LIAT may be on the verge of collapse, again


By Editor – September 19, 2019

Regional cash-strapped airline LIAT may be on the verge of collapse, again.

With negotiations between majority shareholder Barbados and Antigua and Barbuda having completely broken down, there are suggestions that only a miracle will prevent the cash-strapped airline’s operations from crashing.

It would, however, not be the first time the airline has looked set to be permanently grounded, as back in April Chairman of LIAT shareholders Dr. Ralph Gonsalves had expressed fears that its closure was “imminent”.

Labour sources close to Government told Barbados TODAY they had recently been informed that the situation regarding LIAT had gone from “bad to worse”.

The source explained that during the recent negotiations between Barbados and Antigua, held over three months, the other shareholder governments made no financial contribution to the airline’s upkeep, as they expected a decision to be reached.

“During the negotiations, nothing was done to keep LIAT in the air, which means that there has been no financial aid to LIAT in the last few months,” the well-placed source said.

The airline’s bid to stay in the air will be high on the agenda at its Annual General Meeting early next month.

“If something significant doesn’t happen at that meeting LIAT will almost certainly collapse,” the source predicted.

The source said that a deal between Barbados and Antigua and Barbuda had seemed imminent at one point, when, back in July during a meeting at the Hilton Barbados Hotel, Antigua and Barbuda’s negotiation team, which included two government ministers, had agreed almost fully to Barbados’ request to take over LIAT’s US$44 million in debt in exchange for its 49.4 per cent majority stake.

The lone request from Barbados which had not been completely agreed to was that if layoffs were to happen in Barbados, its government would have to be notified beforehand.

However, on return to Antigua and Barbuda, the negotiated position was dismissed by Prime Minister Gaston Browne who reportedly said he would not agree to those terms if the debt had to be taken over.

The source said Barbados had no intention of selling its majority shares in LIAT if it meant it would still have to repay its debt.

A LIAT collapse would mean that future air travel in the region could possibly be split between several airlines, according to the source.

Earlier this year, Prime Minister Mia Mottley gave LIAT’s continued lack of profitability and Barbados’ reluctance to continue to prop it up, as key to this country’s willingness to give up its majority shareholding.

“The current model which LIAT has within 1974 limited is not an attractive model and what is needed is significant restructuring, indeed a new model of governance, a new financial model and a new operational model in order for it to be able to extract greater benefits and provide the services which it does,” the Prime Minister said at the time.

Efforts to reach Attorney General Dale Marshall, Barbados’ lead negotiator and Minister of Tourism and International Transport Kerrie Symmonds for comments were unsuccessful at the time of publication.

First published (Barbados TODAY)

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By Editor – September 19, 2019

Regional cash-strapped airline LIAT may be on the verge of collapse, again.

With negotiations between majority shareholder Barbados and Antigua and Barbuda having completely broken down, there are suggestions that only a miracle will prevent the cash-strapped airline’s operations from crashing.

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It would, however, not be the first time the airline has looked set to be permanently grounded, as back in April Chairman of LIAT shareholders Dr. Ralph Gonsalves had expressed fears that its closure was “imminent”.

Labour sources close to Government told Barbados TODAY they had recently been informed that the situation regarding LIAT had gone from “bad to worse”.

The source explained that during the recent negotiations between Barbados and Antigua, held over three months, the other shareholder governments made no financial contribution to the airline’s upkeep, as they expected a decision to be reached.

“During the negotiations, nothing was done to keep LIAT in the air, which means that there has been no financial aid to LIAT in the last few months,” the well-placed source said.

The airline’s bid to stay in the air will be high on the agenda at its Annual General Meeting early next month.

“If something significant doesn’t happen at that meeting LIAT will almost certainly collapse,” the source predicted.

The source said that a deal between Barbados and Antigua and Barbuda had seemed imminent at one point, when, back in July during a meeting at the Hilton Barbados Hotel, Antigua and Barbuda’s negotiation team, which included two government ministers, had agreed almost fully to Barbados’ request to take over LIAT’s US$44 million in debt in exchange for its 49.4 per cent majority stake.

The lone request from Barbados which had not been completely agreed to was that if layoffs were to happen in Barbados, its government would have to be notified beforehand.

However, on return to Antigua and Barbuda, the negotiated position was dismissed by Prime Minister Gaston Browne who reportedly said he would not agree to those terms if the debt had to be taken over.

The source said Barbados had no intention of selling its majority shares in LIAT if it meant it would still have to repay its debt.

A LIAT collapse would mean that future air travel in the region could possibly be split between several airlines, according to the source.

Earlier this year, Prime Minister Mia Mottley gave LIAT’s continued lack of profitability and Barbados’ reluctance to continue to prop it up, as key to this country’s willingness to give up its majority shareholding.

“The current model which LIAT has within 1974 limited is not an attractive model and what is needed is significant restructuring, indeed a new model of governance, a new financial model and a new operational model in order for it to be able to extract greater benefits and provide the services which it does,” the Prime Minister said at the time.

Efforts to reach Attorney General Dale Marshall, Barbados’ lead negotiator and Minister of Tourism and International Transport Kerrie Symmonds for comments were unsuccessful at the time of publication.

First published (Barbados TODAY)