Under Julie Reifer-Jones’ leadership, LIAT is facing its worst financial crisis

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By Bert Wilkinson

Separated by large tracts of the turquoise blue waters of the Caribbean Sea, people in the tiny tourism dependent Eastern Caribbean islands rely heavily on small island-hopping commuter airlines to move around the region.

So it is no surprise that a cartel of governments in that part of the region is struggling to desperately try to keep cash-strapped Antigua-based carrier LIAT afloat.

LIAT, with nearly a dozen new fuel-efficient French-made ATR twin-engine turbine planes at its disposal, is perhaps facing its worst financial crisis after decades of linking together countries in the Caribbean as far south as Guyana to as far north as Puerto Rico and St. Croix in the U.S. Virgin Islands.

As confirmation of how bad its financial situation is, the airline at the weekend announced that a roster of pilots had agreed to take a pay cut as part of their contribution to keep the carrier afloat.

A year ago, such a request from management and its board of directors would have been given short shrift by crewmembers but Pilots Association President Carl Burke said the group had agreed to take a salary slash of just under 10 percent.

“They actually voted Thursday night on the salary cut and which has since been communicated to Prime Minister Mottley [of Barbados]. At the moment I have to make sure that she has received our communication before I could give you that information but it is less than 10 percent,” Burke said.

Shareholder governments led by prime ministers of countries that depend heavily on reliable airlift for tourism and basic travel purposes have held several emergency meetings on the issue and say the airline is still on the deathbed despite the move by the pilots.

For example, the carrier needs a quick cash injection of about $6 million to keep it afloat. Prime Minister Ralph Gonsalves of St. Vincent has warned that some of the money losing routes like Trinidad and St. Lucia could be scrubbed altogether from the destination roster as load factors are too low to continuing servicing them. Planes flying in and out of Trinidad average 38 percent loads.

To keep current routes in place, the shareholding governments have proposed a minimum revenue guarantee system that would see them coughing up cash to ensure their islands are serviced by LIAT 1974 limited. That system was used in the past with American Eagle to ensure it had continued servicing some regional destinations.

“Only Grenada has said they will come aboard to provide some emergency funding and nobody else. Everybody is saying they agree theoretically for a minimum guarantee for the routes but they have not responded positively, only Grenada alone. People don’t understand the modern period of regional aviation. I am not fed up with LIAT. I am sticking there with LIAT, but it has to be a substantially restructured LIAT and we have restructured in the past and there is no problem in principle if you have to do a small subsidy in LIAT, but clearly we alone can’t be bearing the burden,” he told WE FM radio during a recent interview.

Over the decades, several of LIAT’s privately owned rivals like Caribbean Star have disappeared from the skies once their profits dipped for any number of reasons. For leaders like Gonsalves and Mottley of Barbados, they are aware the region can ill afford to see the back of LIAT as its service has to be subsidized and could and might only be done by governments, not private business interests.