IN a report in the Antigua OBSERVER, Prime Minister Dr. Kenny D. Anthony is quoted as commenting on the plans by regional airline LIAT, to streamline operations to cut costs and become more efficient as follows:
“The changes do provide a basis for optimism. I think some courage is finally being applied to deal with the situation with LIAT. Obviously it is not going to be easy for the government and people of Antigua, but they have to understand that governments cannot continue to pump money year after year into LIAT, despite the carrier’s losses. Caribbean people need LIAT badly’
There is a striking similarity with these comments and the position espoused in the past by the now Political Leader and former Minister of Tourism and Civil Aviation, Mr. Allen Chastanet, who has been heavily criticized in the past for saying that no money should be pumped into LIAT until there was a commitment to do the very things that are now being done, which our Prime Minister has also described as ‘dramatic action’
In 2011 when he was Minister of Tourism and Civil Aviation, Chastanent drew the ire of his counterpart from Antigua when he called for a major overhaul of LIAT’s Board of Directors and for a change in the way the airline conducted business. Minister Maginley’s comments were in essence saying to him to ‘mind your damn business’. Whether the present decisions of LIAT are vindication of Chastanet, I will leave that for history to decide.
In my activities as a civil engineer, I have travelled the Caribbean, having lived for periods in three other Caribbean states. Over the last 18 years, I probably would have flown over half a million miles on LIAT. I have seen and experienced every possibility on a LIAT flight, from being delayed for hours, to cancelled flights, to seeing an engine stall while in the air, to stuck landing gears. Yet despite all these experiences, there is an intense desire within me to see LIAT succeed. Caribbean people need LIAT badly.
Part of the problem with LIAT is that it has been used by various government shareholders as a vehicle to prop their economies and to pay for their airport infrastructure. In that regard the model should be that the OECS and Barbados should have equal shareholding in LIAT, thus removing the external influence of shareholder governments.
While I agree with these changes at LIAT, I also must say that St Lucia also has a responsibility to contribute to the continuance of LIAT. It is unfair that the burden should fall predominantly on Antigua, Barbados and St Vincent and to a lesser extent Dominica. Therefore, the first process of transformation is the reorganization of the share issue. New shares should be issued to bring all the member governments into equal shareholders. If governments do not have all the cash to inject then this should in part be worked out in landing fees and other charges for a period of three years.
The next step should be the reorganization of the routes. A partnership arrangement should be worked out with Caribbean Airlines on the Trinidad to St Lucia route, with LIAT removing itself from this route.
The process of change has started and one would hope that the push back from Antigua would not allow a caving in by the Board of Directors. The integration of the Caribbean was achieved in the colonial period by there being no requirement for passports to move from one island to another, and also the sea transportation systems that existed. I do not believe a ferry system is the answer, it may be part of the solution in the integration process, but the air transportation matter must capture the attention of our leaders.
It can take one 12 hours to travel from Tortola to St Lucia. This journey will have you landing in St Maarteen, St Kitts and Antigua before you reach to St Lucia. It cannot be right that the cost to travel from Trinidad to New York is cheaper than from Trinidad to St Lucia. We have dismissed the importance of the regional traveler and concentrated solely on those from outside the region. Can the decisions of LIAT be the beginning of new things in air transportation win the region.? I echo the words of our Prime Minister – Caribbean needs LIAT badly.
Sir…
I direct your attention to a record of almost ten years of errors and omissions at LIAT, on the Caribbean Regional Aviation Network, here…
http://www.craneforum.org/viewforum.php?f=89
There are so many reasons why LIAT should not work, and the leading reason is political interference.
Political interference is directly responsible for the second leading reason why LIAT should not work, and that is incompetence.
By this I do not refer to the blundering, ridiculous, inept babbling idiot (though LIAT does have, and has had, a few of those in its managerial ranks), but I do refer to those who are, and always have been, NOT COMPETENT in the role they were appointed to at LIAT for political reasons, even though they may well be very competent in other, different, areas.
Incompetence is directly responsible for financial losses.
Professionals in a highly technical arena such as an airline do not play around when it comes to the slim profit margins in this industry, they milk the technology for every penny they can earn or save. “Trying a thing” – as the new CEO at LIAT is STILL doing now – is better left to those betting on horses or throwing dice in a casino. And of course the results are the same – win or lose, big time. Except – as in gambling – amateurs “trying a thing” in aviation usually lose… big time.
Here is a “thing” the shareholders can “try” – declare a reasonable date at which the airline will be shut down – say, 31 July, 2017 – and in the intervening two years allow and encourage private enterprise to put another airline (or airlines) together to replace LIAT’s services.
Governments, no matter what the intention, should not be in the airline business – indeed, no government should be in ANY business – and they should find a way to stop bleeding the various national treasuries of the hundreds of millions of dollars LIAT sucks into its bottomless pit every year.
Governments should not be in business for the simple reason that politicians corrupt the business process with political interference and through exchange of favours (or cash) install unqualified political appointees who have no right controlling that industry, and then they use taxpayer money to prop up the losing concerns – which could not possibly continue to exist without those subsidies.
This is true of LIAT, it is true of Caribbean Airlines, it is true of BahamasAir, it is true of Cayman Airways, it was true of Air Jamaica, and I am quite sure it is true of just about every other government-owned and -controlled airline in the Caribbean.
Having a LIAT to provide inter-Caribbean services is a nice thought. But over the decades a succession of politicians and bureaucrats have made damned sure it cannot survive without scads of taxpayer assistance.
If the shareholders of LIAT cannot, or will not, install a large measure of qualified and experienced aviation competence into the airline – including the Board and down through middle management – then I urge them to install a plan to terminate its very existence and let the private sector replace its services (a process which has in fact already started, whether the shareholders like it or not).
Good form , Mr Lynch.
Bold , on point, concise, and with adequately cited references to boot!
Your bold solution is a viable initiative that speaks to the efficiency and profitability of the airline.
May I caution that government has a necessary role in infrastructure and other ancillary support systems e.g., trade fairs, treaties, negotiating with international governments for favorable terms in the procurement of materials (Brazil’s aviation industry is a prime candidate for new or tailor made specifications on new craft), tariff and other beneficial tax abatement enticements. .
Yes, gov in a supporting role, instead of, (as your response clearly states), RUNNING INTERFERENCE IN THE DIRECT MANAGEMENT (TECH, HUMAN RESOURCES AND FINANCE) of a regional airline entity.
Tallyho
I have proposed other solutions to the shareholders (direct, some in public, some in private) but all have been ignored. Some concerned LIAT alone, one concerned commercial aviation in general aceross the Caribbean.
Our Prime Ministers have become famous for ignoring their constituents unless election time approaches, and being “experts” in every possible field of endeavour.
If we continue down this avenue of enforced insitutional ignorance, I have no doubt there will come a day when the doors of LIAT across the network are chained by the bailiffs and the airline will grind to a halt – with none of the employees prepared for it. Once upon a time the governments could afford to keep pouring cash into LIAT, but with today’s approaching government bakruptcies – especially of all of LIAT’s major shareholders – those days are now gone.
. . . . “Those who will not listen will feel.” ~ Caribbean proverb
The real problem is that Liat has 11 aircraft and more than 600 employees. Ridiculous. Let it go bankrupt and sell the planes and spareparts to COPA airlines from Panama. A fresh start with an adequate number of employees. COPA is proportionally per passenger the most profitable airline of the world. They fly already to 14 destinations in the Caribbean. I fully agree with the last phrases of the article.
Sorry, Robert, out of my experience I have to disagree with one aspect of that final section, and that is of Caribbean Airlines being asked to take over LIAT’s routes.
Caribbean Airlines – indeed the attitude of T&T – has, IN PUBLIC, been that if they do so they will operate whatever inter-island sectors they deem profitable and drop the rest, and that is not what LIAT’s existence is about.
Indeed, CAL’s recent track record with the Air Jamaica take-over was to cherry-pick the profitable routes, drop the rest – and then for some strange reason run those profitable routes into the ground until they were a huge burden and then drop them too. Now the T&T taxpayer is calling for the termination of CAL’s Jamaican venture altogether.
CAL has had several newe Boards, new CEOs, new this, new that, and keep promising things will improve. The US DoT even threatened to withdraw their access to US routes if they continued the fuel subsidy, that was replaced with an “infrastruicture grant”, yet after all the changes and “improvements” they are STILL losing money. These are the people to replace LIAT’s services? Which is the frying pan, and which the fire? Which is more incompetent, LIAT or CAL?
Under pressure the Trinidad government will abandon the rest of us at a moment’s notice – as they did certain islands with BWIA when they found they were not making enough money. I saw that with my own eyes one morning in St. Lucia, BWIA had decided to abandon the schedule the night before, and only the country manager was told – both staff and passengers were left standing outside the locked airport counters for half a day without the minimal courtesy of such basic information.
I also remember from way back BWIA flights filling up in Trinidad and overflying both Barbados and Antigua without notifying anyone… the passengers would hear a plane flying over and from the car park watch thyeir confirmed full fare Economy Class or First Class seats flying overhead enroute to New York or Toronto with somebody else sitting in them.
Whether Trinidadians like my saying so or not, without being prejudiced I can say from observation alone that they as a people are the most arrogant, swaggering – and among the most incompetent business managers – in the eastern Caribbean. They believe they are better than any others in the EC, they refuse to honour their committments to all the various regional Treaties and Agreements they have signed, and I cannot see any future to have CAL replace LIAT’s services except that it will end in disaster for us – we who they call “the small islands”.
So I stand by my suggestion… set a date, close it down, and encourage EC private enterprise and entrepreneurs to replace it. But stop draining the EC shareholder country coffers of hundreds of millions of taxpayers’ dollars a year to prop up an entity that the governments REF– USE to run properly just so that a few highly favoured (but incompetent) individuals can enjoy privilege and prestige in exchange for past political favours provided.
Thanks James for the historical information. The small islands need a strong private partner to set up a new airline. I still think Copa might be a healty solution. I lived 12 years in St. lucia and live in the highlands of Panama. A thriving economy and just 4.3% unemployment.
Understood, Robert, but I have to point out that COPA is sticking to what it knows, doing it well, and making a profit. That is, they are serving their LatAm market with a specific aircaft and a specific capacity over specific distances – and so remain 100% inside their “sweet spot” of economics and profit.
Even if COPA agreed to take on the sub-region, there is no guarantee that they can transfer those skills and economics of a measured-pace medium-haul jet operation to a quick-trot island-hopping turboprop network like LIAT’s.
In my opinion, I have to agree with others I have spoken to on LIAT in that the airline really nees to be closed down and a new airline started with a clean slate. In 57 years LIAT has accumulated contractual obligations – agreed to by the mismanagement of incompetent executives – which cannot simply be reversed.
It is not the unions sucking money out of the airline, on the contrary it has been the management unable to capably negotiate agreements where the employees are able to get much of what they want without breaking LIAT’s bank.
For instance, during negotiations easier conditions of work can be exchanged for some salary increases. And of course the airline can offer to pay for benefits and advantages for the employees – health insurance, life insurance, bulk buying, etc. – which would cost (the airline) very little but are worth much more – ten times or more – to the employee.
Another for instance, the LIAT employees – like airline employees everywhere – get “rebated travel” – subject-to-load travel at a discount – on both LIAT and other carriers. But LIAT spends almost no time improving or updating this benefit, and in fact such travel has become completely worthless to employees (and to retirees) because it has become cheaper to buy a discounted ticket – with a fully reserved and guaranteed seat – from a travel agency than to spend three months fiddling around with LIAT HR to get their employee discount – and still face the possibility of being bumoped off the flight when they get to the airport.
You read it right, LIAT employees pay LESS for a reserved seat through a travel agency and MORE for their “employee discount” stand-by subject-to-load travel.
But salaries at LIAT – which are in fact low compared to global averages – are the least of the airline’s financial troubles… I am 90% sure that past executives who negotiated aircraft leases, for instance, are still getting “commissions” from the lessors despite the fact that they left LIAT decades ago.
One of those ex-pat CEOs, for instance, insisted on negotiating the aircraft leases by himself, and did so offshore. Nobody at LIAT has any idea what other “arrangements” were really concluded behind closed doors, but a year after the aircraft arrived and the lease rates were disclosed we were startled to discover that the lease rates were among the highest being paid in the world for those aircraft.
Well, SOMEbody had to pay for the “extras” – and that would have been us, the taxpayers, employees and passengers.
Of course, there is no way I can prove it one way or another, but it certainly does seem a little fishy that former CEO Brunton pretty much forced the ATRs onto both Caribbean Airlines and LIAT. Caribbean Airlines would have been easy (warehouses full of money by the oilfields), and LIAT would have been a pushover through a Board which did not individuially or collectively have a speck of a clue – he just had to be a slick salesman and baffle them with the BS and presentations, and he had an instant fleet change.
Once upon a time, back in the day (after 1974), LIAT had an agreement with the former ex-pat British pilot-owned company that every stick of supplies ordered by LIAT went through them – for the commission. It went so far that cans of aircraft oil would be shipped all the way from the UK instead of being bought at half the price in St. Croix and loaded onto the daily LIAT Avro.
Even during the time I was there, a Dash-8 engine was shipped on Air Canada direct to Antigua – and put right back on the aircraft and sent back to Canada, because the agreement was that everything shipped to LIAT must come through the distribution company in Miami. As a result, that Dash-8 was grounded for another six days while they sorted it all out and re-shipped the ebgine through Miami.
You may begin to understand that there are scores of little bleeds and streams all over LIAT which enrich certain people, and have been enriching them for decades – at everybody else’s expense. You may also begin to understand why people who know what is going on, such as I, are clamouring for a shutdown and a new start… it is the ONLY way to really, truly, properly and fully rid this regional airline of ALL of the parasites and leeches which have been sucking its blood for at leasst 35 years.
Here is the suggestion I made in early 2006 – and had made on another Caribbean aviation fiorum (now closed, which the CRANe replaced) a few years before that.
I communicated these ideas directly to the Prime Ministers of the day, but did not receive a reply or acknowledghement from a single one of them.
In Caribbean politics these days, everybody is an expert at everything, and NOBODY listens or consults. If they cannot own the idea (such as steal it for themselves), they won’t have anything to do with it.
ARROGANCE and INCOMPETENCE at the highest levels are dragging this sub-region down into poverty and chaos.
http://www.craneforum.org/viewtopic.php?t=3122
James thanks for your clear information. Arrogance and incompetence. Yes that is the illness.
After having lived from 2003 (my wife and I enjoyed it) till December 2014 in St. Lucia, we decided to emigrate to Boquete in Panama. The Valley of the internal spring and rainbows.
What a difference. Almost everything about 30-40% less expensive. Unemployment in Panama is 4.3%. Mostly happy people. I worked 3 years in Nigeria and 14 years in Spain.
travelled for business to many countries in the Americas, Africa, Middle-and Far East. It is sad to see too many Lucians not making ends meet to have a decent basic life. St. Lucia has too many civil servants and red tape. It is almost like Liat. Another huge problem is the lack of foreign exchange in the EC islands. Currency restrictions might come soon and a devaluation would be the worst.
Jim / Robert,
COPA have been approached regarding possible interest in LIAT by some wise heads, not the LIAT board . They declined.
I doubt COPA would be interested, since they are already doing what they know best. To try saving and running what is already a disaster would be an exercise in money wasting and futility. COPA’s operation is medium-range jets, not island-hopping puddle-jumpers, and I cannot see them wanting to have anything to do with the nonsense that passes for management at LIAT or dealing with the interfering “expert’ politicians and their devil-spawn political appointees.
The LIAT unions will never retreat from their current contracts, and the legally required Severance Pay to all the incompetent managers and employees laid off would make any fortune they bring disappear in a moment.
I also seriously doubt two things: First, that any serious investor would give LIAT a second glance, and second, that the shareholder Prime MInisters will let go of LIAT at any price – if you could actually get any kind of decision out of PM Stuart of Barbados, that is.
Yes, I am negative about LIAT where years ago I would have been positive and hopeful. The change has been brought about in the last few years where stupidity has been piled on top of incompetence, and hundreds of millions of hard-earned taxpayer dollars have been thrown away for the sake of arrogance and ignorance.
Did you know that Caribbean Airlines is now considering selling the troublesome ATRs and buying Dash-8s again? Maybe Captain Brunton can come and make another presentation to the Board in favour of the Dash-8s. Hey, only another US$200 million, cheap, cheap, cheap…
The operative words about LIAT are incompetence and arrogance. When the shareholders get serious and hand the airline to an aviation-qualified Board, and then the new Board replaces the unqualified management, only then MIGHT the airline take the first step towards recovery. Until then – as far as I am concerned, anyway – LIAT is slipping steadily into the grave.
I made a serious proposal elsewhere. Let the shareholders announce that LIAT will be closed in 2 years time – say, 31 July, 2017 – and then encourage and permit entrepreneurs and existing airlines to create a replacement and/or replacements.
I seriously believe this is better than the alternative – employees and passengers across the entire network arriving early one morning and finding the doors and gates chained and padlocked by the bailiffs – because no creditor will wait forever for their money, and LIAT is again building a horriffic debt load (including to the employees).