Improving the fortunes of LIAT will be a tall order

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With all the pleasantries and the compliments having been showered on Owen Arthur, the former Barbados Prime Minister, on his elevation to the Chairmanship of LIAT, and the kudos given to Dr. Jean Holder, who served in that position, it is now down to basics for work to begin on improving the fortunes of the regional airline, if it has not started already.

Arthur received loads of support and compliments and so did Dr. Jean Holder, who served with distinction. All of that is now history as we look to see what can be done in terms of improvements for the island-hopping carrier.

Up front it won’t be easy and will be a tall order to bring about the improvements, which are very necessary for Arthur and his team of board members, comprising some private sector representatives, in effecting the transformation of LIAT.

Along with Caribbean Airlines, they both provide useful air transport services to the destinations they are serving in the Caribbean. Unlike other carriers which operate from international destinations to this region, LIAT does not enjoy that luxury and so the Board has to make the Caribbean market work for LIAT.

Coming also at a time when airlines globally have to confront the dreaded Coronavirus, which can have a negative impact on air travel, the issue for LIAT going forward will not be easy.

As a business, LIAT has to grow its revenue and profitability and must be positioned to have a very sustainable future and operations.

The onus therefore is to boost revenue and to cut costs, and to impress on Caribbean governments that they need to lower the taxes, which are levied on airline tickets. It will also be necessary to make it attractive for other shareholder governments across the Caribbean, to come on board.

There is a view that if the taxes are lowered or removed from the travel tickets, this would be a boost to regional travel including business travel.

Given the financial straightjacket some governments are in when it comes to revenue-raising measures, Arthur will know what is possible from what is not re those taxes. The airline also has to be restructured and there is no getting away from this, however much it can proved to be painful for some governments.

When he spoke at the news conference hosted by the Caribbean Development Bank (CDB) some weeks ago, the President Dr. Warren Smith had high hopes for LIAT with Arthur at the helm. The President believes that Arthur, having served for 15 years as Prime Minister of Barbados, will do a good job.

Dr. Smith had told members of the media that his expectation is that there will be some progress, noting that the role LIAT plays in the regional transportation business is vital to Caribbean economies.

It would be recalled that twice LIAT would have come face to face with new competition players in Carib Express and REDjet.

The operators of those two had seen something of an opening in the regional airlines transportation market and took the opportunity to take on LIAT (and BWIA – now Caribbean Airlines).

Eventually however, for one reason or another, they did not last that long and as the story went LIAT was able to continue.

It is therefore within our power to improve LIAT for the benefit of Caribbean people. (The Barbados Advocate)

1 COMMENT

  1. Re: [Editorial] High Hopes For LIAT
    Post by bimjim » Wed Mar 11, 2020 15:52:48

    To the Editor…

    All that has happened at LIAT in the last year is that there has been a musical chairs at Board level, a do-nothing politician who has no clue about aviation has replaced a do-nothing political appointee who (after more than a decade as Chairman) still had learned nothing about aviation, there is still the power-mad, ignorant rapist Prime Minister as shareholder Chairman, and at the other end a hotel book keeper as CEO who has *_ZERO_* training, qualifications or experience with aviation or airlines.

    For direction, Owen Arthur plans a tour of the shareholder Prime Ministers – like the many destination tours of David Evans, at LIAT expense, of course. But, without ever having any real idea what is actually right for an airline such as LIAT (as opposed to what may be politically right), is reasonably expected to make no changes.

    LIAT’s problems are not going to be solved by political measures. LIAT’s problems are going to be solved by a person or people who have had wide-ranging experience – globally – in airlines such as LIAT, and who have seen other “models” work (and not work). Such an individual or individuals can cobble together a model which suits LIAT, suits the islands, suits the framework and network, and which turns a profit to reverse the flow of money between LIAT and the shareholder Treasuries.

    A profitable, efficient, economic LIAT will attract the involvement of other governments and, potentially, investors.

    Who needs to be removed? Gonsalves, Arthur, the entire Board, and the current incompetent CEO. In that document I have made suggestions, and while some of them may not be to the liking of certain people they all apply.

    Install a globally experienced, competent CEO, and get the hell out of the way.

    I hope you can review my email and document and make another Editorial which does not pander to the politicians or political aspects. The CDB is a political arm of the Prime Ministers and has NO power to say no to any of their requests, or – in the case of LIAT – to repossess any airplane they financed.

    Tomas Chlumecky (“Aviation Doctor”)
    International Aviation Executive, Advisor and Entrepreneur
    11 March, 2020

    REALITY CHECK: You can have a great new Business plan, BUT the problem is that LIAT does not have the executive team which can execute the plan. Show me someone with experience outside of the toxic LIAT corporate culture! Does anyone on the Board know how to create a profitable airline? NO! So there is no one there who knows what a profitable airline looks like!! THERE is your reality!

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