Antigua & Barbuda PM GASTON BROWNE
Antigua & Barbuda PM GASTON BROWNE

PM angered by alleged plans to establish LIAT competitor

By Admin Wednesday April 01 2015 in Caribbean
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ST. JOHN’S: The Leeward Islands Air Transport (LIAT) has announced that it has taken note of the statements made by Prime Minister Gaston Browne regarding a rival airline as well as the need to rotate the chair of the shareholder governments of the financially strapped airline.

 

“The comments made by the Prime Minister of Antigua & Barbuda, Gaston Browne, over the weekend, have been brought to the attention of the Chairman of the Board of LIAT and the Chairman of the Shareholder Governments and these matters are currently under discussion amongst the major shareholders,” LIAT said in a statement released earlier this week.

 

Browne, speaking on a privately owned radio station last Sunday, called plans for a new airline to compete with LIAT “treason”. He also said that he would demand the resignation of the airline’s chief executive officer, David Evans, if the plans about the new carrier prove to be true.

 

“I will be calling in Mr. Evans very shortly to discuss with him exactly where that plan emanated from. He needs to tell me as the Prime Minister of this country where that plan emanated from. And if it is that he hatched that plan on his own, you can be sure that as Prime Minister of this country, as a shareholder of LIAT, that I will be asking for his resignation,” Browne told listeners of the privately owned ZDK radio station.

 

“I’m told that the proposal was discussed at a recent meeting of the Board of Directors but the proposal was actually turned down because of the strong objection of the Government of Antigua & Barbuda on the issue.

 

“If it is that Mr. Evans took it on his own to prepare that proposal for consideration by the government of Barbados, then as far as I am concerned, the proposal to cannibalize LIAT is certainly an act of treason against LIAT and obviously an act of hostility against the government and people of Antigua & Barbuda,” said Browne.

 

The document, allegedly authored by LIAT senior management, proposes that a Barbados air carrier be established with its own Air Operators Certificate (AOC) and Route Licensing Authorization.

 

The new company would effectively replace the majority of existing LIAT services throughout the region and would seek to develop new markets.

 

A methodology and structure for the establishment of the new Barbados air carrier were detailed in the document. It said a traditional approach to fleet planning in a start-up airline, with a projected requirement of 10 aircraft, would be utilized to launch initially with two to three aircraft and a limited route network. Thereafter, the carrier would build incrementally over a period of 18 months to the final fleet number.

 

The Caribbean Development Bank (CDB) has funded, via shareholder governments, LIAT’s wholly owned ATR-42 aircraft. The plan calls for the title of those aircraft to be passed on to the Government of Barbados either through shareholder agreement or through the CDB taking charge of the aircraft and reassigning them.

 

Last week, Browne, speaking on state-owned ABS television, said he hoped “common sense” would prevail.

 

“It is unfortunate that they are seeking to take that position,” he said.

 

In his interview broadcast on ZDK radio, Browne said although Antigua & Barbuda, one of the four shareholder governments of the cash-strapped airline, does not have the majority shares to effectively deal with the plans of LIAT, he would not remain silent.

 

He has called on the airline’s board of directors to step down if they are unable to turn around the fortunes of LIAT.

 

“So if it is they can’t handle the job then they ought to resign,” said Browne. “In fact my understanding is that they actually doubled or tripled the losses of LIAT.”

 

In addition to Antigua & Barbuda, the other government shareholders are Barbados, Dominica and St. Vincent & the Grenadines. Barbados is reported to have a 50 per cent ownership of the airline and Antigua & Barbuda has 30 per cent.

 

Browne also called for a change in the chairmanship of the airline. St. Vincent & the Grenadines Prime Minister, Dr. Ralph Gonsalves, is the chairman of the shareholder governments.

 

“I believe LIAT should be owned by the various governments that it serves. I also believe there should be a subvention in order to sustain LIAT, because it is well known that the very nature of the business it is likely to make losses and I am not making a point for LIAT not be to run efficiently.

 

“Even the chairmanship of LIAT, I don’t see why one prime minister should control the chairmanship of LIAT – it should be rotated. I am saying there ought to be changes at the level of the directorship, even in terms of the share holding positions of the various governments. I believe the shares of Barbados should be diluted because they believe because they have the majority shares that everything must move to Barbados,” said Browne.

 

Last month, Browne said that his administration would resist efforts to shift the base of LIAT to Bridgetown.

 

“They are literally pulling, and have pulled to some extent, the rug from under our feet over the years and we are now looking to resist any such further move,” he said.

 

Browne wrote Dr. Gonsalves in March urging a temporary halt on plans for a voluntary separation package (VSEP) that could result in more than 150 employees being removed from the company’s payroll. Browne said he urged in his letter that no further action be taken until his administration discusses the matter.

 

However, Gonsalves has since said that the plans to move LIAT were based on the financial and other realities facing the airline.

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