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March 19 2019

St. Lucia government reaffirms position on LIAT

Regional News

The St. Lucia government reiterated its position that unless there’s a fundamental change to the operating structure of the cash-strapped regional airline, LIAT, Castries would not be investing financially in the airline.

“If St. Lucia’s going to buy shares, it’s going to be buying shares into an entity that we know is free to make whatever commercial decisions must be made,” said Prime Minister Allen Chastanet.

“I don’t mind being a shareholder, going to my annual shareholder meeting, and if in fact the management is not doing a good job then you fire the management. I don’t believe governments themselves should be involved in the day-to-day operations of the airline,” he added.

The major shareholders of the Antigua-based airline are the governments of Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines.

Last week, St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves said progress had been made regarding the future direction of the regional airline, following a more than four hour meeting in Barbados.

The Barbados meeting was held against the move by the shareholders to get Caribbean countries to contribute a total of US$5.4 million in emergency funding need to keep the airline in the sky. At the same time, 11 destinations had been given until March 15, to respond to the airline’s minimal revenue guarantee (MRG) proposals.

Under and MRG model, it is likely that a few flights may be cut if the government is not prepared to fund them with a guarantee, Gonsalves said, adding that theoretically, several countries have no quarrel with the MRG.

“If a country wants a particular flight and it is not viable financially for LIAT that country pays a guarantee for its operation, just like they do for the international carriers.”

The Grenada government noting that its economy would be damaged if the airline is allowed to end its operations, has agreed to make a financial contribution to keep the airline functioning.

“It is not in our interest to see LIAT go down and we have agreed that we will contribute to a five million US dollar overhead…but it is based on certain factors,” Prime Minister Dr. Keith Mitchell said last week.

Initially it had been reported that Grenada, which has 35 LIAT departures per week, would be asked to contribute US$487,113.

But Mitchell said the proposals presented to his administration by LIAT is “based on the analysis they have done (and) what Grenada’s contribution would be.”.

The St. Kitts-Nevis government says it has appointed a high-level advisory committee to thoroughly consider a number of proposals put forward by LIAT.

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