ENOUGH! – LIAT shareholder governments insist on level playing field

THE Chairman of the LIAT shareholder governments, Dr. Ralph Gonsalves, says that if the playing field between LIAT and Caribbean Airlines (CAL) cannot be levelled through political dialogue, the airline is prepared to have it done at a higher body.

According to the Prime Minister of St. Vincent and the Grenadines, the LIAT shareholder governments are seeking a meeting with the Kamla Persad-Bissessar led Trinidad and Tobago government to discuss what LIAT has labelled the unfair fuel subsidy granted to Caribbean Airlines.

From right: St. Vincent and the Grenadines’ Prime Minister, Dr. Ralph
Gonsalves; Barbados’ Prime Minister, Freundel Stuart; Barbados’
Minister of Tourism, Richard Sealy; and Chairman of LIAT, Dr. Jean Holder. 

Gonsalves made these comments during an interview following a meeting of the shareholder governments at the Hilton Barbados last Friday.

LIAT is seeking that either it be given a subsidy similar to what CAL receives, or that CAL be made to pay the going price for fuel.

According to Gonsalves, with the subsidy CAL pays approximately US$50 per barrel, while LIAT pays approximately US$140 a barrel.

He revealed that due to the subsidy advantage, in the five-year period between 2008 and 2012 LIAT expended US$106.1 million on fuel versus the approximate subsidy price of US$43.64 million.

In addition to that, Gonsalves said that LIAT felt additional losses due to the 78 000 passengers who opted to fly Caribbean Airlines because of the fuel subsidy.

“It is one or two things you have to do – you have to give us the subsidy or let CAL pay what is the going price for fuel. So if the price is US$140 a barrel and we are paying that, you pay it too. Of course, that is going to put them in even more severe financial difficulties, so one possibility is for them to give us a subsidy for something approximating the difference between what CAL pays and what we currently pay at the market price,” Gonsalves stated.

Should these discussions fail to bring about a favourable solution, however, Gonsalves revealed that LIAT has the legal backing to take the matter to arbitration to the Caribbean Court of Justice or to the CARICOM Competitive Commission.

“Under the Common Air Services Agreement, we can go to arbitration and the arbitration is binding and final. Under the Revised Treaty of Chaguaramas, we can go to the CCJ or we can go to the CARICOM Competitive Commission. So there are different avenues which are possible to go. There are several provisions which we are alleging in the Revised Treaty of Chaguaramas which have been breached and it is clear the Air Services Agreement has been breached,” the PM explained.


When asked about whether LIAT is considering taking the matter as far as the World Trade Organisation (WTO), Gonsalves maintained that they would rather the issue be resolved regionally and not on the world stage.

“We don’t need to go [to the WTO]; we will be able to deal with everything in our own set of institutions in the region. But I am hoping that we don’t even have to go to any of those – I want to solve the problem through political dialogue,” Gonsalves said.

Though he conceded that it would not be an easy process, he stated that LIAT and the stakeholder governments will not be exhausted.

“I don’t think we will get a solution to the issue [soon]. I think we will work out modalities as to how we can get to a solution because they may not concede the issue off the top. They might say they have to study it more, the usual kind of ‘wait and see’ and hope to exhaust you. But we would not be exhausted on this – we are serious, it is too important a question,” Gonsalves stressed.

As for what the region can expect should the issue be resolved in LIAT’s favour, Gonsalves said that it could be reflected in cheaper air fares by the airline. (AN)