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ANTIGUA | PM Browne hopes to hold talks on LIAT with Mottley and Gonsalves Monday

Featured Antigua and Barbuda Prime Minister Gaston Browne. Antigua and Barbuda Prime Minister Gaston Browne.
ST JOHN’S, Antigua – July 12, 2020 - Antigua and Barbuda Prime Minister Gaston Browne, in a desperate bid to save LIAT, is expected have a final meeting on Monday with Prime Ministers Mia Mottley of Barbados and Dr Ralph Gonsalves of St Vincent and the Grenadines, to discuss his proposals for reorganising the cash strapped regional airline.

Last week, Prime Minister Browne said he had sought a meeting with the two shareholders of the airline, in order to pitch his plan ahead of the next annual general meeting which is yet to be scheduled.

As part of his plans for a new LIAT 2020 the Antigua Prime Minister said he has so far raised EC$20 million towards the venture, while Bridgetown and Kingstown have indicated that there are six airlines waiting to take over airline’s role in intra-regional travel.

He said if the airline is reorganised liquidation may not be necessary. “I’m saying here if you can get the staff to get a 50 per cent haircut and you put that 50 per cent back into the company in the form of equity because we want to make sure that going forward they have full commitment to the company. The problems we’ve had with LIAT over the years is no real commitment coming from the staff.”

Browne says his government is willing to provide the airline with a building, rent-free, to be used as its headquarters. He also suggested that the airline suspend its service to all unprofitable routes.
 
“We should understand that LIAT is a significant contributor of revenue to our airports, the landing fees, the taxes. I mean, when I look at the Barbados yield, for example, they have almost 7,000 passengers a year from LIAT. At $50 head tax, that’s $35 million a year so if you have to put back $5 million a year into LIAT, come on that’s reasonable. We’re moving a lot of people opportunistically through Barbados so that they could get their head tax. If LIAT is no longer operating in that way you’re going to see a significant reduction in the head tax going to Barbados," he argued.

LIAT shareholders have proposed that severance payments be made based on collective agreements, but according to Browne, such an arrangement would be inequitable. Based on the fact that most of the staff are based in Antigua, he said his country could then be forced to cover 70 per cent of severance and other outstanding staff costs. This could amount to $70 million in liabilities.

In April, the airline, which is in debt to more than EC$100 million, announced the suspension of commercial flights until June 30 due to the coronavirus (COVID-19) pandemic that resulted in many Caribbean countries shutting down their borders.

LIAT flies to 21 destinations and operates an average of 112 daily flights within a complex network combining profitable and unprofitable routes.

Earlier this month, the major shareholder governments of the Antigua-based airline, announced plans to liquidate the company. However, St John’s says it does not support the idea put forward by the other shareholders, namely Barbados, St Vincent and the Grenadines and Dominica.

In a statement, Friday, the airline said during the suspension of its services it has “been working with a view to restart our operations as soon as possible.

“While the Board and Shareholders have considered numerous proposals to safeguard the survival of LIAT, the COVID-19 crisis has created unprecedented challenges. These challenges have led to options which include a proposal to liquidate the airline.

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  • Countries: Antigua_Barbuda