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CARICOM | LIAT may soon be liquidated and another airline formed says Gaston Browne

Featured CARICOM | LIAT may soon be liquidated and another airline formed says Gaston Browne
ST. JOHNS, Antigua, June 27, 2020 - The Regional airline LIAT may soon be liquidated and a new entity formed in its place. This is the word from Prime Minister Gaston Browne of Antigua and Barbuda, major shareholder in the regional airline.

Speaking on a local talk-show, Prime Minister Gaston Browne said because of COVID-19 the embattled airline's losses have multiplied. “COVID would have actually, let’s say increased the losses exponentially, so whereas in all of 2019 LIAT made a loss of about EC$12 million, that was within the means of the shareholder governments to subsidize,” Browne said on local radio in Antigua.

“You would have found that since COVID, the planes have been grounded, they have to pay the lease payments and they are not getting any revenue.

“A decision will have to be made to collapse it and then maybe the countries within the region will have to come together to form a new entity,” Browne added.

The Antigua and Barbuda leader says he cannot see the region moving forward without a form of connectivity and you cannot have an integration movement if people cannot connect.

liat 828x287“At the end of the day, the only service that Antigua and Barbuda has enjoyed … within CARICOM is LIAT and this has been the case for several decades.

“So I just hope that we are not going to have countries within the region opportunistically fighting us to get the headquarters in their country to displace Antigua and Barbuda,” added Browne.

The prime minister said co-operation between the private and public sectors are critical to the success of the new entity, and underscored the importance of the new entity being formed and operationalised quickly.

He said: “Back in 1974 when LIAT was collapsed, my understanding is that it took a day to start the operation of a new entity. It may be a little more difficult to get it done within 24 hours and I do understand that there are a number of stakeholders that we have to satisfy, especially creditors, and I believe that we could do a workout with the various creditors and to literally get some arrangement in which they can accept that we are not conveniently closing LIAT 1974 Limited. The governments cannot go any further with it.”
 
According to Browne, LIAT does not have sufficient assets to satisfy the requirements or claims of most of its creditors, including the airline's employees. He said the airline owns three planes which are charged to the Caribbean Development Bank.

“Clearly they have a superior claim and after they would have covered their claim there will be hardly any assets available to liquidate severance and other liabilities to staff and other creditors, so there has to be a negotiated position,” said Brown.

He added that LIAT is a Caribbean institution that was built by Caribbean people, which the region should be proud of.

He said American Airlines, like a number of other US-based airlines, have gone belly-up in the past, but they never discontinued the name.

He said Caribbean nationals should be proud to represent brand LIAT the same way Americans boldly support American Airlines.

The Leeward Islands Air Transport was first established in Montserrat in the year 1956.

In 1971 it was acquired by the UK’s Court Line Aviation before changing hands yet again.

The company was rebranded LIAT (1974) Limited when it was acquired by eleven Caribbean governments in 1974.

  • Countries: Antigua_Barbuda