St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves Wednesday publicly disagreed with his Grenadian counterpart Dr Keith Mitchell on the financial problems facing the regional airline, LIAT and again appealed to regional governments to invest in the Antigua-based company.
But 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 on Tuesday night, Mitchell, the incoming CARICOM Chairman, said that transportation remains the lifeblood of the regional integration process.
But 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, Dr. 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.