LIAT split Regional leaders trade punches over carrier’s future


St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves Wednesday publicly disagreed with his Grenadian counterpart Dr Keith Mitchell on the way forward for regional carrier LIAT, while calling for more investment on the part of Caribbean Community (CARICOM) governments in the Antigua-based carrier in which Barbados is the majority shareholder.

Speaking at the ceremonial opening of the 38th CARICOM Heads of Government Summit in Grenada on Tuesday night, host prime minister Mitchell, the incoming CARICOM chairman, noted that transportation remains the lifeblood of the regional integration process.

However, he said weak domestic and intra-regional air travel, along with low service competition and high travel costs had all contributed to the reality that Caribbean nationals could more easily connect to destinations outside, than within, the region.

In that context, the Grenadian leader said it would represent a significant installment to the “regional integration account” if regional leaders were to collectively agree to reduce airline ticket taxes, as well as other fees attached to the cost of intra-regional air travel.

“Further, I have long held the belief that political presence on the board of airlines, such as LIAT, is not helpful to its proper management and efficiency,” Mitchell said, adding that “LIAT’s sustainability would have benefited if it was run more as a private sector company.

“Governments could then subsidize flights to given destinations or routes that are in the best interest of their respective countries,” he told the regional gathering, which included representatives of the shareholder governments of Antigua and Barbuda, Barbados, Dominica and St Vincent and the Grenadines.

Mitchell also questioned: “How could LIAT thrive when, for example, a few months ago, literally overnight, LIAT cancelled one of its most lucrative routes to and from Grenada, without any consultation with the citizens or leadership of Grenada?”

While suggesting that the decision was “all based on politics”, the Grenadian leader told his CARICOM colleagues, “We have to do better as a region.”

Dr. Keith Mitchell Prime Minister of Grenada

However, Gonsalves, who is chairman of the LIAT shareholder governments, told the Caribbean Media Corporation (CMC) he was disappointed with Mitchell’s statement.

“I think Prime Minister Mitchell’s speech last night was unfortunate,” Gonsalves said.

“Of course we disagree on LIAT, but to say that the decisions which are made in relation to LIAT at the board level are political, he just doesn’t get,” he added.

Gonsalves pointed out that the LIAT board was headed by distinguished Caribbean national Dr Jean Holder of Barbados, asking, “anybody thinks of Jean as being some kind of political person?”

The Vincentian leader further pointed out banker Isaac Solomon, who heads RBTT in the sub-region, was also a member of the carrier’s board.

“This is a distinguished professional,” Gonsalves stressed, in further brushing aside Mitchell’s concerns.

“It is sophistry for my friend Keith to say that if it is owned by the private sector that he will put money in. What is the difference between the private sector and the public sector? We have asked for other governments to come aboard LIAT

“It is one thing to sit on the sidelines and criticize it [LIAT]. It is another to put your money where your mouth is,” he insisted.

He reminded that back in 2001, LIAT had put out a $40 million rights issue to get capital but that only his government had put up EC$2.9 million (one EC dollar = US$0.37 cents), with no private sector investment made.

“At that time a lot of them were dancing with [the disgraced Texan billionaire Allen] Stanford and I held the position that we have to invest in LIAT.

“I went to the parliament of my country and said: ‘We are investing in an airline that for all practical purposes was insolvent,’ but if LIAT did not exist we would have had to invent it,” Gonsalves told CMC, adding “we have done tremendous reforms with LIAT”.

He also pointed out that St Vincent and the Grenadines currently receives 42 LIAT flights a week compared to at least 39 to Grenada “and we put a lot of money in it.

“So I don’t agree with my friend Keith in his critique of LIAT and I have to say he has put the issue in the public and I have to respond. He is my friend and I hope this matter is resolved.

“If you attack LIAT unjustifiably, I will stand up and defend LIAT. LIAT has a lot of flaws, a lot of limitations, but I would like to invite him while I am on Grenadian soil to put some money in LIAT, or, either become an equity partner or you want additional routes, negotiate it with LIAT and say, ‘this is the market support for additional routes’ rather than this kind of unfounded critique of LIAT.

Ralph Gonsalves

“He knows my position on this and he will not be surprised at my stance on this,” Gonsalves said.

In a separate statement, Antigua and Barbuda’s Prime Minister Gaston Browne also weighed in on the LIAT issue, saying that the policy should be “based on shared burden and shared benefit.

“LIAT needs more planes, it needs more pilots, the staff need an increase, the airline is struggling to pay its debts. In fact it takes cash. To operate an airline is not cheap talk, not political grandstanding and those who do not contribute to LIAT, its operations and viability have no moral authority to demand increased airlift from LIAT,” Browne said in response to Mitchell.

Gaston Browne

“The rationale is simple you contribute and then you can make your demands. There are no free lunches,” he said.

After the leaving the summit last night for Antigua, Browne also delivered a nasty bouncer at Mitchell saying “the irony is that one prime minister is trying to engage me in the affairs of the West Indies Cricket Board, but on the other hand he has refused to cooperate in ensuring the viability of LIAT or to contribute to the viability of LIAT”.