‘LIAT needs a regional solution’

LIAT must be handled from a regional perspective. This came last week Wednesday amidst statements made by Barbados’ Minister of Tourism and International Transport, Richard Sealy.

He made it abundantly clear that the Ministry is working to restructure the airline at various levels, but he called upon the region to get involved.

The Minister admitted that it is a difficult situation, but assured, “We are very much in the process of trying our best with LIAT.”

He said that they are doing all they have to do “to make LIAT more competitive”. However, he beseeched, Barbados cannot do it alone.

To illustrate his point, with respect to taxation, Sealy said, “We are trying to restructure LIAT, in order to put it in a position that we can get demand up to the point that we can look at lower levels of aviation taxation, and that in itself is a discussion that has to be held at the regional level, because even if we [Barbados] reduce our taxes to nil, you still may have to pay taxes in other jurisdictions as well, where the flights originate or where they are heading, and so, a regional solution needs to be dealt with.”

He asserted that the Democratic Labour Party did not introduce the taxes, that the level of taxation is “nothing new”, and contended that “aviation is a heavily taxed industry, not only in Barbados, but the world over”.

Additionally, he reminded that part of the restructuring of LIAT includes the upgrading of the fleet, and to facilitate such, “It is this Government that engaged with the Caribbean Development Bank (CDB) a loan to just under Bds$17 million, and we are going through a re-fleeting exercise that is worth well over a $100 million.”

Again looking to the region in order to ensure completion, he added, “As we continue to get the equity contributions from the various shareholders, we will be in a position to complete the full change-out sometime during the course of next year. Apart from the CDB, the shareholders are required to make equity contributions, and that will allow us to complete the re-fleeting exercise.”

Organisational-level changes

Sealy also said that in addition to physical improvements, there must be change at the
organisational level. He said, “One of the conditions of the CDB loan, actually, is a full-scale institutional strengthening of the commercial department, and that is the sine qua non for getting the money out of CDB.”

Therefore, going forward, “Speaking of the commercial department, the Marketing and Customer Service department, is here, and the idea is to move Scheduling and Yield Management here as well. So we will have another seven staff members in addition to the 12 that are here. So, by and large, that aspect of the commercial operations will be here as we look to see what we can do to strengthen the work of LIAT,” he said. (KG)