LIAT to embark on major structural changes – PM
February 20, 2015

LIAT to embark on major structural changes – PM

Major steps are being taken by regional airline LIAT in order to create a more efficient and cost effective network.

Prime Minister Dr Ralph Gonsalves, who is the chair of LIAT shareholders, following a meeting of shareholders last week, disclosed that the company is embarking on a major structural change to both its network and its cost base, through a number of strategies.{{more}}

One such strategy includes the re-fleeting of airplanes from the old Dash 8 models to ATR 42 and ATR 72 aircraft.

“[LIAT] has eight new ATR planes: four ATR 72s and four ATR 42s. That is where we went,” Gonsalves explained.

“There were 13 Dash-8s in all. Some purchased, some leased. We are hoping to be able to … sell those we have and return the others by June. It’s costing a lot of money to keep them on an annual basis. In the case of the two Dash-8s, we have to have separate pilots, because it’s not like driving a bus; that a man can drive equally a Toyota bus and somebody can drive a Nissan bus. You have to be specifically trained in respect of a particular aircraft and function and operation in that type of aircraft.”

In addition to re-fleeting, the company is looking at cutting down their staff from 800 to 620 staff members. This phase, the LIAT, chair said, cannot take occur if the Dash-8 aircraft are not sold, as the funds from the sale will take care of severance payments for workers.

Furthermore, Barbados will become a central hub for LIAT, while gateways will be established in other Caribbean islands.

“We have to redefine the network and we have to establish the base in Barbados and a gateway in Antigua. The idea is to have one ATR 72 and three ATR 42s in Barbados, two ATR 42s in Port of Spain (Trinidad) and one ATR 42 and one ATR 72 in Antigua. There will also be a gateway in Dominica and one in Ogle in Guyana,” Gonsalves told media officials.

According to the LIAT shareholders’ chair, once these changes are implemented, the now cash-strapped airline company stands to generate a significant amount of revenue.

“These kinds of restructuring we are talking about are estimated, according to the company plan, to add over EC$30 million in the year, what you may call the mature year after you finish all of these restructuring,” the Prime Minister said.

“The exit of the Dash-8 fleet in 2018 will result in the saving of EC$30 million and, as I have said, the reduction of the LIAT headcount, in a full year, there will be a saving of EC$14 million.”

Meanwhile, according to a February 18 article in The Daily Observer, Prime Minister of Antigua and Barbuda Gaston Browne has called on the shareholders not to take any action regarding matters discussed at the last shareholders meeting until he has had an opportunity to meet with his Cabinet to discuss the issue.

According to the article, Browne wrote to the LIAT chair and highlighted Antigua and Barbuda’s heavy investment in the airline and the economic consequences of any decisions that were made.

Furthermore, he expressed his disagreement with moving LIAT to Barbados, citing that the move will not solve the airline’s problems.

Shares in LIAT are held by 11 Caribbean Governments, but the major shareholders are the governments of Antigua and Barbuda, Dominica, Barbados and St Vincent and the Grenadines.(BK)