Prime Minister Gaston Browne has said that if reogranised, LIAT can make a profit in 2021.
The Prime Minister disclosed aspects of a plan that he intends to present to shareholder governments as an alternative to liquidation.
In a rare occurrence, parliament met on a Saturday to debate the Companies Amendment Bill 2020 which will create the option for the reogranisation of a company instead of liquidation.
While stating that the bill was not geared toward LIAT Browne stated that there are benefits to reorganising LIAT “in terms of maintaining all its routes and its ability to trade in the USVI and Puerto Rico.”
He told the Lower House that if LIAT’s expenditure is reduced by 15 percent “LIAT could turn a profit, without any subsidy, could run a profit about 11 million dollars a year.”
Browne said that profit could also be realised “even with a reduction of traffic of 50 percent and revenue by 50 percent.”
The Prime Minister said by reducing 2020 operations by 50 percent based on lower demand for travel, and cutting expenditure by 15 percent, the $11 million profit will be realised.
LIAT made a loss of 14 million in 2019. Browne said the airline has a deficit of $116 million which “can be easily resolved” by requiring government’s who LIAT owes airport taxes to wipe them off.
In addition to the tax wipe off Browne said LIAT’s staff will also be required to take a haircut, his term for a salary reduction. He said that option is better than liquidation because everybody could lose their jobs “and the governments are really under no legal obligation to pay them.”
The proposal is for staff to take a 50 percent reduction in salaries “and that 50 percent can be put back into the company in the form of equity.”
“The reorganisation will include employment cuts in other words realignment cuts, a name pay scale.”
LIAT’s rent will also be reduced with use of either the Old Airport Terminal or the Old Goddard Building at Coolidge “I am sure that will result in a million and a half or so in rental savings.”
According to Browne, reoganisation will mean LIAT will operate strictly on a commercial basis with payments being made for unprofitable routes. He said reorganisation will also present an opportunity to sit down with creditors.
Browne is urging his regional colleagues to meet to accept the reorganisation plan instead of killing LIAT. He indicated that a meeting planned for Monday has been postponed because one Prime Minister is unable to attend.
If accepted, an administrator will be appointed to reorganise LIAT.
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Projection of $11 million dollars in profit for LIAT in 2021.So tell me the Powerball Numbers for tonight,Gaston.
What a fool.
if they reorganize liat hope their ticket is cheap . hope we paid the least of us 520 dollars to travel to caribbean island. or else liat if they raise their ticket they will be sorry again for falling in bankrupt again
In a time of liquidation,all of a sudden LIAT can turn a profit with reorganisation
Where was this idea all the time
Wow come on. The cash cows bale out nk more free rides
The Prime Minister Gaston Browne has done detailed, and excellent, planning work to prove that LIAT 1974 Ltd can be restructured – reorganised – and become profitable.
But still, I don’t believe the Prime Minister of Barbados will buy into the restructuring plan. Because, she has already made up her mind, for her own reasons, to dump LIAT. Therefore. to make any progress, Prime Minister Browne will have to offer to buy Barbados shares in LIAT1974 Ltd. I believe that whatever Barbados decides, Prime Minister Gonsaves will support.
If the Majority Shareholders insist on liquidation, before any formal decision to liquidate can be made LIAT 1974 Ltd needs to have it’s final audit completed and the auditor’s opinion given.
In any such scenario, the Antigua and Barbuda Government may still have a few options open. One option may be to forcibly nationalise LIAT 1974 Ltd, and impound any of its assets on Antigua soul, including planes. Once nationalisation of the airline has been pursued, the Antigua and Barbuda Government will be able to also demand the hand over of LIAT 1974 Ltd assets located in cooperative foreign countries.
Clearly, obstruction of an Antigua and Barbuda purchase of LIAT 1974 Ltd shares owned by recalcitrant countries will lead to a downgrade of relations with those countries. Antigua and Barbuda.may even want to consider withdrawl from the Caribbean Single Market And Economy (CSME).
The minority shareholders can put an injunction in place and ask for the court to rule on this decision. No shareholder should ca forced to accept loss of their investment if they are willing and able to finance the company and make it viable once again. If majority shareholders can do this it would be tantamount to bullying.
Good luck, Mr. PM. I have confidence that under your leadership you will do right by LIAT, once unencumbered by the insular Windward Islands’ turncoat PM. and the chameleon of another small state who, not long ago considered itself an MDC (More Developed Country) as opposed to an LDC (Less Developed Country).
In your first term as PM you did the seemingly impossible – you rescued a major local bank from crooked politicians and their cronies. In this your second term you have not only to protect the health, welfare and jobs of a wretched, ungrateful and cynical ‘nationals’ but there is also LIAT – Leeward Islands Air Transport. What’s in a name? Everything. There would be no brouhaha were the airlines renamed Windward Islands Air Transport (WIAT) Ah Dat a bun Gonsalves, but he can WIAT pan Dat! As for the motley head hunter, recently forced into an IMF program, she no doubt has to suck up to her new exploiters at the IMF who no doubt are still smarting at the stinging ‘good riddance’ speech delivered by our PM after he managed to skillfully extricate this country from their greedy, racist, exploitative claws. She would no doubt be granted favourite-beggar status by the IMF if she could help them force Antigua back into an IMF program. So you see, their naked, filthy butts are exposed to the thinking Caribbean public. Don’t be surprised to see these turncoat politicians change their attitude and rhetoric with respect to Venezuela!! So, true and honest patriots of Antigua, don’t fool yourself. Don’t be misled by shameless politicians and deracinated inhabitants. Patriots, we have an obligation to stand on PRINCIPLE and SELF RESPECT in defence of our beloved country.
Gaston’s words hold little water.
Didn’t the Hon. Mathematician say US$40 mil.? I thought that’s what I heard during his presentation in Parliament on Saturday…
I wonder what the Hon. Robin 2019 assessment says…
Antigua Citizen. The very name causes me to shiver in disgust.
I hear you Jasmine Henry
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