Our Readers' Opinions
October 28, 2005
Stop dragging airlines into our politics

Editor: Please permit me space to comment on the utterances of the Hon Prime Minister at his public meeting two weekends ago. He seems to be constantly making every effort to politicize the business of the airline industry. In doing so he actually exposes the weaknesses of LIAT and proves the point that LIAT cannot successfully co-exist with other carriers and therefore is only successful when it exists as a Monopoly. {{more}}

It is therefore important to note the following:

1. There is absolutely no reason why LIAT or ANY other airline’s business should be on the political platform.

2. From all evidence researched about Caribbean Star, they have survived for five years WITHOUT any direct or indirect hand-out or help from Governments (including the current SVG Government). One therefore CANNOT see the connection between the Prime Minister’s allegations re the Opposition Leader and Caribbean Star.

3. It is obvious that when an airline makes its plans and business decisions in a boardroom and not in Cabinet, the process of responding to Market and

Administrative challenges becomes much more effective.

4. With LIAT’s current business plan and price structure, one should not be surprised to see them coming back to Governments soon for more cash support (as hinted by the LIAT Chairman). It must be noted that with the cost of fuel skyrocketing, LIAT’s operating cost per flight hour must be Very Close to US$ 3,000.

(e.g.). A flight SVD to POS is approx. 55 Minutes + or – 5. Effectively the cost of moving the Dash 8 aircraft from SVD to POS will be US$ 3000. If the Airline cannot recoup this cost, it effectively operates at a loss. The Question is: Can LIAT recoup this cost at their current Seat Prices?

It is clear to all that LIAT has had inherent problems for years. These problems have never been fixed but instead given New Band-Aid (Sticking plaster) in the form of cash injections from friendly Governments. Traditionally, Liat operated in an environment where there was little or no competition. Airline fares were high and Service levels were low.

The airline is now given the opportunity to function and excel where there is strong competition. It is for the Airline’s board and management to now step up to the task of adjusting to that new and realistic business environment.

There can be NO benefit to LIAT where politicians make excuses for the weaknesses and shortcomings of the Airline. Nor would it help to constantly pump Tax Payers’ Money into the obviously flawed structure without ensuring A PERMANENT FIX. A closer look at the current trends seems to indicate that it is LIAT who is charting their own path to destruction.

Airline Watch