St Lucia Says No Cash For LIAT Before Improvement

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St Lucia Prime Minister Allen Chastanet

The St. Lucia government Monday reiterated its position that unless there’s a fundamental change to the operating structure of the cash-strapped regional airline, LIAT, Castries would not be investing financially in the airline.

“If St. Lucia’s going to buy shares, it’s going to be buying shares into an entity that we know is free to make whatever commercial decisions must be made,” said Prime Minister Allen Chastanet.

“I don’t mind being a shareholder, going to my annual shareholder meeting, and if in fact the management is not doing a good job then you fire the management. I don’t believe governments themselves should be involved in the day-to-day operations of the airline,” he added.

(File Photo)

The major shareholders of the Antigua-based airline are the governments of Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines.

Last week, St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves said progress had been made regarding the future direction of the regional airline, following a more than four hour meeting in Barbados.

The Barbados meeting was held against the move by the shareholders to get Caribbean countries to contribute a total of US$5.4 million in emergency funding need to keep the airline in the sky. At the same time, 11 destinations had been given until March 15, to respond to the airline’s minimal revenue guarantee (MRG) proposals.

Under and MRG model, it is likely that a few flights may be cut if the government is not prepared to fund them with a guarantee, Gonsalves said, adding that theoretically, several countries have no quarrel with the MRG.

“If a country wants a particular flight and it is not viable financially for LIAT that country pays a guarantee for its operation, just like they do for the international carriers.”

The Grenada government noting that its economy would be damaged if the airline is allowed to end its operations, has agreed to make a financial contribution to keep the airline functioning.

“It is not in our interest to see LIAT go down and we have agreed that we will contribute to a five million US dollar overhead…but it is based on certain factors,” Prime Minister Dr. Keith Mitchell said last week.

Initially it had been reported that Grenada, which has 35 LIAT departures per week, would be asked to contribute US$487,113.

But Mitchell said the proposals presented to his administration by LIAT is “based on the analysis they have done (and) what Grenada’s contribution would be.”.

The St. Kitts-Nevis government says it has appointed a high-level advisory committee to thoroughly consider a number of proposals put forward by LIAT.

Chastanet, who has long been a critic of the operations of the airline, said that although he knows LIAT is facing difficult times, and has been so for a long time, St. Lucia’s position remains clear.

“We’ve not considered purchasing any shares,” Chastanet reiterated, adding that this is what appears to be in practice, and his government is not at this time interested in purchasing shares in LIAT.

Chastanet referenced a Caribbean Development Bank study last year that outlined three options for LIAT: shutdown the entity; privatize it, or restructure.

He remains sceptical of the restructuring route because it has been attempted many times and he said unless there is going to be fundamental change, it won’t produce different results.

Antigua and Barbuda Prime Minister Gaston Browne said that the Barbados-based CDB study concluded that the most expensive option to pursue is to allow LIAT to collapse “because we would have to form a new entity.

“That is just more expensive than having a restructuring of LIAT,” Browne said.

Prime Minister Chastanet said he believes that the time has come for competition to enter the market.

“I think LIAT has been given a free rein in this region for a long enough time, so we can dismiss the idea that its losses are blameable solely on competition. I think it’s time to reintroduce competition into the market,” he said.

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9 COMMENTS

  1. Is the same Politican that gave American Eagle million of tax payers money in the past? Where is American Eagle now. Another visionless politrican….

  2. Well, so much for Caricom and cooperation. If these matter cannot be ironed out in caucus then I see little hope for the regional body. LIAT need to take a hard look at those territories that it is serving currently that is unwilling to contribute to its upkeep. It simply cannot be left to the existing shareholder governments alone to rescue LIAT. St. Lucia like many other countries are paying huge subsidies to international carriers as a load guarantee. Poor LIAT!
    The existing shareholders alone cannot finance LIAT’s survival and unless the other governments can play their part, it actually spells doom for LIAT.
    Cari not coming at all!

  3. No money!!! Then have st lucia pay for each empty seat going to anf from st lucia. They quick to do that for american air carrier, they need to do the same for liat. These cannot continue to benefit greatly without carrying any burdens.

  4. Pouring good water into an old rusty bucket with a huge hole in it will get get you the cup of water you need to drink. Fix the hole or get a new bucket.

    • Maybe the four governments with shareholdings should just allow it to die. We Caribbean people are so idiotic. If LIAT dies, and you believe that a private entity would recreate it, is downright foolhardy. Jet Airways in India, with a population of over one billion, is practically bankrupt, with the government asking the national banks to rescue them.

      I honestly think that dunceness should be one of the diseases covered by Medical Benefits Scheme. It’s obviously contagious.

  5. This man is an IMPOSTER!! How the people of St. Lucia elected him is baffling. He is nothing but a modern day Uncle Tom. A puppet doing the biddings of his master. Just follow the puppet strings to see who really controls him.

  6. Privatize it and sink or swim. Governments need to stay the heck out of it. The current business model is doomed to repeated failure. Maybe Sunwing should consider purchasing it and running it like a business with tie ins to its other Caribbean destinations. They have airline experience and tourism expertise as well as deep pockets. Surely anything would be an improvement.

  7. Well said/put Mr. PM of St. Lucia………how many times are they going to restructure the failed air line……if LIAT dies there will be other airlines that will fill the void. If LIAT is to continue then hire a new CEO on a turn around performance basis, give that person the reigns to hire and fire as deemed necessary to achieve the goal.

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