The government of Antigua and Barbuda is carefully considering Sir Richard Branson’s proposal of a $7m investment in the Caribbean airline LIAT. The Virgin Atlantic boss is thought to be keen to save the 63-year-old carrier from collapse. Branson is also rumoured to expect LIAT to become a profitable enterprise.
Caribbean carrier LIAT employs 667 employees. It is jointly owned by seven Caribbean governments. The governments of Barbados, Antigua & Barbuda, St. Vincent and the Grenadines and Dominica are major shareholders.
The remainder of the company is owned by other Caribbean governments, private shareholders and employees.
That Virgin Atlantic invests in LIAT is said to have been talked about during Branson’s meeting with officials last week (w/c 29/04/19).
The bail out proposal was announced publicly by government Chief of Staff, Lionel Hurst, as reported by Ken Richards of winnfm.com.
Based at V.C. Bird International Airport, Antigua, LIAT is said to be a lifeline of the 15 islands it serves. But in March of this year the Prime Minister of Trinidad and Tobago expressed his lack of confidence in the airline.
Running on empty
According to Dominica News Online, PM Rowley blames ‘uneconomic routes’ and ‘heavily subsidised loads’ for the downturn in the carrier’s fortunes. Rowley warned that if it continued to be managed as it was the carrier would ‘cease to fly’ within weeks.
Trinidad and Tobago’s government is the sole shareholder of Caribbean Airlines: LIAT’s regional competitor.
If Virgin’s offer is accepted it could re-invigorate the struggling airline and bolster profitability, according to Mr Hurst. Hurst also hinted that the airline’s coverage could be extended to include Fort Lauderdale and Jamaica.
Branson’s interest in LIAT and any subsequent investment would rely on the airline’s adding jet aircraft to its fleet. It would also have to bolster its existing fleet of ATR 72s.
The Barbadian snag
Branson, whose private Necker Island lies 20 miles north east of the British Virgin Islands, declared his interest amid a fierce debate between the governments of Antigua and Barbuda and Barbados about the downsizing of Caribbean carrier LIAT.
Spokesman Hurst told St Lucia News Online he suspected the Barbadian demand for LIAT to be scaled down is flawed by political motivation.
Should LIAT be shrunk or completely grounded, the government of Barbados could set up its own carrier. The new service would operate in the southern Caribbean.
According to St Lucia News, Hurst made clear the sentiment of his government in the face of growing pressure to take action. ‘We reject any plan that would result in LIAT either being downsized or completely collapsed,’ he said.
Hurst added that Virgin Atlantic’s investment in LIAT would greatly benefit the economy of Antigua and Barbuda.
Caribbean carrier LIAT has not always provided a faultless service. Between 2010 and 2013 the airline was wracked by labour disputes. It also received numerous complaints about poor service, delayed flights and stranded passengers.
In the last few years the reputation of the carrier has greatly improved.
In light of Branson’s interest in LIAT it seems likely that the airline will sue for investment and growth. Clearly, it hopes to continue to fly an inter-island service. Even if it must do so by bail-outs and wet-leasing.