Latest update January 18th, 2025 4:20 AM
Cash-strapped LIAT faces closure- shareholder governments to meet in Barbados at month end
LIAT’s chairman, Ralph Gonsalves
After 57 years in the Caribbean, a regional airline is very much nearer to going belly-up.
The Chairman of LIAT, Dr. Ralph Gonsalves, has expressed fears that the closure of the regional island-hopping carrier is imminent.
That’s because, he says, most of the countries which use the carrier services are not responding favourably to the airline’s request for US$5.4 million to ensure its survival, according to a report in the wicnews.com website.
Countries, including the four major shareholders – Dominica, Antigua and Barbuda, Barbados, and St. Vincent and the Grenadines – along with Grenada, have agreed to contribute to the US$5.4 million.
Dominica, is being asked to contribute US$347,938 in light of its 25 weekly flights, St. Vincent and the Grenadines, with 52 departures per week, will contribute US$723,711 while Grenada, which has 35 LIAT departures per week, is being asked to contribute US$487,113.
The regionally-owned airline is facing closure because of a cash problem (WIC News photo)
Barbados, which has the 116 weekly departures, the highest by LIAT, is being asked to contribute US$1.614 million, while Antigua and Barbuda, which has 69 departures, will contribute US$960,310.
They were asked to make the contribution in March and the deadline was the 15th of that same month.
But the Vincentian leader said on a radio programme this weekend that so far, Grenada is the only government that acceded to LIAT’s request by pumping approximately $1 million into the airline company.
According to Dr. Gonsalves, in the wicnews report, due to the lack of financial input from the other shareholding countries, LIAT’s closure is imminent.
He said that LIAT has a complement of 10 aircraft – seven are leased and three are owned by the Barbados-based Caribbean Development Bank (CDB) due to monies borrowed and a decision will soon have to be made on the way forward.
He said the company will have to ask the CDB to sell those three aircraft and operate seven of them and then get other smaller airlines like One Caribbean to fly between Grenada and St. Lucia, rather than get LIAT to fly on one of the routes which is going to Trinidad which is not economical.
“… The governments have not been responding so the shareholders are reaching a critical point now and if you ask me, what is likely to happen … there will be a transitional restructuring leading to a closure of LIAT,” he said.
Dr. Gonsalves pointed out that a new airline would then have to be the next option for the region if LIAT is closed.
However, he said that there will be consequences in terms of job losses.
The second option, he indicated, was to give the airline to the private sector completely, while the third option was to close it down and start afresh.
Meanwhile, according to the Caribbean Media Corporation (CMC), the shareholder governments will meet in Barbados at month end.
“We can only pray that Ralph Gonsalves’ prediction does not come true and that LIAT will be saved. Now on the 30th of this month, the directors will first gather in the morning and the shareholders will gather in the afternoon in Barbados and it is our hope that when we come away on the 30th LIAT will still be the carrier of the region,” the Antigua and Barbuda government Chief of Staff, Lionel ‘Max’ Hurst, said.
Speaking on Observer Radio here yesterday, he said the Gaston Browne administration had also met its commitment to pay the funds requested by the Antigua-based airline to meet much needed emergency funding.
“Antigua and Barbuda did abide by its promise to provide LIAT with more than one million US dollars and we are very much aware that LIAT is not only a requirement that has to exist but any regional carrier that attempts to do what LIAT does will face the same challenges,” Hurst said.
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