LIAT flights for overhaul
|PM Ralph Gonsalves|
WEDNESDAY JANUARY 16, 2013; KINGSTOWN, Saint Vincent and the Grenadines – “Over the past twelve years, our Government has correctly played a leading role in saving LIAT, and the placing of this vital regional airline on a sounder footing. This is an economic and social public policy issue of the utmost priority for St. Vincent and the Grenadines, and the region.”
This was stated Dr. Ralph Gonsalves, Prime Minister of St. Vincent and the Grenadines during his 2013 Budget Address to the Parliament of St. Vincent and the Grenadines last Monday afternoon.
LIAT currently operates in excess of 100 flights daily to 21 destinations namely Anguilla, Antigua, Barbados, Grenada, Dominica, St. Vincent, Saint Lucia, St. Marteen, St. Croix, Tortola, Canouan, Curacao, Puerto Rico, Dominican Republic, St. Kitts, Nevis, Trinidad, Martinique, Guadeloupe, St. Thomas, and Guyana.
This means that LIAT’s coverage is from the Dominican Republic in the north-west of the Caribbean to Guyana on the South American mainland.
“No other airline offers a similar service; and LIAT has been in the air for over 50 years,” the Vincentian Prime Minister pointed out.
Honourable Gonsalves told the House Sitting that “One of LIAT’s central challenges is its high cost base driven largely by high aircraft maintenance related costs, significantly high employee costs, thinly dispersed markets, and high fuel costs compared to another regional carrier CAL, which receives a fuel subsidy from the Government of Trinidad and Tobago.”
“The fundamental driver of an airline’s revenue stream and its cost base is the flying schedule or network,” the Vincentian Prime Minister further stated.
“Our Government is mindful of the rising cost of intra-regional air transportation. A large part of the problem is that taxes account for between 30 – 50 percent of the cost of regional fares on LIAT. Indeed LIAT administers for the Governments 66 different taxes!”
In light of these shortcomings, action is underway to overhaul LIAT flight schedule and its fleet of aircraft. “The refleeting of LIAT and improved servicing of the core network open up possibilities for new markets.
“Potential new markets with promising demographics include Haiti, Jamaica, Aruba, and Punta Cana in the Dominican Republic. These new markets will offset the projected decline in passenger traffic in the existing markets.
“Indeed several routes within LIAT’s current network are underperforming and contributing to the sub-optimal load factors. LIAT has taken the strategic decision to reduce its schedule on poor performing sectors.
“In fact there are 39 unprofitable flights affecting 18 territories. In the future LIAT will fly those unprofitable routes only if the Governments of those destinations provide an appropriate level of market support.”
As part of its restructuring which is being managed by “a new, very experienced and highly qualified Chief Executive Officer,” the shareholder Governments of LIAT have given the green light to the airline’s management “to explore, alone or in conjunction with a strategic partner a regional jet service to destinations in Central America, Fort Lauderdale, and New York.”
Prime Minister Gonsalves told the St. Vincent and the Grenadines 2013 House Sitting that “a firm decision will be taken within the 12 – 18 months time. LIAT’s journey from its terrible and threatened condition in 2001 to its current promising future has been remarkable.
“Our Government has provided regional leadership of courage, commitment and good sense in this vital air transportation matter for St. Vincent and the Grenadines and our Caribbean. (by Robertson S. Henry)