Antigua and Barbuda commits US$20M into ‘new LIAT’

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By Shermain Bique-Charles

[email protected]

Antigua and Barbuda is apparently wasting no time in its attempts to help save LIAT, digging deep into its already strained coffers, and committing to invest as much as US$20 million into a new incarnation of the regional airline.

The government said on Thursday that it is developing a plan which also includes an invitation to private entities to invest in the carrier, which is headquartered in the twin island nation.

“In keeping with the requirements set out by the shareholder governments, that plan is to be developed in the shortest possible time and to be ready in a few days,” Information Minister Melford Nicholas told a press briefing.

He said the government must do what is necessary to resuscitate LIAT. “We are going to be encumbered by the decision LIAT shareholders have to take in respect to the liquidation of the airline,” he said.

Earlier this year, the government secured a US$15 million fund designed to be injected into LIAT but insisted that it would only be made available if there was a restructuring plan for the airline.

“We did not think it was necessary for LIAT to go this particular route and accordingly the events unfolding are what is meted out to us. The funds are available, they are still held in escrow and they will form part of the plan to restructure LIAT,” Minister Nicholas added.

A decision was also taken, according to the government, to have the Registrar of Companies in Antigua and Barbuda reserve the name ‘LIAT 2020 Ltd’ for the new entity.

The country’s Prime Minister Gaston Browne says the twin island state is opposed to the liquidation of LIAT 1974 Ltd without a plan to create the necessary connectivity which regional integration requires.

Prior to the coronavirus pandemic, LIAT linked 15 countries across the region, operating almost 500 flights a week.

In a biting statement posted to his official Facebook page yesterday, PM Browne lambasted regional shareholders for walking away from their liabilities to LIAT, dubbing them “morally reprehensible”.

“It’s LIAT today, but it may be the OECS, Caricom Secretariat, or some other regional institution that may suffer a similar fate in the near future. As we collapse these institutions, we collapse the integration movement,” he said.

But Browne pledged, “Ultimately, LIAT will rise again like a phoenix from the ashes. We will never allow anyone, or group of insular Caribbean leaders to kill this important regional institution.”

LIAT’s 900 staff – more than 500 of whom are in Antigua and Barbuda alone – have expressed concerns about their future. The cost and distribution of severance among the shareholders will be assessed, minutes from Wednesday’s Cabinet meeting said.

All this comes as Caribbean governments are plotting a new course to stimulate and facilitate intra-regional travel. Barbados is LIAT’s majority shareholder and that country’s Prime Minister Mia Mottley disclosed yesterday that its plan includes a review of taxes, long blamed for the high cost of intra-regional travel, and matters relating to licensing.

Mottley signalled it would not be business as usual as efforts get underway to fill the void, saying that LIAT is a “treasured institution” and it could not continue with hundreds of millions of dollars of accumulated debt.

“It is a sad moment but, equally, we are not going to leave Caribbean people stranded, because we understand that at the core of the community is the issue of transport and communication,” she said.

Mottley said, however, that she favoured the private sector taking the lead on the proposed replacement carrier.

Meanwhile, the union representing LIAT pilots has filed an injunction in the courts, preventing further layoffs.

LIALPA is represented by attorney Justin Simon and the application was filed on June 22 ordering LIAT to rehire its laid off pilots and not to press ahead with any additional redundancies.

About 90 pilots have been dismissed by LIAT since the outbreak of the Covid-19 pandemic.

Head of LIALPA, Patterson Thomas, said on Wednesday that he was concerned pilots had not yet been given any indication when they were likely to be paid severance and other money due.

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