Liat on the brink

St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves.
St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves.

Liat’s fate remains up in the air as discussions between the regional airline’s shareholder governments and the pilot’s union have come to a stalemate.

After a marathon meeting on Wednesday at the Barbados Hilton to discuss options on how to restructure the struggling regional carrier, St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves, told Newsday yesterday most of the staff have agreed to take a six per cent cut in wages over three years, including a wage freeze, but the pilots remain the lone holdouts.

The pilots, he said, have insisted that the only way they will consider anything is if the existing management is dismissed and operational procedures discarded and revamped.

“Liat is a fundamental regional public good,” Gonsalves said. The goal right now is to figure out a way to save or restructure, but, he said, if the owners can’t get the necessary cuts from workers, “we will have to move to plan b, which is close and start afresh.”

Gonsalves said all governments served by Liat were asked to share the burden, as well as all employees, bankers, lessors and maintenance teams. Most stakeholders responded fairly well, he said, except the workers. “In 1974 all countries, including Jamaica even though the airline didn’t serve them, came together to create Liat. That’s what regionalism was,” Gonsalves said.

Liat is 94.7 per cent owned by the governments of Barbados (the biggest shareholder), followed by Antigua and Barbuda, St Vincent and the Grenadines and Dominica.

“We had agreed at level of shareholders that we needed US$5.4 million in immediate funds and US$7.5m in cuts, of which US$2.5 million will come from workers in contracts, salaries and allowances. And only one (non-shareholder) country, Grenada, (agreed to put up) emergency funding,” Gonsalves said.

He said he could not say how much capital had been raised so far, only that it has been contributed to the emergency fund. The airline also has “minimum revenue guarantees” from countries like TT who have routes serviced by Liat, where if loads are not full, the government will pay the difference to offset the cost to the airline, similar to arrangements with larger carriers flying into the region. The TT government, has however, maintained that it has no intention of contributing to the emergency fund but has no objection to revenue guarantees.

Asked how St Vincent could bear the burden given the strain it could put on the country’s economy, Gonsalves said Liat becoming inoperable was worse than trying to bail it out. “It’s vital for us. Liat does 52 flights from St Vincent and we don’t have a fast ferry.” He did acknowledge that other airlines service the island with less frequency, including TT’s national airline Caribbean Airlines Ltd, and up-and-coming privately owned airline, One Caribbean.

Responding to a question at the post-Cabinet media briefing yesterday, Communications Minister Stuart Young said he was unaware of any decision by the airline to cut the TT route as it was out of his purview so he had no specifics but added that in the coming days he expected the Ministers of Finance or Works and Transport to make a statement. Young also reiterated that the prohibition order on Boeing 737 Max 8 aircraft was still in effect in TT and the world over because of safety concerns. He noted that CAL had been advised to get legal advice on the status of its contract with Boeing regarding the lease of 12 new Max 8 aircraft to upgrade its jet fleet, but added that the airline still has 9 months to sort it out before the first delivery is expected.

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"Liat on the brink"

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