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 Stuart.

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 competition.

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 of choice.

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 Better'."

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 the literature.

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 financial situation."

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.