Prime Minister Allen Chastanet, who over the years has not been inclined to invest in cash-strapped LIAT without a proper restructuring plan that could turn the airline profits around, maybe toning down his hard-line stance.
According to reports, the prime minister is now considering a proposal from the airline’s shareholders. This proposal came out of a meeting of shareholders of the airline in Barbados earlier this month and was presented to about 11 countries inclusive of Saint Lucia.
With the proposal comes the possibility that new flights may be cut if a government is not prepared to fund them with a guarantee. This is part of the proposal that Caribbean countries consider Minimum Revenue Guarantees (MRGs) for non-profitable routes flown by the airline.
According to Chastanet Caribbean countries agreed in principle to the proposal however the mechanics of how to make that proposal work is where difficulties come in.
“As you know a flight does not come in point to point like from Saint Lucia and Barbados. There are people on that flight also going to other destinations. How do you propose or determine the MRGs? Are you going to terminate on the existing cost structure or are you going to wait for a new cost structure and if in fact,
this existing cost structure is going to stay in place should Saint Lucia or any other country be paying very high subsidy fees for those routes?” Chastanet queried.
Saint Lucia, Chastanet said, is in need of air access and has been consistent in calling for the restructuring of LIAT.
“If I had money in LIAT and now it is bankrupt again would I put money in without knowing that there would be a major restructuring?” Chastanet asked.
“How could I be assured that the results that happened the last eight years would change versus moving forward another eight years? This is a very difficult situation. Saint Lucia clearly believes there need to be open skies. We think there are other players in the region that are prepared to step in to be able to service some routes and the fact that one aircraft type, particularly an ATR, in our humble opinion cannot serve the region, there has to be an integration of multiple airlines because there are smaller planes that are required for instance on the Saint Lucia / Saint Vincent and the Grenadines route,” Chastanet said.
With regards to the MRG Chastanet said, “there is a lot to be discussed.”
“Saint Lucia is not saying no, but there is a lot more detail that would be required in order for us to make a final decision,” Chastanet said.