St John’s, Antigua (CMC) — A senior Antigua and Barbuda government official Tuesday denounced the strategy by the financially strapped regional airline, LIAT, to sell and lease back one of its new aircraft bought under a US$100 million loan facility provided by the Barbados-based Caribbean Development Bank (CDB) in 2013.
Chief Government spokesman, Lionel Max Hurst, said LIAT’s chief executive officer David Evans had run the airline into the red saying LIAT had given up ‘all the routes in the northern part of the Caribbean” and “as a consequence LIAT is not bringing in as much money as it used to.
“So he has to find money elsewhere and what he does, he sells the airplane at a discount rate and then have to pay the man (buyer) forever for the ownership the man now has,” Hurst said on a radio station aligned to the ruling Antigua and Barbuda Labour Party (ABLP).
But Evans had earlier said there was nothing new with the transaction as other airline companies globally had engaged in similar activities.
“There is a transaction in the airline industry known as sale and leasebacks where you sell an aircraft and lease it back from a leasing company, and that’s what happened. We still have nine aircraft,” Evans said as he confirmed that the airline, owned by the governments of Antigua and Barbuda, Dominica, Barbados and St. Vincent and the Grenadines, now owns three of the nine ATR aircraft recently bought from the French manufacturer.
Evans said the lease arrangement “allows you to raise the capital for the business and still keep the aircraft.
“The aircraft is a mixture of own and lease and at the end of the lease term which is normally 10 to 12 years, the aircraft goes back to the lessor, the owned aircraft will stay in the company until such time the company tries to dispose of them,” he added.
But Hurst dismissed Evans’ explanation, telling radio listeners “we bring these stupid people to run our business…if we can run our country I can’t see why we can’t run an airline”.
Last week he had been critical of the LIAT CEO after it was disclosed that the airline had agreed to position another ATR aircraft from its headquarters here to Barbados as part of a strategic move
“They bring in these fellars from England and so on t run LIAT and they don’t know anything at all about our region. I don’t know for some reason because of the way they speak…the people who are making decisions fall all over them.
“You see that guy that is running LIAT now is a stupid man and an extraordinary stupid man,” Hurst said.
But Evans said he was not perturbed at the criticism of the senior government official, noting he has been in Antigua for the past 16 months “and LIAT is never out of the news..
“I simply concentrate on getting on with the job and try to do the best that I can for LIAT and we are pretty happy with the way things are progressing this year.
“Those who call for me to go…I don’t; suppose that will change and in the meantime my focus is on trying to do the best job for LIAT, customers, and the staff that belong to our airline”.