LIAT EXPERIENCES THE BEST AND WORST OF TIMES
The long-term future of LIAT, the Caribbean airline, is extremely bright,
according to Director of Corporate Development, LIAT 1974 Ltd., Mr. David
Speaking during a press conference Monday, he told the media that LIAT
continues to be the first choice airline for the people of the region. He
said operationally, the airline is an extremely vibrant organization.
"Our on-time performance over the last six months has been in the region of
80%," Mr. Stuart announced. That percentage is based on a calculation of 15
minutes grace outside of one's published departure and arrival times.
He also said the airline continues to carry approximately 6 out of every 10
passengers who fly intra-regionally and over 80% of long haul customers who
come to the region.
"In that regard, Tortola is of particular interest and value to us because
most of your clients coming from the United Kingdom fly to Antigua on
Virgin Atlantic, British Airways and BWIA and we have the pleasure of
transporting them here for you," the LIAT official said.
For the last quarter, December, January and February, LIAT's carryings have
been an average of 26% above the same quarter the year before. This is an
indication that passenger numbers continue to be strong, despite the
Over the past three months, LIAT has been able to establish a level playing
field, according to Mr. Stuart. He said prior to December, they had been
operating in the face of competition by its main competitor Caribbean Star.
He said governments have taken a concerted effort to ensure that the
regulatory machinery in place to regulate air fares is working and both
airlines have been asked to charge the same tariff and prices that are not
below cost. He said as long as there is no price advantage, the people of
the Caribbean continue to 'vote with their feet' for LIAT as their carrier
LIAT is this year in its 47th year of operation and the company has now
embarked on a corporate renewal programme. "This is a massive programme,
where we have launched the new LIAT and our slogan is 'Getting Better and
The new LIAT is epitomized by its new company colours and logo, new
corporate uniforms, the re-branding of the aircrafts and the changing of
Mr. Stuart said the company has also embarked on a programme to put all 670
of its staff through a motivational and staff development training seminar.
He said 291 members have already done the programme.
"What this is designed to do is to assist LIAT employees to become more
commercially aware and more customer driven, since it is our goal to raise
the level of our customer service," said Mr. Stuart, who is facilitating
the training. "We will continue to do these programmes so that our staff
begin to understand that the customer is boss and that in an era when we
have competition who are running similar aircraft as we do and operating a
similar schedule, that we need to set ourselves apart by the level of
service we give."
In addition, Mr. Stuart said LIAT has just re-launched its package business
with LIAT quick pack, an express package business, an expansion of the
small package business started in 1984. To that, they have added track
pack, an Internet based tracking system which allows customers to trace
their packages by logging on to www.flyliat.com.
Meantime, in addressing the serious financial situation being faced by the
regional airline, its Director of Corporate Development described it as
being a paradox. "Where as on one hand we have a very vibrant organization
operationally, all this vibrancy is under threat because we are in a tight
Mr. Stuart said this financial situation goes back to 1995 when LIAT was
given a commercial mandate by the governments of the Caribbean, who are the
shareholders, to run the airline profitably. He said prior to 47 years ago,
LIAT operated almost as 'a social organization, sophisticated bus service'.
"What did not happen at that time (1995) was that we were never given the
capital that was required to launch us into a commercially viable
organization," he pointed out. He said it is to the credit of LIAT
management that the airline has been able to operate without being properly
and adequately financed since 1995.
The LIAT official said with the events of September 11th, 2001, the impact
that has had on civil aviation, the rise in insurance and security costs
and that passenger numbers have plummeted, the fact that LIAT needs this
capital has become even more acute. He said the full amount of capital
required by the company is EC$100.9M, but the immediate need is for EC$25M
to help meet aircraft leases, staff redundancies etc.
Part of the restructuring of LIAT to make it more vibrant, lean and mean
organization is the reduction of employee numbers. The company has been
doing this steadily since 2000 when they had 1100 employees. That figure
now stands at 670.
"It is the desire of the CEO to see that figure come down to possibly by
another 130," Mr. Stuart announced. "This is being done not in a draconian
or heavy-handed manner, but the staff numbers are being reduced by a way of
voluntary redundancy schemes, of which some of the capital debt we seek
will defray those social costs."
He said this is also being done by way of out-sourcing and finding other
ways to do business.
LIAT is owned by 9 shareholder governments. A special CARICOM aviation
committee was established, headed by St. Vincent and the Grenadines Prime
Minister Dr. Ralph Gonsalves, with Mr. Maurice Edwards, his Director
General of Finance, to work on the re-capitalization of LIAT.
A World Bank consultancy team has already been conducted an evaluation of
LIAT and their work is expected to be completed shortly.
The request for the initial $25M in funds was made by LIAT in February, but
it had not arrived by March 17th. Caribbean governments and LIAT staff are
said to be working feverishly to ensure the airline remains in the skies.
"Whilst we, the management are awaiting this money, we are doing all in our
power to manage a very tight financial situation," Mr. Stuart stated. He
said unions and staff representatives have agreed to vary their working
conditions and a series of other initiatives to reduce LIAT's costs over
time. The management of LIAT have also agreed to take a 10% pay cut.
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