Regional: ‘LIAT will honour debt, now $100m’

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(Barbados Today) – The chairman of the shareholder governments of the regional airline, LIAT, Prime Minister Dr Ralph Gonsalves Monday sought to assure employees that payment of outstanding salaries and arrears “will be urgently addressed”.

The Antigua-based financially strapped regional airline owes its staff an estimated $70 million (EC$94 million) in severance and holiday payment, which it is unable to pay.

Gonsalves in a letter addressed to staff members said that LIAT has been challenged as a consequence of the coronavirus (COVID-19) pandemic and that the “financial state of the company has been reviewed and LIAT is unable to pay its debt”.

Last weekend the major shareholder governments – Antigua and Barbuda, Dominica, Barbados and St Vincent and the Grenadines, decided to liquidate the airline, which has had on-going financial woes.

Gonsalves said a report from the board of directors and the management on the critical financial position of the airline “particularly on the issue concerning winding up or liquidation and taking the decision for a general meeting of all the ordinary shareholders of the company to consider a resolution for the winding-up, dissolution of the company”.

He said LIAT was having problems since 2017, but the hurricanes that year put the airline “in a tailspin and into 2018”.

In his June 29 letter to staff, Gonsalves said the major shareholders have made every effort to support the airline “however with the current pandemic affecting all sectors of national economies, the major shareholders are unable to give LIAT needed support.

“Both the Board of Directors and the major shareholders agree that the airline cannot survive this crisis. A general meeting of all the ordinary shareholders and creditors will be called for the purpose of considering the closure of the airline.

“A most important priority of the airline is the welfare of the staff. The payment of your outstanding salaries and severance will be urgently addressed in this process,’ Gonsalves wrote, adding: “The shareholders understand that this information is disappointing and an unfortunate result of the circumstances but will ensure that the process fairly and justly undertaken.”

LIAT, which operates 491 weekly flights to 15 destinations from Puerto Rico in the north to Guyana in the south, has suspended its operations until July 15 as a result of the COVID-19 pandemic.

The trade unions which represent the LIAT workers have not yet made any statement regarding the new developments involving the airline.

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