LIAT's Plight

Regional Governments urged to bail out the financially strapped carrier..

St Lucia's largest trade union, the National Workers' Union (NWU), had called on the island's government to help bail out the debt-ridden regional airline LIAT (1974) Limited before the end of 1999, to protect the jobs of the carrier's local workers.

In a letter to Tourism Minister, Philip J Pierre, union president Tyrone Maynard also called on government to consider a ten-year moratorium or offer a concessionary financial package to the cash-strapped airline.
"We are calling on government to consider waiving all fees owed by LIAT and offer a ten-year financing package to the airline," Maynard reported. Fifty St Lucians are employed by the carrier, which currently owes the St Lucia government close to US$1.6 million in ticket taxes and landing fees.
Five years ago, the former United Workers' Party administration wrote-off US$1 million owed to government by the airline. LIAT currently owes regional governments more than US$7 million in landing fees and other dues.
"These employees are committed to home mortgage payments and they own vehicles, with cost implications," the union said in the letter to the Minister, adding that LIAT continues to make a valuable contribution to the development of the regional tourism sector.
Maynard said that it was against this background that his request on behalf of the airline warrants some special attention. He said financial support would go a long way towards helping LIAT pay the US$1 million in wages annually to St Lucian workers.
He said that while he was not against competition for the regional carrier, other airlines coming into the region were not necessarily interested in ensuring the success of Caribbean aviation and tourism but simply trying to make quick money.
"During the crucial periods when others packed up and left, LIAT stayed and served the region well. So at this point we need to do everything to assist the company to allow it to become more profitable and to protect those jobs."
Tourism Minister, Philip J Pierre said Government was receptive to the suggestion and discussions will be held with the other regional shareholders before a decision is made.
"Writing-off LIAT's debts to the government and people of St Lucia may not have the effect which the union hopes, as the airline's debt to other member territories will still inhibit its ability to operate," he added.
In light of its contribution to the local tourism sector over the years, Pierre said he too would like to see LIAT continue operating well into 2000.

Hard decisions

"However, if the carrier is to survive that long, then some hard decisions must be taken. The whole staffing structure would have to be reviewed in addition to the viability of some of its routes," he added.
Pierre suggested that LIAT consider an alliance with another carrier, something which had never been properly tested in its long history of operating in the Caribbean.
"What we will like to see is LIAT getting out of the assist-me mode, and beginning to operate on strictly a business and profit level." Pierre commended the employees of the company for being model workers, as for several months they had been receiving their salaries late with very few complaints.
"It is clear that they themselves have the company at heart," he said, adding that it might be a step in the right direction if LIAT agreed to sell more shares to the workers.
"Giving employees a greater stake in the company is probably the way forward for the financially-troubled carrier," he said.
In order to survive and receive Government's support, LIAT's must face radical restructuring. As a start, the company will need to put itself in a position where it could meet its financial commitments to the state, he said.
"You cannot expect to land an aircraft at an airport and the country makes provision for certain services and you do not pay the cost of this support." Although they were not willing to forgive the airline's debts, St Kitts/ Nevis and Montserrat have suggested that the outstanding sums could be settled under special financial arrangements.
LIAT is currently experiencing financial problems and a recent aviation report has recommended that the airline either shut down or restructure its operations by laying off 20 percent of its staff.
The report stated that the level of losses during the past two years was clearly unsustainable for an ordinary commercial organisation and puts LIAT's viability into question.