Business

Grenada becomes fifth shareholder government in LIAT

Grenada has become the latest shareholder government of the cash-strapped regional airline, LIAT, saying that the island stands to benefit from the decision to become a shareholder.

“When we look at the figures from the number of passengers that LIAT brings to Grenada, off course the multiplier effect is great,” said CARICOM Affairs Minister, Oliver Joseph.

“LIAT brings in thousands of visitors to Grenada every year and therefore from an economic and social point of view Grenada had to support LIAT because not supporting LIAT will mean the loss of revenue and economic development to our country,” he told reporters at the end of the weekly Cabinet meeting on Tuesday.
Official Government data shows that last year, 44,072 passengers used the services of the airline to and from Grenada while for the first quarter of 2019 the number stands at 10,896.

Joseph said that Grenada’s decision to become a shareholder had been made and accepted at the shareholders meeting in Antigua on April 30.

“I am pleased to announce that Grenada is now the fifth shareholder in the airline, so together with the governments of Barbados, Antigua and Barbuda Dominica, St Vincent and the Grenadines, Grenada at that meeting, is now accepted as the fifth main shareholder in LIAT,” he said.

Joseph, who is also the Trade and Industry Minister here, said that Grenada has given an undertaking to continue supporting LIAT restructuring and a number of models have been examined but a final decision is yet to be presented to shareholders.

“At the meeting, Grenada insisted that LIAT should operate as a business and the operations should be restructured and so as a shareholder we will make our voice heard at the board meeting so that we can see value for money from LIAT,” he said, adding that the investment made by the island to date is EC$1.3 million (One EC dollar=US$0.37 cents).

The shareholder governments have been asking other Caribbean governments to provide financial assistance to the Antigua-based airline that services 15 Caribbean countries.

St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves confirmed last week that St. Kitts-Nevis had joined Grenada in responding positively to the call for raising US$5.4 million to help the airline deal with its current financial problems.

St. Lucia Prime Minister Allen Chastanet has that Castries would not contribute any funds unless there’s a significant change to the airline’s structure.

Joseph told reporters that he is not aware of any interest expressed by Richard Branson of the Virgin airlines to partner with LIAT but believes that if such an approach was made it will be considered favourable by the shareholders.

“I am not aware that Virgin has express any interest in LIAT but they are looking at various models, so if Virgin express interest, that is something that LIAT board will consider because government maintains that you have to restructure LIAT, so if you get a partner I am sure that the board will consider it favourably,” he added.

Gonsalves says he has received no formal indication from Branson, t\saying “as the chairman of the shareholders, I have not been aware of that. Nobody has contacted me about that.

“Whether Branson said so in an off-hand way or in a serious manner, I don’t know. You know something rich people say something. I don’t usually jump like that when rich people make a suggestion until I see something really meaningful,” Gonsalves said.

Joseph said that one of the main restructuring formats under consideration is for governments to contribute to airlines through a Minimum Revenue Guarantee plan that will provide for non-profitable routes which need the service to provide financial support.

CMC

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