LIAT owes workers millions in severance

CMC: Hundreds of former LIAT employees are owed about EC$80 million (US$30 million) in severance payments but court-appointed administrator Cleveland Seaforth says they will not get it anytime in the near future.

He said Tuesday that the Antigua-based regional airline, which has so far terminated 500 employees, simply does not have the money.

“Somewhere, as we go forward in the process, the matter of severance is going to be addressed; I cannot tell you exactly when,” he said on an Observer Radio programme in Antigua.

“I am in discussions with prospective investors and some of them are prepared to address the matter of severance, but we are not at the stage yet where we can say when severance will be paid and the quantum of it.”

Seaforth, who was appointed administrator of LIAT by the Eastern Caribbean Supreme Court in July, acknowledged that the airline had no funds when he was brought in, “so we had to obtain funds [and] we got some funding from the government of Antigua and Barbuda”.

Among the challenges, he said, are that “we have had to be dealing with the creditors, some of them who have been quite understanding and some of them who have not been”.

“We have had to deal with maintaining the coverage for both facilities here in Antigua and also the planes. We got numerous complaints from the passengers and we have had to procure a number of services in the absence of cash,” Seaforth added.

LIAT was forced to suspend services in April after the COVID-19 pandemic prompted several countries to either impose travel bans or close their borders.

The company is currently being restructured to improve its viability and the sustainability following a decision by the Antigua and Barbuda government to reorganise the airline.

Last month, Prime Minister Gaston Browne said his administration was prepared to “collapse” the regional airline if it does not emerge as a “new and lean” entity as part of the reorganisation plans.

Browne said then that practically all the countries in the region are collaborating and that his government, along with that of Barbados, St Vincent and the Grenadines and Dominica – LIAT’s shareholder governments – had written to Seaforth agreeing to write off their debts.

“If I am not mistaken, we are talking close to EC$70 million (US$26 million) in debt that would be eliminated from the balance books of LIAT as a result of those countries agreeing to write off the amounts due to them,” said the Prime Minister of the twin-island nation.

Prior to its collapse, LIAT, which owes creditors an estimated EC$100 million (US$37 million), flew to 21 destinations, operating an average of 112 daily flights within a complex network, combining profitable and uneconomic routes.

On Sunday, the airline returned to the skies with a flight to Dominica.

But Seaforth said the current staff complement has not been paid for several months and the Antigua and Barbuda government has been the main source of funding so far.

“The government of Antigua and Barbuda has provided US$1 million, the government of Grenada has stepped in and they paid some outstanding salaries that were due to the employees in Grenada, but so far the main source of funds has been the government of Antigua.

“Now, as we plan to do a schedule for the next three months, the government of Dominica has reached out and they have indicated that they are prepared to pay the salaries of the workers in Dominica during this time,” the LIAT administrator explained.

A total of 103 workers are still employed by LIAT but Seaforth said that number could increase by as many as 30 with expanded operations.

He said that going forward, the Antigua and Barbuda government will have to decide who it will partner with to ensure the viability of the airline. He also hinted at the possibility of the Browne administration being a minority partner in the deal.

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