One of the oldest airlines in the Caribbean, LIAT (established in 1956) is one of the more recognizable Caribbean brands. But unlike other recognizable regional brands like say Angostura, Sandals and Grace, LIAT’s recognition has little to do with success. In fact, year after year the airline has registered major financial losses.
The topic of LIAT has also been discussed at major CARICOM and CTO meetings, yet a successful model plan for the airline has never been arrived at. Over the years, various island shareholders have consistently bailed LIAT out of its financial difficulties using taxpayers’ money.
A CTO study in 2007 revealed that Caribbean travel trends showed that multi-destination and intra-regional tourism was by and large under-exploited and under-developed.
The study also described as “dismal” the financial performance of regional airlines.
Amidst all of this a regional tourism entrepreneur believes that it is time for all the talking over LIAT to end and a plan of action be implemented. His name is Robert Pitcher, the Director of “Sun ‘n Fun” publishing which hosts eighteen commercial websites including Caribbeantraveller.com. Pitcher has been on a crusade over the last few years for the LIAT financial debacle to end. However, he is quick to point out that he does not want the airline to go out of business. “After all, I am a customer and a shareholder of LIAT by virtue of the fact that Barbados, where I am from, is a shareholder using taxpayers’ money to fund this airline,” Pitcher contends.
“LIAT has been a problem for the last 59 years. Never made money, but it is understood in this day and age that LIAT is really designed to transport the people of the Caribbean from one island to the next at an affordable cost, not really to make a big profit like the major airlines, but also not to lose money and cause the taxpayers of these countries to pay high costs of travel,” Pitcher said in an interview with the STAR.
As taxpayers, he says the people of the region need to be informed as to how many aircraft LIAT owns, how many are leased and at what cost. According to Pitcher, “the four shareholder countries have signed a guarantee, to the tune of US$110 million, to ensure new ATRs came on stream, and we are still unsure of what we got for that.”
He goes on further to say that above all of this, the high cost of travel in the region is a worry to most. “I can now leave Barbados and travel to Toronto for about US$450 and that would be cheaper than
flying from Barbados to Antigua which would be more than US$500,” the publisher explains. “The cost of the ticketing is not what is really costly; it is the high taxation that all the governments have placed on the tickets,” he adds. “So we need to ask government to reduce these high taxes; they must do it. If not, we will find our people migrating to foreign territories and intra-regional travel will continue to decline.”
According to Pitcher, the Minister of Tourism in Barbados recently stated that the Caribbean was the third source market for Barbados. Pitcher has debunked her figures of about ten percent, but also says that had it not been for the presence of the US embassy in Barbados that figure would have been maybe three percent. “What you have are persons from the islands coming to Barbados to obtain visas to go to the United States, they are not coming because they want to come on a holiday,” he charged.get rid of the entire LIAT board. “If you keep doing the same thing year after year, you would get the same result. And if the head is bad then the body cannot function,” Pitcher says.
Recently there were calls by the prime minister of St. Vincent, Dr. Ralph Gonsalves for other regional governments to back LIAT or face being boycotted by the airline. Describing the statement as foolishness Pitcher says; “My advice to the three doctors: Dr. Anthony, Dr. Gonsalves,
Dr. Douglas, would be do not put one cent of taxpayers’ money into LIAT until the management structure changes.” “Recently the management spoke of reducing staff by 20 percent. How many of those persons would be middle management?” he questions.
Robert Pitcher told the STAR that he did not wish to see LIAT go out of business but simply wanted to see the airline remodeled into a better entity and not run by heads he described as have little experience. Flight scheduling is also something he said needs to be looked at closely in consultation with staff who know the numbers as well as a statistician.
“I have great respect for LIAT’s staff and the airline’s safety record,” he says. “The expertise of the ground staff in all territories is au fait but management continues to demoralize them.” A case in point, he says, was when one agent was sent home for two weeks without pay for taking a non-paying
passenger off a flight and replacing that person with a paying passenger. “You think that doesn’t affect the morale of staff?”
“Whatever it takes to get rid of the top management of LIAT and restructure the airline, needs to be done now,” Pitcher says. “If not, it will continue to fail and taxpayers’ money used to bail it out.”
In 2013 LIAT sought the assistance of regional governments to back a loan agreement with the CDB. The proportion required by each government to guarantee was about US$2.5 million.The Antigua-based arrier, which flies to 21 destinations in the Caribbean, was at the time in the process of replacing its aging fleet and was looking to borrow between US$60 and US$70 million from the CDB.
The airline had also indicated that it had recently unveiled a new business plan to help reverse an EC$43 million loss in 2011 and projected a two per cent profit in 2013. However, LIAT suffered
major losses in 2013 and had one of its worst summers as the airline was unable to move people efficiently across the region, leaving many stranded.
The current LIAT shareholder governments are Antigua & Barbuda, Dominica, Barbados and St Vincent & the Grenadines.