BRIDGETOWN, Barbados, August 24, 2011 – LIAT’s three major shareholder Prime Ministers – The Honourable Freundel Stuart QC of Barbados; Dr. The Honourable Baldwin Spencer of Antigua and Barbuda; and Dr. The Honourable Ralph Gonsalves of St. Vincent and the Grenadines – met in Barbados on Tuesday with members of LIAT’s Board of Directors and Management to discuss the way forward for the regional carrier.Tuesday’s meeting was one of the regular quarterly meetings of the Company and its three major shareholders.
LIAT Chairman, Dr. Jean Holder presented the shareholders with a strategic overview of the carrier, highlighting LIAT’s economic importance to its shareholders and to the region.
He noted that for 2010 LIAT had moved almost 100,000 passengers to Antigua, almost 170,000 to Barbados and almost 95,000 to St. Vincent. The Chairman noted that LIAT’s taxes and other direct commercial payments from the airline for 2010 to its principal shareholders was nearly EC$7 million in Antigua and almost BDS$20 million in the case of Barbados. He said that while information was still being compiled, in St. Vincent and The Grenadines revenues from LIAT ticket taxes alone amounted to more than EC$1 million.
Chairman Holder pointed out that in all these countries these payments represented only a part of the economic contribution of the carrier and that from an aviation perspective, LIAT represented the main user of airport services and contributed to airport revenues in a number of direct and indirect ways.
He pointed out that LIAT was also a major employer at its shareholders’ airports and employed both staff and contract workers.
Meantime, LIAT’s Chief Executive Officer Brian Challenger and other senior Company executives presented the shareholders with a detailed report on operational matters including an update on the financial health of the Company and its industrial relations.
The shareholders noted the continuing financial difficulties facing the Company including continuing high oil prices and continuing weaknesses in the regional and international economy. An all embracing Recovery Plan developed by management and which targets both revenue and cost components of the business was endorsed by the shareholders.
The shareholder heads expressed their concerns at the present state of industrial relations at the Company and agreed on certain measures from the Chairman and management for promoting an improved industrial relations climate within the organisation. This included a proposed meeting with LIAT’s unions in September to discuss the strategic future of the Company and the role of union-management relations in advancing the interests of regional air transportation. A set of specific responses to the industrial dispute in Grenada were also agreed.
The shareholders reviewed the present competitive situation involving air transport in the region. It was noted LIAT had seen some reduction in its loads to a number of destinations particularly in its critical southern network. The company’s efforts to respond constructively to these challenges through a range of pricing and scheduling initiatives were noted.
In looking at the competition situation overall, the issue of fuel subsidies to airlines and the adverse competitive impact which this had on LIAT and other carriers was discussed and the possibility raised for having these matters resolved within the context of the CARICOM single market framework.
The LIAT shareholder Heads reiterated the importance of the Company’s re-fleeting efforts as a critical element of its programme to improve efficiency of its services and to enhance its competitive position in the marketplace. A programme of action is expected to be presented shortly to the Heads outlining the possible time-lines and scenarios for introduction of new aircraft into the Company’s fleet.
The shareholders reviewed and endorsed recommendations from the Company’s management for establishment of a Pension Fund for LIAT employees and noted the Company’s on-going dialogue with its unions towards this end.
The next quarterly meeting of the shareholders is expected to take place before the end of the year.
Is the number of passengers accurate for Antigua or does it represent the number of passengers that get off Liat, go through the “in transit” system and get right back on the same plane? I agree Liat serves a purpose in the Caribbean as a “bus” service. They do need to counsel their employees regarding customer service and communication with customers. People wouldn’t be so upset if Liat told them what was going on. It’s very aggravating to think when you board in SJU that you are going to your final destination, only to get to Antigua and be told you are spending the night. That makes people mad. I don’t think the Royal Antiguan could survive without Liat. I have made 5 trips this year to Dominica and on every trip I have had to over night on one end or the other at the Royal Antiguan, they know my name!
LIAT is so right…..our people don’t appreciate the job that the do…..they are not cheap or perfect but they go to alot of islands with less than a plan full or sometimes not even half. And they got the pay all of the high landing fees and govt taxes. So I agree with LIAT, they are made to look like the worse thing on earth….so I say if the route is not profitable DROP IT. Let us all go to our new friend RedJet
LIAT needs to hire a PR person to present improve its image. That of course would also require improved service to its customers.
I dont think people appreciate the role LIAT plays in moving people through the region. When every other inter-island carrier folds, LIAT has been there to pick up the slack.
If LIAT was not around a few things would happen.
(1) The privately run airline would have to charge market fares to stay alive – whatever that the amount is. I think they could also be more efficiently run. But Caribbean Star was privately run and they and many others went out of business.
(2) If there were two privately run carriers in the region, as soon as one went bust, the surviving carrier would immediately jack up rates to take advantage of the lack of competition. LIAT is not cheap, but I think a large portion of their fare is made up of taxes and other government fees.
(3) Imagine there were a couple of privately run companies. They would service the heck out of the more profitable routes at the expense of the less profitable. They may even choose not to service those routes. Imagine again the disruption it coulds cause if there one of the airlines went out of business and there was no other airline to pick up the slack.
LIAT is not perfectm but they are vital to regional air travel. Let’s pressure them to improve. We cannot afford not to have LIAT flying our skies.