COMMENTARY: CAL Alone or CAL and LIAT? Fair Competition or Fearsome Fighting

CAL Alone or CAL and LIAT? Fair competition or Fearsome Fighting

Last week, I read (with some delight) that the IMF is  signalling support for a resurgent LIAT.

That could  then signal possible interest by the World Bank and network of regional institutions, including the Caribbean Development Bank.

A few days later, my enthusiasm was dampened, when I read that Port of Spain, is  prepping for an  expanded CAL, to bridge the gap created by the decline of LIAT.

My mind went back to the bad old days when BWIA (CAL’s predecessor)  and LIAT,  battled over access to gates, ground equipment and more, at  airports across the Caribbean.

In those dreadful days, the passengers (especially) the LIAT clients) often got the “Sticky-end of the stick”.

Then came LIAT’s bitter battles with Alan Stanford’s  “crashed”  effort to operate a regional carrier.

Neither the retired BWIA brand nor the convicted Stanford could “clip LIAT’s
wings”.

It took a combination of failed management practices (including unsustainably high cock-pit costs)  and a “once in a hundred years pandemic, to ground LIAT.

Such was the brand-loyalty to the regional airline.

More recently, certain CARICOM governments,  gave sucker to upstart carriers wishing to operate regionally and side-stepping LIAT in the process.

Not surprisingly, the experiment is losing altitude and failing badly.

The power  of the internet and social media,   is exposing every slip and slide of the aspirational regional carriers, to the dismay and consternation of  their   governmental allies.

So, with its oil dollars, Trinidad and Tobago will forge ahead with an expanded CAL.

If reliable and trusted financing can be found, a revised LIAT will take to the skies.

I concede (reluctantly) that  multiple  reliable regional carriers,  is an very good thing for the travelling public.

Fear competition mitigates  the prospect of Caribbean travelers (including heads of governments)  being left stranded in unexpected places.

Whether or not regional governments join Antigua-Barbuda and private
capital, to launch a new LIAT, the check list of priorities must include:

1.. Air-tight and equitable  agreement between share-holder government or
governments (on one hand) and private investors, on the other.
Such  agreements will need to satisfy: Leasing companies, insurance
providers, Bankers,  national authorities,  bargaining agents   and
suppliers of goods and  services.

2.. Assurance that any private  investor(s)  will enjoy the confidence of:
CARICOM, British,  French, Dutch and US authorities.
A resurgent LIAT, will need landing rights to service airports and interline
with passengers embarking or disembarking in  destinations of interests to
those dominions.

3.. A new LIAT,  will need assurances from CARICOM  governments, that CAL
(or any other regional carriers)  will not receive privileges, benefits and
rights not readily available to LIAT.

4.. If the Governments of the OECS,  will  stand  together, on the principle
of equity for all CARICOM-based users of our open skies, the prospects of a
new LIAT  will be enhanced.

5.. Adopting a sound business plan,  a new LIAT must abandon the legacy
technologies, in use by traditional carriers and embrace  more efficient and
sustainable business  practices.

In that regard, Government interests in a new LIAT,  must abandon the idea
that the new carrier will re-employ all or even most of the former LIAT
employees.

Specialist call centers,   reservation apps and modern accounting programs
have taken many of those jobs.

Finally, it will be  deeply  disappointing, in the event investment in a
resurgent  LIAT is not readily  forth coming from with-in CARICOM.
There is a very strong case  to be made,  for the Government of Guyana,  to
consider making a kind of “wealth-fund” investment in the capitalization of
LIAT.

The regional Carrier,  is a natural complement,   to  Guyana’s  continuing
expansion and modernization,  of  the Ogle International Airport.
Further, Guyana’s expanding domestic aviation sector,  represents a good
“hand-in-glove fit with  a  new LIAT.

Ultimately, none should doubt that  the lack of meaningful  CARICOM
participation in a new LIAT, will dilute if not destroy the LIAT brand among
subregional and wider regional travelers.
Given the long-standing  North American and European interests  in the
region’s hospitality sector;
And noting the potential for interlining between LIAT and the
intercontinental airlines serving the region,
it is troubling that,  investment interests are not forth-coming from those
markets.

In the circumstances, investment  capital  from Africa (in Particular
Nigeria) may therefore, be a kind of last resort.
Though enlightened, we must tread carefully. The Nigerian aviation sector
might not be perceived to have a sufficiently enviable safety record.
Furthermore, the secular authorities in Nigeria,  are fighting an
insurgency against a stubborn militant Islamic  group,  operating under the
brand of Bokoharam.

Viewed through  such optics, a new LIAT, with major  investments from
Nigeria,   may  need to assure: Caribbean travelers and  the  tourism
markets from North America and Western Europe, that flying  a resurgent LIAT
will be safe.

Walk good… Let us work together to get  the  new  LIAT soaring again.
(For more analytical pieces, visit: arvelgrant.com or
[email protected] <mailto:[email protected]>
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