LIAT to Target More Private Investment

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Business News

Tuesday, 13 November 2012 02:30

By Carol Williams

Antigua St. John's - Regional carrier LIAT is to unveil a new business model that targets more private sector involvement.

The carrier, based in Antigua, is majority-owned by the governments of Antigua & Barbuda, Barbados and St Vincent & the Grenadines, with minor contributions from private investors and eight other regional governments.

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But with profitability still being a challenge, Chief Executive Officer of LIAT Captain Ian Brunton said more investors are needed to ensure the airline remains viable.

“It’s what we’ve started to share with certain governments and we’d be widening that very shortly. We think what we have is a good plan,” he said.

“If we get the right investment, the right assets and change the fleet it can be a very viable proposition … perhaps even profitable.”

Captain Brunton was one of the guests on The Big Issues programme on Observer Radio on Sunday for a discussion on the possibility of a multi-national airline to service the English-speaking Caribbean.

He said dwindling profit margins and merger of large airlines is sufficient proof that “these tiny airlines here cannot exist on their own.”

“We’ve got to get together. We cannot compete, we cannot have the bloodbath that has gone on in the past,” he said.

“It’s something that has to happen. When you look at what’s happening in the world, the cost of air travel with all the added security and infrastructure that aviation needs to keep safe and secure is extremely costly,” the CEO said.

He was quick to state that the plan for a single airline is not possible in the immediate future.

In the meantime, Captain Brunton said the region can “exploit all those economies of scale that we can in terms of marketing and sales, in terms of aircraft handling, passenger handling, in terms of aircraft handling …”

Aviation consultant Ian Bertrand, a former CEO of the now defunct BWIA, also believes a single regional airline is possible -- but insists on an open skies policy.

He indicated that mistakes made in the acquisition in 2010 of Air Jamaica by Trinidad & Tobago national carrier Caribbean Airlines should not be repeated, though he did not specify what those were.

The aviation expert also made a case for limited government involvement in a multi-national airline.

“Let us not have a third party decide. Let the environment encourage competition and then decide what happens,” he said.

But Ian Archer, who served as Managing Director of LIAT and Permanent Secretary in the Ministry responsible for Aviation in Barbados, advocates an entirely new structure.

“The sheer weight of keeping these existing airlines afloat, the subsidies that have to be given are going to be unsustainable in the long run,” he said.



“We cannot do without a LIAT and CAL in the region. Our tourism industries, I think, will virtually collapse. I think the economics of the situation will force us to get together, but what I would like to see is certainly not an arrangement where one airline buys the shares of another,” Archer added.

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