Despite reports of a hopeful cash injection by Virgin boss Richard Branson, it seems that LIAT are still high and dry. Prime Minister of St. Vincent and the Grenadines, Dr. Ralph Gonsalves, has said that “nobody has contacted me about that”, claiming no such offer has been received.
Previously it had been reported that Branson was ready to invest as much as $7m in the airline. In fact, the chief of staff in the Antigua and Barbuda government, Lionel Hurst, had gone so far as to say that Branson planned to ‘wet lease several aircraft’ and to start flying from Fort Lauderdale as part of his expansion plans for the airline.
But it seems today that no such interest has actually been received. As reported by CH-Aviation, Gonsalves told his local radio station, WE FM, that no such bid had been received, saying that,
“As the chairman of the shareholders, I have not been made aware of that, nobody has contacted me about that. Whether Branson said so in an off-hand way or in a serious manner, I don’t know. I don’t usually jump like that when rich people make a suggestion until I see something really meaningful,”
Why the confusion?
The crossed lines of communication are nothing new for LIAT. The airline is jointly owned between Barbados, Antigua and Barbuda and St. Vincent and the Grenadines along with Dominica, with the four governments owning 94.7% of the shares. The remaining 5.3% is owned by other Caribbean governments as well as private shareholders and employees.
With so many fingers in the shareholder pie, it’s hardly surprising that things are not always straightforward for the carrier.
As well as potential Chinese whisper issues between the shareholders, there are also conflicting opinions to consider. While some governments are keen to support the airline and, indeed, to give it the $5.4m cash injection it needs to continue flying, others would prefer to see it scrapped.
While St Kitts and Nevis government has said it would provide EC$1 million ($370,000 USD) of emergency funding to the airline, and Grenada also pumped approximately the same amount into the airline. However, other governments such as St. Lucia have said they won’t invest more unless the airline is fundamentally changed.
What will become of LIAT?
Clearly, if LIAT is to survive, it needs a cash injection and fast. But what it needs to succeed is clear governance and a stripping back of the current complexities of management. This could be closer than we think.
According to Dominica News, Antigua and Barbuda’s government has made a bid to buy out the Barbados’ share of the airline. Prime Minister Gaston Brown commented to the reporter:
“We are looking towards the sustainability and viability of LIAT. We now have to await a response from Barbados and then we will develop an action plan on the way forward,”
If their bid is accepted, it would take their share of the airline from the current level of 34% up to a controlling share of 81%. This would give them far more control over the future of LIAT and could provide much needed simplification of governance.
In the meantime, the airline continues to lobby the Caribbean governments to supply much needed emergency funds, and has even applied to the European Investment Bank for emergency funds.
LIAT operate five ATR72-600s and five ATR42-600s, making 491 flights a week to 15 destinations according to CH-Aviation. They are seen as a lifeline for those living on the islands, and a collapse would be disastrous both for local economies and tourism.