LCC model would not be feasible for LIAT

Minister of Tourism and International Transport, Richard Sealy, has dismissed suggestions that a low-cost carrier (LCC) model would work for regional airline LIAT.

 

His comments came in the Lower Chamber yesterday morning where he responded to this suggestion made by the Opposition. In fact, he opined that this would bring about the demise of the airline, since 60 per cent of the routes are social routes.

 

“...Legacy carriers don’t even want to trouble that model… You can’t look at it simply from a point of view of profiteering, it is a different scenario with LIAT.”

 

He said that the airlines in the English-speaking Caribbean are losing significant sums of money, to the tune of an estimated US$1 billion.

 

“Governments subsidising airlines in the region to the tune of US$100 million per year. Why? Because the Caribbean is the most tourism-dependent region in the world and whereas it might cost on one end, there is benefit on the other by way of regional movement, tourism and tourists moving, and the direct and indirect spend that comes from that.

 

“That is same reason why both governments in Barbados and all governments in the region support extra-regional carriers as well. Because that is how we earn our keep. So this notion that somehow you can run LIAT as a business is an absurdity and it is not going to happen.”

 

He said the Government has had to make tough decisions, noting that staff count may have to be reduced.

 

“We probably will reduce that staff count by another 30. It is truly on 90 are based here, most are based in Antigua, but we are trying to run a lean, mean and more efficient operation, but at the same time not compromise our social responsibility to the people of the Caribbean,” he said.

 

As it relates to the resolution being debated, the Minister explained that the proceeds were for a re-fleeting exercise. “You accept that LIAT is critical, so you had a Dash 8 fleet, 16 strong, ageing, stitched together literally; you would look out of the window and see pieces of tape on the fuselage and the wings. This was in the time of plenty.

 

“We came to office faced with the reality of the economic downturn, but we had to do something about the fleet because safety was starting to be compromised. So we had to renew the fleet, that would improve efficiency, drive down maintenance costs, offer better service.” (JH)