LIAT 2020 Ltd is expected to fly by mid-year as talks with possible investors continue.
This was revealed by Minister of State within the Ministry of Finance Lennox Weston on Monday while speaking on the Observer AM radio show.
He said negotiations are gathering momentum with potential investors in the regional carrier’s new incarnation.
“In the Observer paper today, you would have seen an ad where LIAT 2020 is now advertising for applicants for new positions. We have earmarked LIAT 2020 to start to fly in June of this year,” Weston said.
“We are still in the final stages of negotiations with potential investors. I want to say though that, based on our feasibility studies, if needs be the Antiguan government can finance this airline by itself.
“We have restructured LIAT without legacy issues into a very liable airline that can pay for itself and where financing the airline is not even beyond the means of Antigua and Barbuda,” Weston said.
Despite his confidence that the government could solely fund the new airline, Weston did mention that there have been a few other governments that have already come on board.
LIAT has been under a court-appointed administrator since 2020, after the Covid-19 pandemic grounded the airline for an extended period. It has since been operating a reduced schedule with a limited workforce.
Meanwhile, Weston admitted that efforts to find an investor with deep pockets, willing to take on LIAT’s losses and then restart a new airline have proven difficult.
“I mean just the benefit for the workers alone is over $120 million. When you add all the other taxes and all the other things owned by LIAT 1974 Ltd it’s difficult to find an investor who would want to eat that upfront when you can start a new airline cheaper.
“If Liat 1974 does not get that sort of level of investment then it will be dissolved, then dissolution will take place based on the law and the benefits for the workers will be paid from the sale of the assets of LIAT 1974 Ltd,” Weston explained.
Owned by a handful of Caribbean shareholder governments, LIAT 1974 Ltd provided crucial regional connectivity for decades but folded when the Covid pandemic exacerbated its long-standing financial woes, leaving hundreds of former staff agitating for severance and other payments.
Weston added that the best bet for the staff is to accept the government’s offer of a “compassionate” settlement of 50 percent, payable in cash, lands and bonds.
“They have a different view that the assets will yield tremendous benefits because the government is trying to rob them of those benefits, so they might get 20, 30 cents on a dollar if we are fortunate in the sale.
“The government has a compassionate offer that is open right now so my recommendation is to take it, and then they should fight for the additional that will come from LIAT dissolution if that happens. That to me would be the wisest thing to do,” Weston said.
The government released a statement in late December indicating that it was providing EC$2 million to meet partial satisfaction of the cash component of the “compassionate payout” to locally-based former employees of the regional carrier.
The statement, issued by the Office of the Prime Minister, said the funds were being made available for distribution via those tasked with wrapping up the airline’s affairs.
Union leaders have argued that workers would be waiving their rights to other monies owed if they accept the offer but according to reports a significant number of former workers have accepted the offer thus far.