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Antigua’s PM Browne responds to Chastanet on LIAT Financing

Featured Antigua’s PM Browne responds to Chastanet on LIAT Financing
ST. JOHN'S,  Antigua, July 4, 2018 - Antigua's Prime Minister Gaston Browne has responded to St. Lucia's Prime Minister Allen Chastenet, following reports carried by local and regional media that Saint Lucia will subsidise the airline.

In clarifying his government's position on LIAT, in a news release, prime minister Chastenet said “We support LIAT as a regional airline and remain committed to seeing the necessary restructuring and some real change in operations at LIAT.”

“We have been consistent in our position on LIAT in that we propose that the airline operate on a strictly commercial basis. We have not yet made a decision on subsidising LIAT. What we have agreed to is a meeting to discuss some of the issues relevant to the airline. We look forward to continued dialogue with the OECS and other stakeholders on the future of the airline,” the Chastenet statement continued.

The Antiguan Prime Minister however, pointed out that his statement on the matter said: “They have signalled that they are willing to come onboard to provide some financial subsidy to LIAT.”

The above are my precise words. Please forgive me for interpreting St Lucia’s final agreement to meet to address the issues affecting LIAT, as a signal to come on board to support the sustainability of LIAT.

Gaston Browne 460
Antiguan Prime Minister Gaston Browne

Talk can not resolve LIAT’s insolvency problems, it requires the commitment by the various governments to include a possible cash subvention, lower airport fees, capital injection or all of the above.

We accept that LIAT must be operated efficiently and along commercial lines. Those are conditions precedent. However, the market structure, (small market and a capital intensive business), high debt, inadequate assets and under capitalization, would make the prospects of a sustainable profit unlikely.

If LIAT was making a profit, it would not require any support from any government. It would fund its operations and expansion from retained earnings and its positive cash flow. So the notion that LIAT should first become profitable to get support is a misaligned proposition.

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St. Lucia's Prime Minister Allen Chastenet

It’s instructive that the very government’s that are reluctant to participate have subsidized foreign carriers from wealthy countries in order to guarantee profitability and the attendant service. Some even subsidise cricket teams, that contribute less than LIAT to their economies, to the tune of millions annually without murmur.

Air transporatation is quintessential to the the integration movement. LIAT therefore is an absolutely essential service to the region. In fact, many of the airports in the OECS would look like ghost towns without LIAT. LIAT also contributes significantly to the economies of these countries and with increased support could contribute more with the movement of tourists within the region.

Subsidizing LIAT in the interim is inescapable and it requires the commitment of all, in order to effectively move goods and people within the region. With the participation of all countries that LIAT serves, this subvention will not be burdensome and it will ensure greater reliability and connectivity.

I am not bullying anyone.

I genuinely believe that a model of shared burden and shared benefits is required to sustain LIAT. I trust that the upcoming meeting to place LIAT on a sustainable path, will result in the commitment of all countries contributing to the sustainability of LIAT.

Antigua & Barbuda stands ready to subside a realigned LIAT and I implore my colleagues to join us, along with Barbados and St Vincent & the Grenadines, to place LIAT on a sustainable path in the interest of all.

Last modified onWednesday, 04 July 2018 07:59
  • Countries: Antigua_Barbuda

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