean economy has succeeded? All of the Caribbean economies, even oil-rich Trinidad and Tobago, which is richer than all of us put together 10 times, all of us, our economies are alive because governments have a special privilege to live in debt and live in debt in perpetuity. And when the debt is insurmountable, people get rid of them, another government takes over the debt and life continues.

“But all the governments, for the main part, they are bankrupt — no lesser than LIAT is bankrupt in St. Vincent.”

He said that in the main part, where there have been success stories in Caribbean economies, those companies have been monopolies, including in electricity generation, water supply, port authority, import substitution companies, and manufacturers of beer, flour, etc.

“But where we have had to survive in a competitive environment, we have not done well,” he said, adding that the radio programme would not allow for expansion on the reasons.

Leacock said that no international airline is going to attempt to buy out LIAT.

The “most enterprising” Virgin, out of the United Kingdom ran into trouble and has filed for bankruptcy in some parts of the world, notwithstanding the fact that the company was planning to fly people to the moon, Leacock said.

“British Airways — debt up to their neck; Caribbean Airlines — debt up to its neck. The three biggest airlines in the United States of America — United, American and Delta — all looking for bailout from the federal government.

“If the federal government has to bail them out, you think they could bail us out? We will have to stand on our own feet.”

He said there is no private sector company in SVG that would take the risk or has the capital to buy out or bail out LIAT.

“And you will have to look long and hard throughout the rest of the OECS to find that private sector company to do that.”

Leacock said there are a capital challenge and a capital problem in getting LIAT in the sky.

“If LIAT folds, not only that [but] Argyle goes,” Leacock said.

“You think the government could operate its business in St. Vincent and the Grenadines if the passenger vans don’t run?

“…You think the private sector in St. Vincent would run if the passenger vans don’t run to bring people to open the store and run them?

“… Well, if you expand that principle, you will see that the transport system is like a main artery not just in a domestic economy but to regional economies and we will have therefore to bring regional solutions.

“Whether we like it or not, the governments will have to and bound to and compel to get back into the solutions of air transport problems in the region and eat humble pie,” Leacock said.   

11 replies on “More economic hardship ahead without LIAT — Leacock”

  1. C. ben-David says:

    Utter nonsense.

    1. Relatively few of our international tourists come from other Caribbean countries serviced by LIAT.

    2. A lot of small intra-regional airlines will soon fill some of the void left by LIAT.

    3. Yes, most of our extra-Caribbean tourists and other visitors arrived her via LIAT. With LIAT gone, they will now arrive more cheaply and in greater numbers directly from overseas on the daily international flights that LIAT’s happy demise will soon produce.

  2. Though “the radio programme would not allow for expansion on the reasons” for Caribbean business failures, truth be tell, it is too much taxation and incompetence on the part of Caribbean governments, particularly ours here in SVG, who like Venezuela are given to follow the ideology of Karl Marks.

    This flying “cash cow” LIAT is dead because of an incompetent business model and the tax burden that it had to carry. https://www.youtube.com/watch?v=AEUUjoVjdM0

  3. C. ben-David says:

    Hopefully, none of these hotels will ever be built because their eventual fate would be the same as Buccament Bay resort.

  4. Bill Johnney says:

    So Mr. Leacock let’s not labor on the problem, if we do we will never get anywhere. Let us know what will be you and your NDP solution. For too often now we hear all about the problems with no amicable solution. What are you and the NDP plans

  5. So sad but it’s the awful truth AIA cannot be the same without LIAT but st Lucia small Airport As Well but the people of SVG have nothing to fear the PM have it covered Right ??. (ONE CARIBBEAN ) hear they have $99 us dollars flights going around!

  6. Finally I hear someone saying what I have been SCREAMING all these years! Mr. Leacock is correct: You cannot run anything on perpetual debt. The Shareholder Governments have made sure that they extracted MILLIONS in taxes from the LIAT enterprise. The government-LIAT relationship was set-up to run like the government-Private Sector relationship in SVG (we can guess why that is). THE VAST AMOUNT OF WOULD-BE PROFITS ARE TAKEN BY GOVERNMENT and the business is left to struggle with crumbs based on DEBT!

    I suggest our Prime Minister adopt a new economic philosophy:

    Instead: CRAFT POLICY THAT MAKES PROSPERITY INEVITABLE AND POVERTY IMPOSSIBLE!

    At the moment we have the opposite and it guarantees business will struggle. The high taxes and duties guarantee high prices where NO ONE wants to buy our over-prices products, (so they never get created in the first place) and most that do try will collapse; but government ALWAYS MAKES A PROFIT as they watch business die under crippling taxes and the highest duties on earth.
    We all have to be shocked that LIAT…THE MOST EXPENSIVE COSTING AIRLINE ON EARTH, (no movies, no meals, just an expensive magazine) went bankrupt. Half the cost of the ticket was taxes. Consider this:

    MAKE A LIST OF HOW MANY PEOPLE THE LIAT ENTERPRISE HAD THAT MEET at big tables IN ROOMS WEARING WHITE SHIRTS AND TIES, KNOW VIRTUALLY NOTHING ABOUT RUNNING AN AIRLINE, MAKE FEW IMPORTANT DECISIONS BUT GET BIG SALARIES! You will know a main reason why it is called the “cash-strapped airline”.
    How LIAT was structured guarantees it would not make it, regardless of who manages it. Anyone with two working brain cells could see that from a mile away. It is as easy as seeing why SVG will NEVER be a profitable nation. In the long-term the SVG government is shooting itself in the foot by guaranteeing honest business cannot be successful and expand by taking the lion’s share of all the fruits of our labor. Duties have to be reduced by 50-70% and Corporate Income Tax has to be reduced to at least 21% or lower. OTHERWISE SVG WILL NEVER BE COMPETITIVE!!!
    As the expression has warned:
    “When you live beyond your means (debt) you are destined to live beneath your means”.

    Not only LIAT, but SVG is now being forced into restructuring or fail. We may soon be forced to live within our “new” means. It may be rougher than we think!

    1. Bad B, you have got a number of choices. Insist Gonsalves pays you personally, or make a claim against your credit card company, or join a group and sue the directors and defacto directors.

      The shareholder governments have been directing LIATS board of directors for years, the directors with the full knowledge of the company being insolvent have been trading the company whilst insolvent. Therefore, the directors and certain politicians from shareholder government who have proven to be, and acted as defacto directors, are responsible for the debts due to knowingly trading the company and in doing so incurring further debts. So, unless the shareholder governments announce they are paying all debts in full the directors including defacto directors must be held liable and responsible for paying all debts in full.

      Creditors find yourself a good law firm to represent you. A company can be placed into liquidation, and a liquidator appointed by court order, or a resolution by you the creditors at a watershed meeting. Liquidation takes effect immediately.

      Unless you act with all speed to get a competent lawyer you will be the losers and expect to be shafted to one degree or another by the shareholders. Inevitably the shareholder leaders are all lawyers and will try and not to pay you what you deserve, which is everything you are owed, do not settle for less. Do not settle for less because under the circumstance’s they are liable for your debts and you do not need to settle for less.

  7. It’s so unusual to hear everyone now behind keeping LIAT in the Sky, for the past years everyone wanted LIAT to be gone, all of a sudden it’s the AIA saviour, are you all listening to yourself. AIA is not ET Joshua, AIA can accommodate any range of aircraft and they already have 3 international carriers, which flew in on a regular basis. There are also locally owned carriers, which operates out of the AIA, so here’s an opportunity for our locally owned carriers such as One Caribbean and SVG Air to operates those routes, which Liat used to operates.
    COVID 19 is here to stay, but there will be a vaccine in the near future, the planet earth go through a phase of an epidemic or a pandemic over certain amount of years and it always bounces back. Life will go’s on after post COVID 19, economies will revive and there will be room for investment.
    As an MP Mr Leacock should have been offering solutions not a dooms day scenario.

  8. Sen. Leacock don’t cry over LIAT. Seems like you may have missed the point. The problem is not LIAT per say as an entity. It is the failed government policies regarding air travel including;
    1. Lack of open skies policy by the government of SVG in particular. 2. Heavy taxes on the travelling people across the region. The airline became a cash cow for regional governments whlie LIAT raked in losses to be paid by the national treasuries. 3. The top heavy bureaucracy in some of the states. The space could be filled by SEBOURN, WINAIR, CAL and AIRANTILLES operating in the nothern Caribbean which operate similar equipment to that of LIAT. If LIAT retuns in what ever form it must be allowed to compete with all other airlines.

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