Plans by Caribbean Airlines (CAL) to expand its operations in the Eastern Caribbean has evoked sharp criticisms from St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves, who said this latest move by the Trinidad-based airline would threaten the existence of LIAT.
Speaking to CMC news agency at the end of LIAT’s shareholder’s meeting, Gonsalves said CAL’s ability to use subsidized fuel will assist them to run LIAT out of business a scenario that would be in contravention of CARICOM’s trading agreement.
“If somebody wants to come into this region and take out LIAT from the air and replace it with a monopoly based outside of the shareholders of this sub-region, there is a problem. And bear this in mind, while we have to pay US$102 a barrel right now for aviation fuel, CAL they pay US$50 dollars because they are subsidised by the government of Trinidad and Tobago,” Gonsalves told the news agency.
“The Trinidadians call it a hedge; it is a not a hedge, it is a subsidy. Let’s call the animal by the name what it is. So you want to come into my space with subsidised fuel and take me out of the air? Well that is not permissible and at the end of that, you then decide what price you will charge and which services you will have?”
Gonsalves added: “The rules of CARICOM, the revised Treaty of Chaguaramas and the multilateral treaty which was signed way back in 1996 by the heads of government at the time…deal with the issue of fair competition,” he said, adding that the agreements also address issues related to subsidies.
The Vincentian prime minister said he is not against competition for LIAT, but the competition has to operate fairly based on regional standards and agreements.
Gonsalves told CMC he finds it “very strange” that officials from the Trinidad and Tobago government and CAL “could be talking about LIAT as though they own it, that they will come into the Eastern Caribbean and it is only a matter of time that they take over LIAT; [Allen] Stanford thought so too”.
Gonsalves is also disturbed by the fact that CAL has begun test runs without him being informed of such activity as the minister of civil aviation for St Vincent and the Grenadines as well as the prime minister with responsibility for air transportation matters within CARICOM’s quasi Cabinet, he told CMC.
“I did not sign on to the revised Treaty of Chaguaramas to be somebody’s colony, or somebody’s metropolitan centre. That’s not the bargain which we made. So I want to put down my marker very clear on this subject,” he said.
He added: “I don’t know where these men and women get these ideas from. They don’t own LIAT, they don’t own St Vincent and the Grenadines, Antigua & Barbuda and Barbados; since when they can talk like this?”