Caribbean News

Antigua PM wants his fellow shareholder governments to reconsider liquidating LIAT

Antigua and Barbuda Prime Minister Gaston Browne Thursday said his island would remain committed to the regional integration movement, CARICOM, even as it registered again its opposition to the decision of regional shareholder governments to liquidate the Antigua-based regional airline, LIAT.

Browne in a letter to his colleagues leaders in Barbados, Dominica and St. Vincent and the Grenadines, expressed his “deep regret’ at the decision, despite his objection, to liquidate the cash-strapped airline, during last weekend’s meeting of shareholder governments.

Browne in his letter said that Antigua and Barbuda has always played a meaningful role in the regional integration movement and that it has also “used our vote and our voice in the international community to stand-up for the interests of every other CARICOM country and to support strongly their desire to occupy key offices in the international community and at the United Nations, including the Security Council.

“The absolute necessity of collaboration and cooperation with the member nations of our CARICOM family is, for Antigua and Barbuda, an article of faith.  We know that it is no cliché to assert that we are stronger together and weaker apart.

“Therefore, even though we are disappointed that other shareholder governments have considered it necessary to liquidate LIAT 1974 Ltd without sympathetic consideration of the impact of this decision on Antigua and Barbuda, or of the fact that aviation services, through LIAT’s operations, represent the only tangible benefit to Antigua and Barbuda of its participation in CARICOM, our national commitment to the ideal of a strong and vibrant Caribbean Community remains.”

The major shareholder governments of the airline that is in debt to the tune of millions of dollars, including EC$94 million (One EC dollar=US$0.37 cents) in severance payments and arrears to its workers, are Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines.

Browne said that LIAT was started in 1956 as a modest operation between Antigua and Montserrat and despite its financial problems over the years provided “an essential bridge between the people of our Caribbean nations that gave meaning and substance to integration for business, commerce, socialization and a Caribbean identity.

“Indeed, it is true to say that LIAT’s challenges, including its operating losses, derived from its continuous battles to maintain aviation stability and sustainability for the Caribbean people against opportunistic rivals who abandoned the area when their ambitions to profit from it failed to materialize.

“We, in Antigua and Barbuda, cannot abandon LIAT.  LIAT did not abandon the Caribbean people. LIAT did not fail the region, it transported the region’s people safely for over six decades.  It is those who undermined it, by encouraging transient profit-seekers in competition that failed it, Browne wrote in his July 2nd letter.

He said it is also troubling to his administration that shareholder governments “would decide by majority vote to liquidate the airline without putting in place any arrangements for meeting obligations to creditors and employees.

“Creditors extended credit to LIAT because it was an airline owned by Caribbean governments; their expectation was that Governments would not renege on sovereign debt.  Those creditors are now disadvantaged by the failure of shareholder governments to seek to negotiate with them reasonable terms for affordable repayment.

“A similar circumstance applies to the employees of LIAT who are all CARICOM nationals.  Surely, it is the obligation of governments, particularly as shareholders of LIAT, and, therefore, the employers of LIAT staff, to work-out some form of negotiated compensation for them.”

Browne said that his government “remains convinced that LIAT 1974 Ltd could be reorganized for the benefit of the Caribbean’s people; to continue to provide the essential bridge between our nations; to satisfy obligations, at least partially, to creditors and employees through  negotiations; and to turn the airline into a leaner, more efficient service that could be profitable.

“After all, in as much as LIAT 1974 Ltd, has been saddled with many challenges, its loss was EC$12 million last year.  A reorganized operation, efficiently managed, could turn around to produce modest profits.

“It is against this background that the government of Antigua and Barbuda once again calls on the main shareholder Governments of LIAT 1974 Ltd to reconsider the decision to liquidate the airline and, instead, to give meaningful consideration to reorganizing it.  We emphasize that a technical report already exists that could be the blueprint for deliberation of reorganization.”

Browne said that Antigua and Barbuda was looking forward to receiving “an early response” from the other shareholder government on the proposal for reorganization which would “not only maintain LIAT 1974’s essential service to all our countries, but would also keep faith with LIAT’s creditors and employees, and put in place management policies and plans to make the airline return sufficient profits not to require subsidies by governments.

“As a contingency arrangement, should you decide not to consider the reorganization of LIAT 1974 Ltd, the government of Antigua and Barbuda intends to launch LIAT 2020 Ltd as early as possible,” Browne wrote, adding “to this end, we have applied to resister the name, and we hereby seek your release of the trademark to allow LIAT 2020 Ltd to be registered”.

He said that in full transparency, his administration set aside EC$20 million to capitalize the company; secured the serious commitment of other governments and private sector partners to take equity stakes, producing, so far, another EC$20 million as well as putting an expert team in place to produce a plan for a lean and efficient operation that would be profitable.

“Further, we extend an open invitation to all CARICOM governments, particularly the main shareholders of LIAT 1974 Ltd to participate in the ownership of LIAT 2020 Ltd. We remain convinced that a sustainable air bridge between the countries of CARICOM is essential to the success of regional integration in all its aspects, as it is crucial to act as a feeder airline for the transportation of tourists.

LIAT is a Caribbean institution that has defeated predator airlines that crumbled when their goal of quick money did not materialize.  We in the Caribbean should enhance our institutions for our individual and collective good over the long-term, and not succumb to tearing them down to satisfy passing, short-term pressures,” Browne wrote in his letter.

CMC

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