By the end of this month, Grenada is expected to make a cash contribution to LIAT to ensure its continued operation.
During the Caribbean Community’s (CARICOM’s) 30th inter-sessional summit held in Saint Kitts last week, a report revealed that LIAT is in a dire financial state. Therefore, CARICOM’s member states committed to assist the regional airline in the short term. Following the meeting, Prime Minister of Trinidad and Tobago, Hon Keith Rowley announced that “within a matter of a fortnight an injection of a minimum of five million US dollars is needed in order to keep [LIAT] flying.”
Addressing this issue during Tuesday’s post Cabinet briefing, Minister of CARICOM Affairs Oliver Joseph noted that all CARICOM countries are expected to make a financial contribution to LIAT.
The value of Grenada’s contribution is yet to be determined Minister Joseph said, “The amount of money that we will contribute will be based on the information submitted to us by LIAT’s Board, which we hope to receive very shortly, so that by the end of the month, we can make a cash contribution.”
In addition to the cash payment this month, Government is also willing to pay LIAT additional funds based on load factor. Explaining this concept, Minister Joseph said, “If for example LIAT is operating a flight between Trinidad and Grenada that is unprofitable, Government will pay to ensure that the airline breaks even on that particular route.”
The Minister of CARICOM Affairs acknowledged that LIAT needs to look at changing the way it operates “because if you been operating since 1974 and every year you have to come to government for money you have to look at the way you operate.”
Minister Joseph said Grenada decided to put money but to also monitor LIAT’s operations thereafter, adding that the restructuring plans will be submitted to Heads of Government for their satisfaction.
He said, “For Grenada, we have always maintained that we would like to see LIAT continue to serve the people of the region, but in order for us to contribute state resources to LIAT, the airline must be restructured and operated in a manner that ensures sustainability.”
Hon Joseph in calling for ‘no political interference’. “We think part of the problem in the past may have been that you have Government Ministers on the Board. We do not want politicians because politicians make political decisions. Let us have a board of business men who are accustomed to operating and running businesses, to run LIAT and report to the Heads of Government on a yearly basis.”
On March 01, Rowley told reporters in his country, “Currently, part of LIAT’s problems is that LIAT is flying uneconomic routes with loads that are heavily subsidised. If the airline is to remain flying to countries that have routes like that, the shareholders are saying that such countries will have to guarantee a minimum revenue stream to the airline or the airline would cease to fly those routes.”
Nevertheless, Chief Executive Officer Julie Reifer-Jones assured that LIAT will continue to fly across the region, despite its current financial difficulties.
Acknowledging the airline’s challenging financial situation, Reifer-Jones said LIAT has managed to continue its operations throughout the region with support from its main shareholders: The Governments of Barbados, Antigua & Barbuda, Saint Vincent & the Grenadines and Dominica.
She noted that the airline has also been operating to destinations where there has been no support from governments and authorities to ensure that critical connectivity is maintained.
Discussions with regional Governments are underway and are intended to put in place new arrangements to provide a basis for sharing the burden amongst all the countries currently benefitting from LIAT’s services.
LIAT currently operates 491 flights weekly across its network of 15 destinations.