Largest shareholder plotting to collapse regional island hopper

Bert Wilkinson | 4/23/2015, 2:18 p.m.

Barbados and Antigua, two of the largest shareholders of the regional commuter air service that is an aviation lifeline to many islands in the Caribbean Community, are at the center of a heated row with Antigua. The countries are accusing its neighbor of plotting to collapse the carrier, walk away from the umbrella operating group and arrive at a grand scheme that would see it owning a new entity.

Prime Minister of Antigua and Barbuda Gaston Browne recently said that documents leaked to his cabinet by unknown sources have shown that Barbados has a secret plan to systematically undermine LIAT, the Antigua-based regional commuter service, and break away from the grouping of governments that jointly own the airline.

Like all others in the region, not excluding Trinidad-owned Caribbean Airlines, Suriname airways and Bahamas Air, LIAT has been bleeding millions each year and has survived in part because of periodic financial interventions from owner governments in recent years. It recently spent millions acquiring a new fleet of French-made ATR Turbo planes, but its relatively high operating costs has left it in the red continuously in recent decades.

Earlier this week, outspoken Antiguan Commerce Minister Don Inniss suggested that the time has come for his prime minister to sit down with Barbados and other government shareholders, including St. Vincent and Dominica, and have a formal and frank discussion as to whether Barbados is indeed hatching a scheme to undermine LIAT and establish its own air service.

Browne recently called the alleged Barbados plan “treason” and tried, albeit unsuccessfully, to stop LIAT from moving some of its planes from Antigua and basing them in Barbados, which is a major tourist hub in the south and east Caribbean. But what appears to have irked Browne the most is that the proposal for a new Barbados-based airline has apparently come from deep inside the top management of LIAT, as its top executives now believe that the airline is certain to collapse in the not too distant future under millions of dollars in annual operating debts and frequent labor disputes by pilots for increased pay. Salaries account for approximately 70 percent of expenditure—a development its board has said cannot be sustained any longer.

The document calls for the Barbados airline to have a fleet of 10 turbo aircraft and approximately 350 permanent staff, spread across the region at various stations in different countries. The argument is that a new carrier would offer “a fresh start,” not be bogged down by some of the problems LIAT now has, its operating debt especially, and be forced by governments to continue working routes that are unprofitable because it is the main carrier flying there.