In the wake of LIAT’s collapse, six privately-owned airlines are vying to fill the void created by the regional airline.
Shareholder governments of the airline last week reported that they are no longer able to prop up the ailing entity and that it would be liquidated.
The regional carrier’s financial situation worsened because their planes had been grounded for several weeks due to closing of borders and reduced travel demand amid the COVID-19 pandemic.
Addressing the opening of the summit of CARICOM leaders, St. Vincent and the Grenadines Prime Minister, Dr. Ralph Gonsalves who is responsible regional transportation in the quasi-cabinet is confident that several airlines will be able to provide cheap and safe air travel.
“I believe that we are going to be able to provide, in a very short time, a sufficiency of regional transport to serve the sub-region, to serve ourselves safely, reliably, sustainably, and reasonably priced. I want to give that assurance to the people of the Caribbean Community,” he said in receiving the chairmanship of CARICOM from Barbados’ Prime Minister, Mia Mottley.
Gonsalves and Mottley said several airlines would fill the gap left by LIAT. They include the Trinidad and Tobago government-owned Caribbean Airlines, The Turks and Caicos-based interCaribbean, One Caribbean in St. Vincent and the Grenadines, SVG Air, United States-based Silver Airways, and the France based Air Antillies.
“We are satisfied that these six airlines can more than fill the immediate gap, particularly given the reduced travel within COVID,” Motley said. She added that the door remained opened to other private sector players who are interested in working on their own or with existing airlines because most Caribbean governments can no longer afford to spend money on keeping a regional airline afloat.
“Governments now have to use their funds to deal with health expenditure, to be able to be able to deal with water, to be able to deal with other forms of transport , to be able to deal with our tourism sector as well as our vulnerable populations are all requiring us to hold their hands because they have come to zero revenue,” continued Motley.
Against the background of Antigua and Barbuda’s Prime Minister, Gaston Browne reportedly boycotting the CARICOM summit because LIAT is being closed down, Ms. Mottley says there is no other lawful choice.
“The Board of Directors, because of the heavy debt which LIAT has been carrying, not now, but for many, many years has indicated to us that it is no longer possible to trade as LIAT (1974) Ltd and that in truth and in fact, that the company is effectively insolvent and that it needs liquidation,” said Motley.
An Attorney-at-Law by profession, the Barbados Prime Minister noted that if the insolvent company was kept in operation, “directors will be guilty of fraudulent trading.” “To that extent, as shareholder governments, we have had to respond simply because to do otherwise would mean providing a level of funding that we simply do not have in the affairs of our community and in the affairs of our nations,” Mottley added.
Antigua and Barbuda’s Prime Minister, Gaston Browne has said his already cash-strapped country, struggling every month to pay salaries and pensions on time, was willing to invest at least US$20 million into LIAT. The airline owes its staff US$70 million in severance and holiday payment
Leeward Island Air Transport Services was founded in 1956, but ownership of the airline was acquired by 11 Caribbean Governments in 1974 and it was renamed LIAT (1974) Ltd.