LIAT to cut top management by half – announces plans to achieve $7M profit in 2013

LIAT’s CEO Ian Brunton has announced a business plan for the cash- strapped airline that will see the company slashing its top-tier management team from 13 persons to 7, including the CEO’s post.

Speaking at a press conference in Antigua last Friday, Brunton criticised the company’s overly large Executive Management team, stating that there was very little delegation of authority evident. The restructuring move, he explained, would also comprise fostering a “culture of autonomy with accountability through the organisation”. The airline, according to the CEO, would hence function more efficiently, promising improvements in both the financial and operational performances of the
company.

A reduction in head count was cited as one of the contributing factors to the company being able to reduce its overall costs by 10 per cent since 2011. In the first quarter of that year, unions agreed to LIAT’s layoff plan, which would see the closure of ticketing offices around the region in a move to save EC$3 million annually.

The CEO also disclosed the carrier’s intention to capitalise on the imminent exit of American Eagle by March 2013 by taking “the opportunities presented by these gaps”. He noted that there has been an overall gradual reduction in competition in most of LIAT’s markets.

Additionally, it was revealed that LIAT would be seeking entry into new markets to increase revenue. Such markets include Haiti, Panama, Jamaica, Aruba, and the Dominican Republic.

While branching into new territories, the company head reiterated the need for regional countries who benefited from its services to come on board in footing some of the bill. It was reported months ago that LIAT would cut routes on poor performing sectors if culprit governments did not step forward with a financial guarantee. It was also reported that there were 39 unprofitable flights affecting 18 territories.

The company’s CEO reported that it would continue on its fleet overhaul plan to render it more efficient and that LIAT would be targeting a 20 per cent equity contribution to fund the association capital costs – 15 per cent from its three major shareholders and an additional five per cent from other regional governments who have expressed an interest in investing in LIAT.

The costs are estimated at just over EC$78.6 million (US$29.1 million). The remaining funding, he stated, would be via a long-term commercial loan.

Additionally, the company is seeking to increase its load factor from the current 54 per cent to 75 per cent, thus increasing its network by a reported excess of 30 per cent.

The above-mentioned action points factor into the company’s projected $7 million in 2013 and by 2017, an excess of EC$40 million. (RA)