After years of citing financial troubles and loss of profits, there are indications that the regional airline LIAT will be dropping out of the Caribbean skies, no longer able to provide that important linkage between Caribbean countries.
The first serious indication was made over the past weekend by Antigua and Barbuda’s Prime Minister Gaston Brown when he announced that the airline may soon be liquidated to be replaced by a new entity.
The proverbial straw that seems to have broken LIAT’s back was the loss of revenue due to COVID-19 which the prime minister said increased the airline’s losses exponentially by the grounding of its planes. He noted that with the planes on the ground, lease payments still had to be paid putting the airline in greater financial problems than ever before.
Another indication of the coming closure of LIAT appeared in a letter circulating on social media purported to be from Saint Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves to staff members on Monday. That letter spoke of the closure of the airline stating that “both the Board of Directors and major shareholders agree that the airline cannot survive this crisis “and that “a general meeting of all the ordinary shareholders and creditors will be called for the purpose of considering the closure of the airline.”
According to the letter, over the past few months, LIAT has been challenged as a consequence of the COVID-19 pandemic. Its financial state has been reviewed and LIAT is unable to pay its debts.
“As you are aware, since 2017, LIAT has been struggling to recover from a devastating hurricane season. The major shareholder Governments have made every effort to support the airline, however with the current pandemic affecting all sectors of national economies, the major shareholders are unable to give LIAT needed support. Both the Board of Directors and major shareholders agree that the airline cannot survive this crisis,” noted the letter to staff members.
The letter went on to state that “a most important priority of the airline is the welfare of the staff”, the payment of their outstanding salaries and severances will be urgently addressed in the process.
“The shareholders understand that this information is disappointing and an unfortunate result of the circumstances that will ensure that the process is fairly and justly undertaken,” ended the letter.
This is not the first time Gonsalves have spoken of the imminent closure of LIAT. Just last year he expressed such fears since most of the countries which used the carrier services did not respond favourably to its request for US$5.4 million to ensure its survival.