It was certainly good news at yesterday’s post-Cabinet press conference – that the embattled LIAT (1974) Ltd will be taking to the once-friendly skies next month. Seems, as our Prime Minister (PM) had predicted back in July of this year, LIAT will “rise like a Phoenix from the ashes” of mismanagement, wastage and greed. Of course, if LIAT does in fact “mount up with wings as an eagle” in November, it will be a few weeks shy of his optimistic prediction that LIAT would be back in all of 90 days. But who’s quibbling?
As you can imagine, we were concerned that, notwithstanding all the huffing and puffing by our PM, LIAT would remain grounded, destined never to fly again. Many were beginning to pen LIAT’s epitaph. And not without reason. After all, it had been many weeks since the public had heard any news coming from Mr Cleveland Seaforth, he of the accounting firm, BDO, who was appointed as the LIAT Administrator in late July. If you recall, we’d heard from him that August 15,2020 was the cut-off date for the submission of claims against LIAT, and we’d also heard that June and July salaries for LIAT workers had been paid. Our government, was doling out the lion’s share of those monies, what with the majority of LIAT employees. Said our PM in August, “We have advanced US1M so far to pay all LIAT workers right throughout the system for July.” Grenada had committed itself to paying the May to July salaries of the Grenada-based employees.
Thereafter followed an eerie silence, and we hoped that the dearth of reports from LIAT was a sign that the devilish details of putting her back in the air were being worked out behind the scenes. With his detailed 23-page plan for the revival of LIAT dated July 13, 2020, our PM seemed driven – a man on a mission, never mind the nay-sayers and the manifestly disinterested like the Honourable Mia Mottley of Barbados and Dr Ralph Gonsalves of St Vincent and the Grenadines. The four planks of that plan were, “To preserve shareholder value, protect the airline, enhance regional integration, and continue to serve the people of the Caribbean Community.” All laudable goals, and we support him. In fact, we have been quite impressed by the detailed and viable ideas put forth in his plan. As well it had to be. If you recall, the good doctor from St. Vincent had darkly warned our PM that his restructuring plan had better be a serious and feasible one. It was. Or rather, it is.
Our PM is persuaded that by its second year of operation as a new entity, LIAT could return a tidy profit of about $12M. He made the case that “As far as practicable, the private sector should be encouraged to participate in the recapitalisation and directorship of LIAT. Private sector ownership and participation would bring a greater focus on commercial operations of LIAT and profitability.” [LIAT: Rising like a Phoenix, p17] Yes, governments, not only here in the region, but around the world, just cannot seem to run anything profitably. They will run the business into the ground and then turn to the tax-payers for bailouts. A pox on government mismanagement! Of course, the case has often been made that government involvement in running an entity often has more to do with social responsibility, political calculus and other priorities far removed from turning a profit. We are pleased at the invitation to the private sector to run the damn thing.
Naturally, we have been wondering as to the identity of those willing to become major shareholders in a new LIAT. We have not heard anything, and we can only chalk it up to the possibility that those investors are seeking anonymity. People with money sometimes prefer to remain out of the spotlight. Based on the report yesterday from the Minister of Information, Melford Nicholas, only some operational kinks remain to be straightened out, and LIAT will be resurrected. Funding seems to be no object. Remember, according to our PM, LIAT will need about $108M before it can take to the skies. Of that, our government will be upping $54M. The rest of the funding will be from private and public sector sources. We are not sure if any of the regional governments will be a part of this effort.
Consider how dismissive they were of any talk of restructuring LIAT. Indeed, they were quite hasty in dancing on LIAT’s grave, performing the last rites and fraternising with other carriers to fill the void, even before the corpse was cold. It was quite disheartening. Talk about every man to himself! It really gave rise to the feeling among some that the cause of regionalism was not being served. PM Mottley blew-off an important LIAT meeting because she had other supposedly more substantive things to do. Sigh! Our PM summed it up quite nicely when he suggested in the aforementioned restructuring plan: “In light of the more viable reorganisational option, the forced liquidation of LIAT against the wishes of some stakeholders, to facilitate parochial interests, may be construed as an act of malevolence, that could undermine Caribbean unity and the integration movement.” [LIAT: Rising like a Phoenix, p17]
Noteworthily, our PM also sounded a note of warning to those shareholder governments that seemed so very anxious to perform the LIAT funeral, leaving workers, creditors, everybody, in the lurch. There was flippant talk on their part that they would make ‘compassionate payments‘ out of the goodness of their hearts only to their resident employees of LIAT, and that they really were not under any other obligation. Ha! Not so fast, pardner! According to our PM, “The undertakings given to creditors, as documented in the financial statements, may well create a contingent liability that has legal ramifications.” [LIAT: Rising like a Phoenix, p5] Oh, oh! So much for just walking away. Credit was extended to LIAT, “a known insolvent company” on the strength of the full faith and backing of the shareholder governments. Yes, government money and government backing is supposed to be good.
We stand four-square behind the rebirth of LIAT. We believe that it will further the cause of integration by way of easy movement of people and goods in the region. It will also heighten that sense of kinship and cooperation. With the removal of all the exorbitant fees and other artificial burdens that were placed on LIAT, we believe that costs will go down, especially since there will be a healthy competition for passengers. Moreover, because of Covid-19, and the increasing reliance on high tech communications platforms like ZOOM, there will be less demand for travel. This too will result in lower costs.
All hail the reincarnation of LIAT! It was 46 years ago that she was saved from the undertaker by our visionary Premier George Walter. The same year, mind you, of the great earthquake of October 8, and only months into the Arab oil embargo that resulted in rationing and skyrocketing fuel and food prices. Folks, we it back then. We believe that it can be done now.
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