A senior Antigua and Barbuda government official says billionaire Richard Branson, the owner of Virgin Atlantic, is interested in investing in the cash-strapped regional airline LIAT.
“He has proposed investing $7 million dollars he would wet lease several aircraft, jets, and they would very likely fly from Fort Lauderdale to maybe Jamaica, Haiti, down into Antigua, Barbados, maybe even as far south as Trinidad and Guyana, the Antigua and Barbuda government chief of staff, Lionel Max Hurst has said.
He told WINN FM radio here that the Gaston Browne administration prefers the Branson involvement in LIAT than what’s being floated by the Barbados government.
“The whole idea is to enlarge LIAT rather than collapse LIAT or making it a smaller entity. I believe the idea that Barbados had in mind was to sell two of the aircraft which they claim would be theirs and then use the cash component that results in starting up yet another carrier that would be based primarily in the southern part of the Caribbean. We reject any plan that would result in LIAT either being downsized or completely collapsed,” Hurst told the radio station.
Antigua and Barbuda is hoping that Branson’s interest will materialize into meaningful investment in LIAT.
“He certainly is not going to plough his resources into a smaller LIAT, that won’t be able to achieve working the Caribbean countries, won’t be able to achieve profitable status.
“There just isn’t sufficient number of passengers and other kinds of possibilities to make LIAT profitable within the Caribbean and many of the countries that now utilize LIAT services are showing some reticence in providing LIAT with the resources it needs from time to time. So we have to look at another to make LIAT work and Branson stepping in would be such a way.”
Hurst has also indicated that Antigua and Barbuda is also attempting to become LIAT’s biggest shareholder government.
Antigua and Barbuda currently holds 34 per cent of the shares and if it succeeds in convincing Bridgetown to part with its LIAT shares, would have 81 per cent.
The other shareholder governments are Dominica and St. Vincent and the Grenadines.
“The Prime Minister of Barbados has indicated that they are a burden to Barbados, Barbados as you know is undergoing an IMF (International Monetary Fund) restructuring adjustment programme and Antigua and Barbuda would much rather see a bigger LIAT rather than a smaller LIAT.
“Again there are many jobs here in Antigua and Barbuda connected to LIAT and we intend to ensure that those jobs are not lost. Many of the route rights that LIAT now possesses would be utilized more fully if Antigua and Barbuda gets its way,’ Hurst said.
Earlier this week, the shareholder governments agreed to give further consideration to a proposal by Prime Minister Browne regarding the future direction of the airline.
St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves told the Caribbean Media Corporation (CMC) that Antigua and Barbuda had made an oral presentation to the meeting and would present a written document over the next few days.
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Melchisedec
May 4, 2019 at 5:58 am
Purchasing and holding the majority shares in LIAT is not a sound economical idea.
The only reason the PM would be interested in doing this is to safe guard 700 jobs.
Holding majority shares means holding majority of liability.
Knowing the MO of the ABLP these shares will be turned over to a private investor and ANU retains a minority share.
LIAT will never be profitable. It requires constant subventions for the bottomless pit expenditure.
Sandals with their deep pockets thought owning an airline could greatly improve their product and they quickly gave it back to the government and where is air Jamaica today?
Liat’s solution: Stop treating LIAT like they treat UWI. All CARICOM countries should pay into LIAT an annual subvention. Accountability and centralising management and management functions.
You definitely have no idea of LIAT’s potential. I do not support your myopic and negativity views.
@Frank Southwell- i totally agree with you,could not have said it any better.. Myopic is an understatement though,i think its more like plain Ignorance..
Shareholders have certain rights, roles and duties to perform as set out in the Companies Act and the company’s Articles of Association. As shareholders of a limited company, they are protected from liabilities save for the amount of the shares they own but have not paid for.
Shareholder Liabilities. Due to the separate legal existence of a company’s shareholders are not responsible for the company’s obligations simply because they are a shareholder.
I hope the above has educated you as to the shareholders liability. They do not own any part of the liabilities of the company. A company is a legal entity by itself.
Sideline in text book I agree with you and is very aware of the different business models, 101 POB studies.
In reality the shareholders assume responsibility for the company’s liabilities and has been doing so from day one. LIAT is a hybrid business model.
The shareholders cannot be held legally responsible for liat’s liabilities, that is a given. But aren’t they taking care of day to day liabilities of LIAT?
You cannot have it both ways. Either it is true or not. And as you very well say, it is legally so. So drop all the other nonsense your are saying. The Board presents the shareholders with options to close down or find additional investment to keep the company’s doors open. That is all. Not to assume their liabilities.it’s called Equity Financing and not Debt Financing
Can we have a hostile take over of LIAT by the Antiguan Government. Start buying up the smaller shareholders. I mean Stanford offered them quite a lot of money to walk away and leave LIAT for him to run with the same intention of introducing Jets flying to the USA. But they rejected the offer. Stanford was then convinced by the then Lester Bird government to start his own airline claiming LIAT would be out of the air no less then three months. But we know that the other two large shareholders did everything to avoid that from happening. And governments have deeper pockets than one billionaire. And then they tricked Stanford to close down his airline and to form a Joint Venture. And we know what happened. They took his planes and never held their end of the deal. And the rest of the story is history
I wonder what table turning would now take place if the other countries had given the emergency funds needed..but then Branson came along and offered 7 million?.
Did you actually read my comment? What is myopic and negative about it?
FACT LIAT has never turned a profit.
FACT 700 jobs are in Antigua.
FACT If you purchase majority of shares in any company it comes with the company’s liability.
FACT It is not coincidental that the Virgin King has interest, at the same time the government is seeking to acquire BGI shares.
COMMON SENSE If the CARICOM countries give the company annual subventions, wouldn’t it serve the company well?
WI cricket team has a lot of potential also but they are at the bottom of of the barrel for how long……
See things the way they are your perception is not reality.
LIAT is important and necessary but it being profitable is unrealistic.
You have time to respond to he?
Please get educated about the separation of a company’s liabilities and its shareholders.
@ Sideline your perception is not reality. LIAT has a non binding hybrid business model.
LIAT is a LTD company however the shareholders are the ones who take care of the day to day liability of the company.
LIAT is not a normal healthy business.
Sideline you and Frankie should read Mr Pompey comment. He detailed the points which I made reference to earlier……
POTENTIAL AND PROFIT
Not a defender of fate, for according to ‘…Murphy’s Law,’ none can defend it.
As with many airlines, including ‘…Air Jamaica,’ they had ‘…Potential,’ but had also experienced ‘…profit-making problems.’
Business and financial experts making ‘…an Economic Presentation’ to Police Managers noted some of the chronic problems ‘…Air Jamaica’ had then faced.
These include;
(i) …Non-profitable routes;
(ii) …Fluctuating flight capacity;
(iii) …Delayed Flights arrival and/or departure;
(iv) …Cost for ground transport, meals and overnight accommodation of passengers;
(v) …High costs for operation, maintenance and Landing Fees;
(vi) …Replacement costs for theft of, and/or damage to passenger luggage;
(vii) …Heavy fines for, and seizure of equipment for the illegal conveyance of narcotics to the United
States;
(viii) …Over-staffing;and not least among its ‘…operational, maintenance and financial troubles,’
(ix) …Employee’s Absenteeism.’
These were all ‘…Costs-burdening’ to the then financially-troubled Airline [Jamaica: Twickenham Park: Senior Police Command Course; 1987].
LIAT Shareholders, Directors and Managers might wish to look back at the torrid experiences of ‘…Air Jamaica’ back then.
Not only to keep the name of the ‘…financially-starved airline as a company,’ but also to keep it skyward, they might just learn something and to do something radically different.
Whatever these two words mean, they are certainly not the same.
Many have the former, but have failed with miserability to materialized.
The latter has seen ‘…fluctuating fortunes.’
How long was Air Jamaica flying and how long is LIAT flying. Don’t you think LIAT has the experience and doesn’t need to really learn from any other airline but itself.
The race is still on?
Branson coming on board is the best outcome I can think of. Not only will he be bringing the desperately needed funds to keep LIAT in the air, he will also bring the knowledge of how to actually run an airplane, something that LIAT has lacked from the outset.
Government run businesses are rarely efficient or profitable and in the airline business, government run airlines making a loss is the norm
@ Paul the vigin king did not know how to run an airline when he started either.
He got the best in the business to do the heavy lifting for him.
The government need to do this also. EUA and AFRICA has alot of experience with this type of aircraft and multiple short stops.
Sorry but I can name many CEO’s that LIAT hired over the past decades that came with very high credentials. But none of them could take LIAT and make it a profitable airline. And all they shareholders need to realize is that the goal of LIAT is not to be profitable but to provide a service at ANY Cost. And the fact is they do not have to money to keep that up. The service needs to be paid for by someone. Or you must have many more profitable routes to subsidize the non-profitable ones. Or perhaps find another revenue stream. Who knows they can lease out their landing rights to some other Airline.
@ sideline
1. Parcel and cargo services
2. Alliance with larger aircrafts
3. Reduce daily flights. Capacity increase wear and tear decrease.
4. Partner with hotels all inclusive.
5. New routes like Cuba and veezuela.
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