Gonsalves Defends Decision To Shift LIAT Headquarters

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KINGSTOWN, St. Vincent, March 12 2015 – Prime Minister Dr. Ralph Gonsalves has defended the decision of the shareholder governments of the regional airline, LIAT, to relocate the base of the airline from Antigua and Barbuda to Barbados.

Gonsalves told reporters that the decision taken at a meeting in Bridgetown last month was based on the realities of LIAT.

While the governments of Antigua and Barbuda, Dominica, Barbados and St. Vincent and the Grenadines have agreed to the shift, they also said that Antigua remains an important gateway for LIAT.

Four of the airlines eight ATRs will be located in Barbados, with one ATR-42 and one ATR-72 in Trinidad, and one ATR-42 and one ATR-72 in Antigua.

But Antigua and Barbuda Prime Minister Gaston Browne has written to the shareholder governments urging them to delay the implementation of the new policy.

Browne said that the relocation will result in job losses and negatively affect his country’s economy.

But speaking at a news conference here, Gonsalves said “the decision was taken unanimously with all the shareholder governments present, that is to say Barbados, Dominica, St. Vincent and the Grenadines and Antigua and Barbuda”.

He said that there has been no meeting of the shareholder governments since the Barbados meeting.

“So the decision of the shareholders is the decision that the management has to follow, which the board has to follow until the decision is altered, if altered by the shareholders.

“One shareholder can say that it would wish a decision other than what was decided, but a decision was made at a shareholders’ meeting,” he said.

“It is clear that the case is not only persuasive, but, to my mind, conclusive based on the data about that happens on the southern cone with traffic,” Gonsalves said, noting that 60 per cent of LIAT’s traffic is between St. Lucia, Grenada, St. Vincent, Barbados, Trinidad and Guyana.

He said that the main revenue destination is the Barbados-St. Vincent route, while the St. Vincent-Trinidad route is number two, while the destination with most passengers is Barbados, followed by St. Vincent.

“Those are the facts. LIAT has to be restructured in a comprehensive manner and that restructuring has been taking place, that’s why we invested all the money in re-fleeting,” he said of the US$100 million spent to replace aging de Havilland Dash 8 aircraft with ATRs.

“… from what the facts are, the decision seemed to have been clear and correct. Now those who may wish that those facts were otherwise, so be it, but I am interested in LIAT surviving, improving its service, delivering a better service to the people of the region, delivering a service which, in all the circumstances is the most competitive that LIAT can deliver.”

He told reporters that the reduction of LIAT’s staff from 800 to 620 will also put the cash-strapped airline on a firmer financial footing, adding that several other decisions were taken at the meeting last month.

“All these decisions represent a composite to keep LIAT in the sky to service us.”

The management of the airline had said that it needed five million US dollars in working capital. St. Vincent and the Grenadines has paid its allocation of $592,000.

Gonsalves defended his country’s continued investment in the airline, saying, ”… for St. Vincent and the Grenadines, LIAT is vital.

“Whether or not we have an international airport, LIAT is vital, and without an international airport, LIAT is an absolute necessity, and, for those who want to think otherwise, they live in cloud cocoland,” he said.

St. Vincent and the Grenadines is slated to complete its first international airport this year, four years later than schedule. (CMC)

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1 COMMENT

  1. Comrade Ralph has CLEARLY moved his OWN headquarters to la-la land.

    Finally he is talking about moving HEADQUARTERS – which is more specific than moving BASES, given that both Antigua and Barbados are ALREADY bases, and have been bases for many decades.

    But here are two consequences for moving the headquarters to Barbados…

    1. Barbados barely has the minimum necessities of a Department of Civil Aviation. Aviation in Barbados is a shambles – a joke – and has been for literally decades as the government appoints one career Air Traffic Controller after another to their (Peter Principle) Highest Level Of Incompetence.

    Barbados has no Civil Aviation Authority, it MIGHT still have one qualified Inspector, and it clearly does NOT have the oversight – in both laws and people – necessary to accommodate an airline with 10 or more busy aircraft and hundreds of skilled and licensed employees.

    2. With the headquarters moved to Barbados, the aircraft will need to be registered in Barbados. Apart from the massive cost, the fact that Barbados is ICAO/IASA Category 2 means that LIAT will no longer be able to operate into the US Territories of Puerto Rico or the Virgin Islands because – in the eyes of the US DoT – LIAT will become a new airline located in a new country. And the country of Barbados is evaluated as ICAO Category 2 – “has not shown itself to comply with ICAO safety standards”.

    We continue to see major problems developing in LIAT which originate from (lack of) competence. All three executive levels of LIAT – shareholders, Board and executive management – have little to no expertise on the areas in which they are making decisions, yet they race along as if they know it all.

    Apart from these major problems, we know that LIAT is virtually bankrupt – if from nothing else, from the mere fact that they have to make a decision on a monthly basis whether to pay the aircraft leases or the employee salaries. Apparently they cannot pay both.

    From all indications the three major shareholders are also virtually bankrupt – just scan the Barbados newspapers for daily reports of the government there being unable – or unwilling – to make payments internally. They owed one man $70 million in office rents they had never even started paying from the day they moved into the office building, and after he locked the dors one morning and was persuaded to open them again there is still no indication that has yet been paid off; as of today, Barbadians are still waiting for their 2013 income tax returns that should have been paid a year ago; and so on and so on.

    Antigua has financial problems, too. I happen to know that – for some years now – payment of pensions to the elderly have been sporadic, and can be delayed as long as two months – how do these poor people live in such circumstances?

    And St. Vincent has had some natural disasters which have sucked the tax coffers dry, as well as that other natural disaster in the new Argyll airport – deliberately (and apparently desperately) built almost at a right-angle to the prevailing winds.

    LIAT’s problems are political – which 100% decide the matter of competence. If Comrade Ralph wants LIAT to survive, improve its service, deliver a better service to the people of the region, and to deliver a service which is the most competitive that LIAT can deliver then he and his cohorts MUST remove themselves from the equation, appoint a Board who have more than no clue whatsoever (the more qualified and experienced the better), and get executive management who both know what they are doing and can nail its middle managers to their seats with muzzles attached.

    I am a-political – in fact I actually hate politicians and politics. Moving LIAT’s Head Office to Barbados is a really stupid idea, but BECAUSE that will hasten LIAT’s demise I am all for it. The taxpayers will suffer (yet another) balloon payment to LIAT to finance the move of the airline from one country to another, but it will hopefully be the last to tug at their pockets.

    Most attractive of all, employees in Antigua who are laid off will get some money in their hands to start a new career and get on with their lives – a luxury which would not be afforded them if the bailiffs chained all the doors early one morning and shut the airline down from one day to the next with nobody having time to set their affairs in order so they could transition from one job to the next.

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