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ANTIGUA | Browne secures US$15.8 million ALBA Loan for LIAT

Featured Prime Minister Gaston Browne signs agreement with Chair of the Executive Board ALBA Bank Raul Li Causi. Prime Minister Gaston Browne signs agreement with Chair of the Executive Board ALBA Bank Raul Li Causi.
KINGSTON, Jamaica November 6, 2019 - The ailing Regional airline, LIAT has been given a new lease on life with an injection of a US$15.8 million loan negotiated by Antigua and Barbuda Prime Minister Gaston Browne with the ALBA Bank at a meeting in Venezuela yesterday.

 

Browne attended the 72nd meeting of the Executive Board of ALBA Bank in Caracas Venezuela at the headquarters of the Central Bank of Venezuela, where Antigua and Barbuda was formally inducted into ALBA Bank as a new member, and signed a Financing Agreement relating to the loan of US$15.8 million for injection into LIAT.

After formally depositing the instrument that allowed Antigua and Barbuda to join the Bank, Browne expressed satisfaction with the good financial position of the Bank.

In reply, Governor of the Central Bank Mr Calixto Ortega welcomed PM Browne noting how pleased he was that Antigua and Barbuda had become the seventh member of ALBA Bank, joining Venezuela, Cuba, Nicaragua, Dominica, St Vincent and the Grenadines and Bolivia.

Both St Vincent and the Grenadines and Dominica, in offering their congratulations, indicated that they fully supported the ‘bold move’ by Antigua and Barbuda to join the Bank.

ALBA Bank was established in 2005 as the brainchild of former President of Venezuela, Hugo Chavez Frias, and the former President of Cuba, Fidel Castro. It was envisioned as a regional development bank that would provide resources to fill the development needs of the countries of the region.

In signing the Financing Agreement, PM Browne indicated that although the Government of Antigua and Barbuda was assuming the financial liability, in fact the loan injection into LIAT would benefit the entire region that LIAT served.

‘LIAT is our infrastructure that links our scattered islands into a single economic space,’ Mr Browne said, ‘and it breathes oxygen into our tourism industry.’

After the meetings at the Central Bank, the Prime Minister had a bilateral meeting with the President of Venezuela, Nicolas Maduro Moros in the Miraflores Palace.

Both leaders reviewed the situation in Latin America and the Caribbean and agreed to work more closely together to achieve the goals of sustainable development in the region.

Accompanying President Maduro in the meeting was Vice President Delcy Rodriguez; minister of foreign affairs Jorge Arreaza; and Vice Minister in the ministry of foreign affairs and chairman of the Executive Board of ALBA Bank Raul Li Causi.

On Monday night Barbados Prime Minister Mia Mottley told a CARICOM town Hall meeting in St. Michaels, that the regional airline jointly owned by Barbados and three other Caribbean governments was “doomed” under its current ownership, declaring that her fellow leaders are “not on the same page” on the future of the cash-strapped carrier.

Mia Mottley 460She said airline’s viability was not the sole responsibility of CARICOM, even as she declared that sustainable, reliable and affordable air travel is necessary if the regional bloc is to grow.

she maintained that if the success of LIAT was left in the hands of the shareholder governments alone the regional carrier was doomed.

“LIAT is not a CARICOM issue; LIAT is the issue of three or four governments having to have shareholder discussions.

“Now if you expect the three or four shareholder governments alone to carry the burden then you will end up in trouble each time because it means that at some point they are going to make commercial decisions because there is not a bottomless pit to service it.

“LIAT 1974 Limited is a complex issue and it is complex because it has been losing money for how long.

“But the bottom line is that it does not need to be complex because what we have done is to place the burden of LIAT only on the shareholders without recognizing that routes cannot be sustainable unless there are either financially profitable or economically desirable.”

The Prime Minister said it was still important for the shareholder governments to be united on the future of the airline, which despite a series of challenges in upgrading its fleet, control costs and manage a huge payroll, this year became one of the top on-time carriers in the region.

She hinted that the breakdown in negotiations between Barbados and Antigua and Barbuda on the sale of Barbados’ majority shares occurred because of their inability to come to an agreement.

“I believe we can solve the problem but it is going to require us coming together and agreeing, and in fairness we tried to, but all of the stakeholders were not necessarily on the same page earlier this year, ” Mottley declared.

“I trust and pray that we can find the common ground for all of the stakeholders because while LIAT 1974 Limited may not be a viable proposition, reasonable, affordable, reliable air travel is the prerequisite for the growth of this region.”

Mottley reiterated the need for a minimum revenue guarantee policy to be implemented at LIAT, noting there was a similar policy at international carriers American Airlines and Virgin Atlantic Airways.

She again stressed that in its current format LIAT was simply not sustainable.

Mottley said: “We need to move to the point where we treat the LIAT planes and the inter-Caribbean planes as almost like buses from the perspective that we recognize that we need to be able to strip out the costs and to be able to have more regular travel, even in smaller planes.

“If they are financially profitable then there is no issue because the profit is after you have taken into account all of your payments, including the payments governments are now paying now for the planes.

“If it is economically desirable then we need to be able have a minimum revenue guarantee such that once the load factor of particular routes falls below whatever the agreed average is, governments who want to sustain those routes say ‘I will pay the difference between the two’ as we are currently doing with American Airlines and with Virgin Airways in many Caribbean countries.”

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Last modified onWednesday, 06 November 2019 17:55
  • Countries: Antigua_Barbuda

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