February 8, 2011

LIAT to explore new territories and expand fleet

LIAT is exploring the possibility of taking its service to new territories, as well as expanding its fleet.{{more}}

Prime Minister Dr.Ralph Gonsalves, Chairman of LIAT’s shareholder governments, made the disclosure on Wednesday, February 2, at a press conference following a meeting in St.Vincent and the Grenadines on the airline’s operations.

“While others may wish to come into our space to compete with us, it is not beyond LIAT for LIAT to also go further regional up to Jamaica and to Miami and even to New York,” said Gonsalves.

On the issue of fleet expansion, Gonsalves said the discussion on the issue started some time ago, but a full discussion was held on it in January 2010. He said discussions on the matter are going a bit further now where the shareholder Governments have received more details, information, analysis and presentation.

Meanwhile, Dr.Jean Holder, Chairman of LIAT, said there is going to be a new approach as to how LIAT conducts its business in the region. He disclosed that the airline will have to look into some of the islands that it services, as it braces for competition.

“We fly to a number of countries where it is not an economic prospect for us. Several of our countries provide revenue guarantees to foreign airlines flying into the region, but have refused to do the same for LIAT, which is, believe it or not, the largest carrier in the region,” said Holder, noting that LIAT transports approximately one million passengers per year.

“The idea of a revenue guarantee for non-commercial route is resisted very strongly. That will not continue. When we’ve done a cost benefit analysis of a particular service and it does not profit us, especially if a person is not a shareholder in the company, then we will not be able to continue that service without assistance,” Holder stated.

Holder mentioned the issue of increased cost that LIAT has to deal with, particularly paying fees to countries which it flies over. It costs LIAT approximately $2 million annually to fly over the airspace of Martinique and Guadeloupe.

“It’s not a cheap matter,” said Prime Minister Dr.Ralph Gonsalves, Chairman of the shareholder governments which finance LIAT. He added: “There are a lot of things which people take for granted until they know the facts.”

Prime Minister Baldwin Spencer of Antigua said while LIAT has a commitment to the people of the region, it also recognizes that the countries which benefit from the service of the airline ought to come on board and provide support for LIAT.

“With respect to some of the destinations and the routes that LIAT would be required to fly, we know that they are unprofitable routes, they may not make any commercial airline sense; but we also recognize that without LIAT providing the service to some of these destinations, the people are the ones who would be suffering,” said Spencer.

He said on the matter of support for LIAT, responses have not been positive, but the call still goes out. Spencer said one of the means of addressing the challenge is to provide route revenues for LIAT.