Wednesday, 12 March 2014

LIAT needs more support

Do they mean it this time? And where will the first set of action be taken once they have committed themselves to take the necessary action? These two questions relate to the promises by key personnel from LIAT, the Caribbean island-hopping airline, to take decisive action against those countries that continue to benefit from the airline, but who refuse to contribute to its survival.

It is a fact that the threat has been made several times in the past in an attempt to bring on board the other countries which have not been giving financial support to the airline. LIAT officials have reasoned that once they have the full support of more countries then that could ease many of the woes which the airline continues to face, and even placing it in a better position to do more.

That was all there was to it – a threat and no action – to force the hands of the others.

In the meantime, the governments of Antigua and Barbuda, Barbados, and St. Vincent and the Grenadines, and more recently Dominica continued – we almost said on their merry way – in underwriting LIAT.

Officials of LIAT met in Barbados recently. It is reasonable to assume that they would have discussed the present situation with the carrier, including the process of fleet rationalisation and in a difficult economic environment.

Following the meeting in Barbados, Chairman of the LIAT, Dr. Jean Holder, said that management of the company had hoped to persuade countries to put in their money. He said that the route of persuasion has run its course and the company must now take what he referred as decisive action.

Such comments seem to indicate that the airline’s management is serious and will begin to put in motion plans deemed as appropriate for the matter at hand.

In the past LIAT management personnel have said that there are a number of unprofitable routes in some destinations which call for urgent attention. That urgent attention meant either reducing the service or dropping it altogether.

Operating an airline is not the cheapest thing to do in the world. The first thing that confronts airline management is the cost of fuel. Such costs are exorbitant, a point that has repeatedly been hammered home by Dr. Ralph Gonsalves, Chairman of the LIAT Shareholder governments and Prime Minister of St. Vincent and the Genadines. In the battle over subsidies allegedly granted Caribbean Airlines, Dr. Gonsalves had made the point to the authorities in Trinidad and Tobago where Caribbean Airlines is owned, that the costs LIAT had to bear with respect to fuel had a significant effect on the operations. The playing field therefore was not levelled, where one carrier benefited from support and the other did not.

Another cost which is hampering LIAT is the declining rate of travel across the markets where the airline operates. As referred to earlier, LIAT operates some routes which could either be amalgamated or where the capacity can be reduced so as to save money.

These days most Caribbean governments served by LIAT are experiencing economic woes. When to this is added, the belt tightening measures many governments have instituted to correct economic imbalances, these two impact on travelling around the region.

Whatever action is taken by LIAT management, they are going to be criticised, however much they will be doing so in the best interest of the Caribbean.

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