MIAMI — A big storm is presently in the Caribbean, and it may disrupt air travel in the region. We are not talking about a hurricane, but the struggling condition of Leeward Islands Air Transport, (LIAT), a situation that it is even threatening to taint the relationships among its regional shareholders.
The storm reached new levels this week when a set of documents leaked to the local media detailed the plans of Barbados in divesting its 51 per cent share holding in the troubled inter-island carrier, in exchange of five of the company’s ATRs.
These aircraft would be used to start up a new local airline, code-named “Newco,” with its own Air Operators Certificate (AOC) and Route Licensing Authorization.
The dossier also details the strategy to acquire LIAT aircraft, either through a decision of the shareholders or the reassignment of the ownership through the Caribbean Development Bank (CBD), which funded the purchase of the aircraft in early 2013.
The plans also state that this NewCo would replace several of the routes operated by LIAT, and add further new intra-regional routes not currently served by the airline.
The forming storm has the potential to sour relations within the Caribbean Community block. Early this week, Antigua’s Prime Minister Gaston Browne has vehemently described the plans as “treason,” further blaming Bridgetown to seek “the collapse of LIAT,” a move that he considers “contrary to the spirit of Caribbean integration.”
Last February, the shareholders of the troubled airline agreed to establish the airline’s flight base in Barbados, besides cutting costs by dismissing 180 employees as a means to attenuate financial losses. Nevertheless, Browne protested these measures and asked to put the plans on hold, alleging adverse social and economic consequences for Antigua.
Instead, the Prime Minister proposed to abolish regional travel tax—which allegedly has spiked LIAT’s fares—and to waive the airline’s landing fees. However, shareholders attitude to these proposals has been lukewarm.
Meanwhile, LIAT’s labor situation is dire. The Leeward Islands Pilots Association (LIALPA) has suggested the onset of industrial actions shortly before Easter period, a strategy that according to the airline “exploit the fears of the traveling public.”
Ahead to this, Chief Executive David Evans stated, “Unless we can reach a common understanding of LIAT’s current circumstances, LIAT’s future looks bleak. We will do everything we can to minimize industrial action over the Easter period, for the sake of the traveling public.”
The CEO also admitted, “the resulting financial crunch would mean that salary payments would be further delayed, and the airline would be unable to meet the demands of its creditors. Such a situation would put LIAT in a position of no return, leading to a shutdown of the airline.”
With a fleet of ATR series -600 family aircraft, LIAT serves a regional network of 17 destinations in Anguilla, Antigua, Barbados, Dominica, Grenada, Guadeloupe, Guyana, Martinique, Puerto Rico, and St. Croix, St. Kitts, St. Lucia, St. Maarten, St. Thomas, St. Vincent, Tortola and Trinidad.