What does Kenny know one year on?

Thousands of LIAT passengers across the Caribbean experienced major delays and cancellations this past summer. Do loan guarantees and handouts to LIAT give them any assurance that things will get better?

Thousands of LIAT passengers across the Caribbean experienced major delays and cancellations this past summer. Do loan guarantees and handouts to LIAT give them any assurance that things will get better?

In 2012 Dr. Ralph Gonsalves, chairman of the group of principal shareholders in LIAT – the governments of Antigua and Barbuda, Barbados and St. Vincent and the Grenadines – announced that he was confident Dominica and Saint Lucia would buy into the airline’s redevelopment plan. Gonsalves had reportedly made a special appeal to his Saint Lucian comrade, Prime Minister Kenny Anthony, to fast track a decision to increase the island’s investment in LIAT. The government of Saint Lucia is a minority shareholder in LIAT to the tune of EC$6 million.

Prior to Gonsalves jostling, Anthony had met with LIAT’s Board of Directors, Chairman Jean Holder and then CEO Captain Ian Brunton. At the time, Anthony was “circumspect about investment in the financially strapped airline.” He also expressed concern that the new aircraft LIAT was proposing to purchase as part of its fleet expansion was “a tall order for the carrier, which has accumulated millions of dollars in debt.”

However, the prime minister went on to explain that Saint Lucia should be more responsive to the plight of LIAT given that the island provides minimum guarantees for aircraft from other countries bringing tourists into the island. “It seems unfair that we are subsidising other aircraft and we do not extend assistance to LIAT,” Anthony said at the time.

But as the airline sought a response from Saint Lucia in November of 2012, Anthony revealed that he was in no position to tell LIAT whether the Saint Lucian government would accede to their request for help. The government and a team of technocrats were expected to review LIAT’s proposals with a view to offering a report at a later date.

So what has happened since then? Well for one thing, none of the “findings” of the government team and its technocrats reviewing LIAT’s proposal has been made public.

What we do know is that LIAT later reduced the number of flights into Saint Lucia, a move some saw as punishment for Dr. Anthony’s delayed promises.

The company also continued to incur massive losses and this past summer suffered a meltdown of flight cancellations, operational problems as well as ongoing agitation by pilots and their union. Eventually, in September, LIAT’s Chief Executive Officer Ian Brunton resigned from the embattled and cash-strapped airline after what he described as a “disastrous summer” for the Antigua-based carrier.

What then has spurred Dr. Anthony to now back one of LIAT’s biggest cheerleaders and declare a loan guarantee for the airline despite all its financial woes?  The prime minister on Tuesday told reporters that he has agreed to guarantee a three million EC dollar loan to LIAT.

Without going into what lead to his decision or what sort of restructuring he had recommended to LIAT, Anthony, who is also the island’s finance minister, had this to say: “It’s not just a matter of changing the chief executive officer but dealing decisively with a problem in management that has been inherited over the years.”

He also called for a complete overhaul of the airline’s business model in order to ensure its long-term sustainability and recommended a revision of operations and logistics.

Anthony went on to point out that LIAT should stop operating in a traditional manner believing that the only two bases it can have in the region are Antigua and Barbados. “It has to rethink for example where it is in (the airline’s) best interest to have its maintenance facility,” Anthony said.

Does that mean part of the loan guarantee deal is for LIAT to shift some of its maintenance operations to Saint Lucia? Who knows? All we know is the little that the prime minister is revealing and clearly it is not enough.

“We are prepared to agree to a guarantee, in other words (LIAT) are the ones taking the loan and we are merely guaranteeing it,” said Anthony while admitting that loans taken up will be ascribed to the island’s GDP despite the brutal fact that as it stands now, Saint Lucia’s debt ratio and GDP are lurking near the graveyard at Vigie as LIAT flights soar overhead.

Since the prime minister’s announcement there has been a flurry of feedback in the media with some persons calling for clarity and transparency on the matter. Former tourism minister Allen Chastanet is not in support of the move, alleging that there seems to be collusion amongst the government shareholders of LIAT to keep competition out while bleeding taxpayers to feed the ailing sixty-year old airline.

The prime minister’s press secretary was in no mood to take any shots at her boss’s decision lying down. “And all of a sudden, everybody is a LIAT expert. Then LIAT doesn’t need a guarantee, it simply needs an inward transfer of brains,” wrote Jadia Jn Pierre Wednesday on her Facebook page. “The problems LIAT are facing existed when Allen Chastanet was Minister for Tourism. He never helped them. In fact, he made the situation worse by allowing American Eagle to come in and do the most profitable route. Who can forget Caribbean Star and Redjet? Many have come and gone. Many will come and go. Why? These short stops and our geographic layout are just not easy to manage,” wrote the “new” airline expert.

Jadia, as is her habit, then used a personal analogy to justify the actions of the prime minister in handling the affairs of the country.

“I remember my first loan for $10,000. I needed to build a home. Young, cashed in first salary, with a two year old child. Nobody I approached wanted to take the chance. Thank God, I found someone who believed in me. I struggled through it, but got it done. Sometimes all you need to grow and improve is for someone to believe in you,” elucidated the press secretary.

Based on those comments, I had to wonder, firstly, what happens if LIAT defaults on the loan and secondly, why has it taken LIAT sixty plus years to grow up? And since Jadia is so well-informed maybe she can share with the public on what basis the prime minister finally decided to help LIAT and why the matter was not brought before the House?

Meanwhile, this just in from Antigua-LIAT Chairman Dr Jean Holder who has admitted a “winter crisis” at the Antigua-based airline is possible. “I am saying there can be a crisis if we don’t sit down together and sort it out,” he said.

Speaking on Antigua’s Observer Radio, Holder called for pilots and other key groups to help prevent a second dose of the extended travel chaos that gripped the Caribbean region for two months this summer.

“What happened in the summer could happen (again) if LIAT and its pilots and its engineers and its flight ops department does not sit down and say ‘we at LIAT are family, we cannot allow this to happen,’” said Holder.

President of the Leeward Islands Airline Pilots Association (LIALPA) Carl Burke, less than two weeks ago, told the Observer that a second meltdown was brewing at the airline because of unsolved issues.

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