In multiple public statements and interviews in recent weeks, top LIAT officials provided contrasting outlooks on the future of the beleaguered airline, which is reportedly facing potential financial collapse.
Earlier this year, multiple regional media outlets reported that LIAT’s shareholder governments — Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines — had called on other Caribbean jurisdictions to raise a $5.4 million emergency injection to help keep the airline flying.
The company announced in March that it was in talks with various regional governments to try to implement a new arrangement that would spread the airline’s financial burden among all the destinations “benefitting” from its services.
LIAT proposed that such an agreement would take the form of a “minimal revenue guarantee” model, with regional governments guaranteeing the airline a set amount of cash if the routes to their airports don’t make enough of a profit. The company requested the agreement from governments at 11 destinations it serves, including the Virgin Islands, according to Shavar Maloney, LIAT’s corporate communications manager.
“The minimum revenue guarantee is important to ensure continued service to the territory as well as to assist the airline to operate in a sustainable manner,” Mr. Maloney wrote in an email to the Beacon this week. “The airline cannot continue to suffer losses just to ensure connectivity.”
If the VI government chooses not to accept LIAT’s revenue agreement, the company’s commercial team “will assess our flights and move to eliminate those that are incurring losses to the airline,” Mr. Maloney added.
Premier Andrew Fahie could not be reached for comment regarding LIAT’s proposal.
Last month, Dr. Ralph Gonsalves, the prime minister of St. Vincent and the Grenadines and the chairman of the LIAT Shareholders Government Group of Countries, told the Grenada Broadcasting Network that only Grenada had responded, pledging to contribute $1 million to the company.
If other governments refuse to follow suit, LIAT would have to start cutting routes, he explained. The airline could even potentially shut down completely, an option the prime minister said was “becoming more and more realistic.”
On Monday, however, LIAT issued a press release that appeared to contradict Dr. Gonsalves’ statements.
LIAT CEO Julie Reifer-Jones acknowledged the ongoing discussions with regional governments about the minimal revenue guarantee model, and she noted that though talks had been slower than anticipated, “the company remains optimistic that the discussions will be concluded shortly,” the press release reports.
The company’s board of directors and shareholders planned to meet in Antigua this week to review “proposed measures for taking the airline forward,” the press release added.
Asked about the mixed messages from his company’s top officials, Mr. Maloney reiterated Ms. Reifer-Jones’ statements, noting that LIAT was still in discussions with different governments to ensure “these guarantees are put in place soonest.”
“The CEO has expressed a commitment to continue flying despite the challenges facing the airline and is working to ensure that LIAT remains in the Caribbean skies,” he wrote. “LIAT remains committed to flying the region and connecting our territories while ensuring it does so in a sustainable and efficient manner.”