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CARICOM | LIAT to be replaced by six airlines serving the Region

Regional airline, LIAT (1974) Ltd to be liquidated and replaced by private entities. Regional airline, LIAT (1974) Ltd to be liquidated and replaced by private entities.
CARICOM,  July 4, 2020 - With the collapse of the ailing Regional airline, LIAT (1974) Ltd., despite herculean efforts by Antigua and Barbuda’s PM, Gaston Browne to save the carrier, six privately owned air carriers are being considered to take over LIAT’s travel routes, in wake of the carrier’s current financial challenge.

Ralph Gonsalves460Addressing the opening of the summit of CARICOM leaders, St. Vincent and the Grenadines Prime Minister, Dr. Ralph Gonsalves who is responsible regional transportation in the quasi-cabinet is confident that several airlines will be able to provide cheap and safe air travel.

“I believe that we are going to be able to provide, in a very short time, a sufficiency of regional transport to serve the sub-region, to serve ourselves safely, reliably, sustainably, and reasonably priced. I want to give that assurance to the people of the Caribbean Community,” said Gonsalves.

Prime Minister of Barbados and former chair of CARICOM, Mia Mottley said the airlines interested in filling the gap left by LIAT include the Trinidad and Tobago government-owned Caribbean Airlines; The Turks and Caicos-based Inter-Caribbean Airways; One Caribbean Ltd. in St. Vincent and the Grenadines; SVG Air; United States-based Silver Airways, and the France based Air Antilles.

“We are satisfied that these six airlines can more than fill the immediate gap, particularly given the reduced travel within COVID,” she said.

Mottley said the door remained opened to other private sector players who are interested in working on their own or with existing airlines because most Caribbean governments can no longer afford to spend money on keeping a regional airline afloat.

“Governments now have to use their funds to be able to deal with health expenditure, to be able to be able to deal with water, to be able to deal with other forms of transport , to be able to deal with our tourism sector as well as our vulnerable populations are all requiring us to hold their hands  because they have come to zero revenue,” she said.

The issue of regional air travel was discussed as St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves assumed chairmanship of the Caribbean Community (Caricom) from outgoing chair, Barbados Prime Minister Mia Mottley during a virtual handing over ceremony yesterday.

Mia Mottley 460Mottley explained that citizens within the region had expressed concerns over the absence of inter-regional transport as LIAT would now be liquidated.

Noting that it was not an easy decision Mottley added: “LIAT has been for us, a critical part of our history, it has allowed Caribbean people to move but there also is a time when those instruments that served us well in the past may not be the right instruments for us going forward.”

She explained that if the board of directors did not liquidate the insolvent airline they would then be guilty of fraudulent trading.

Mottley said the CARICOM stakeholders were however, satisfied that the six airlines could more than fill the immediate gap, given the reduced travel due to the COVID-19 measures implemented to contain the spread of the virus.

According to the Barbadian, PM, working together with private sector players needs to be done as governments have to now use their funds to deal with health, water and transportation expenditure as well as salvaging a vulnerable tourism industry.

Mottley added that the CARICOM heads of Government have agreed to assist the airline industry in the best ways they can.

Gonzales assured that air transport in lieu of LIAT’s exit would be soon implemented.

“I believe we are going to be able to provide, in a very short time, a sufficiency of regional transport to serve the sub-region––to serve ourselves safely, reliably, sustainably and reasonably priced,” Gonsalves said.

He said the challenge placed upon the Caribbean regarding regional air transportation is one which the region has to solve.

Gonsalves had said LIAT did not have significant assets to satisfy the liabilities it owes.

LIAT’s fleet consists of ten ATR aircraft—five ATR 42-600s and five ATR 72-600s—with LIAT only owning three of its aircraft.

One of the largest liabilities LIAT owes is a $29 million severance payment it contractually owes to its’ employees.

LIAT Ltd, previously known as Leeward Islands Air Transport or LIAT, is headquartered in Antigua.

  • Countries: CARICOM
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