Thursday, August 25, 2011

LIAT route cuts still on the table

BRIDGETOWN, Barbados, August 24, 2011 – As LIAT shareholders consider the future of the regional carrier, the company is still contemplating whether or not it should drop unprofitable routes, an option that has been considered for some time now.

LIAT Chairman Dr. Jean Holder, speaking after meeting with the airline’s three major shareholder Prime Ministers – Freundel Stuart of Barbados, Baldwin Spencer of Antigua and Barbuda, and Dr. Ralph Gonsalves of St. Vincent and the Grenadines – along with other members of the Board of Directors and management this week, announced a planned review of certain routes now served by the carrier.

He said the Antigua-based airline could be forced to pull off routes which are not profitable unless the governments or other stakeholders in those countries provided revenue and/or marketing support as was often done for a number of international carriers. 

Dr. Gonsalves, speaking to reporters after the meeting, added that LIAT had been placed at a disadvantage as it tries to compete with other airlines and if Caribbean governments don’t help to fund the carrier, “we will just cut them”.

“You can’t be subsidizing or paying for other airlines to come into your space and your country and you just treat LIAT as just a floor mat and you take it for granted,” he said.

A statement issued by LIAT said that during the meeting shareholders reviewed the present competitive situation involving air transport in the region and it was noted LIAT had seen some reduction in its loads to a number of destinations particularly in its critical southern network. 

“The issue of fuel subsidies to airlines and the adverse competitive impact which this had on LIAT and other carriers were also discussed and the possibility raised for having these matters resolved within the context of the CARICOM single market framework,” the statement said.

Shareholders noted the continuing financial difficulties facing the company, including continuing high oil prices and continuing weaknesses in the regional and international economy. 

“An all embracing Recovery Plan, developed by management and which targets both revenue and cost components of the business, was endorsed by the shareholders,” the press release noted.

LIAT has also reiterated the importance of the company’s re-fleeting efforts as a critical element of its programme to improve efficiency of its services and to enhance its competitive position in the marketplace.  

A programme of action is expected to be presented shortly to Prime Ministers of the shareholder governments, outlining the possible time-lines and scenarios for introduction of new aircraft into the company’s fleet.

The next quarterly meeting of the shareholders is expected to take place before the end of the year.

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