LIAT to axe unprofitable routes as part of financial shakeup

By Admin Wednesday March 12 2014 in Caribbean
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BRIDGETOWN: LIAT chairman Jean Holder has announced that the regional airline will take “decisive action” to deal with unprofitable routes in order to make its operations financially viable.


“We have been trying, before going the harsh route, to persuade people to invest. We have met with a number of governments and Prime Ministers…we have expressed to them that we will have no other option but to cut the service. I think we have reached the point, after a lot of challenges, where we need to do as we say that we will do.


“We’ll have to take a very hard look at our current schedules and the profitability of our current routes. We have brought in some experts to assist us in looking more deeply into the route analysis issues, but it is clear that LIAT cannot continue to provide essential social services to 21 countries in the Caribbean on a daily basis, offering close to 1,000 flights weekly, and only four countries put any funds into this operation,” said Holder following a meeting of the governments of the airline’s shareholders last week.


She said that this would involve reshaping the routing system in a way that would ensure there is no longer an abundance of social routes at the expense of commercial operations.


In October 2012, then chief executive officer of LIAT, Ian Brunton, warned that the cash-strapped airline would soon be dropping at least eight routes deemed to be consistently unprofitable.


He said that the situation would only change if the airline, whose major shareholders are Antigua & Barbuda, Barbados, Dominica and St. Vincent & the Grenadines, was able to secure some kind of support from affected governments.


Holder said that the company needs to be more professional and implement the changes needed to keep the airline on an even keel.


St. Vincent & the Grenadines Prime Minister Dr. Ralph Gonsalves, who is also chairman of shareholder governments, said he had been putting public pressure on his counterparts across the region, particularly from those countries that benefit considerably from the operations of the airline.


“We’ve not been putting the same pressure on Dr. Keith Mitchell of Grenada because I know he has just come into office…and is trying to sort himself out. We give him a break, but he too has to come to the table,” said Dr. Gonsalves.


He said that the existing contributing countries were not immune to the effects of the global economic crisis but, since 2008, had been demonstrating their commitment to the region.


“Despite the stresses and strains, we have come up with significant monies and I am sure that that is a factor which some governments, who have not put in, will bear in mind,” said Gonsalves. “But I also think that because some governments have (received) a free ride for such a long time…it’s always better for someone to have a free ride that for them to pay for the ride.”


Gonsalves said Holder and acting chief executive officer Julie Reifer-Jones had made presentations to the meeting which outlined a plan for sustainable recovery of the airline, as well as an immediate program for implementation.


LIAT said it would employ an expert to assess the unprofitable routes which would not only entail cutting, but rescheduling or reviewing them.

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