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Monday 3 August, 2020

PM Browne: We can fix it! If LIAT is reorganised it can be saved

Prime Minister Gaston Browne

Prime Minister Gaston Browne

 

"If you want to liquidate LIAT then there has to be a transition to a new entity. We can fix it!"

Antigua and Barbuda Prime Minister Gaston Browne on embattled regional airline, LIAT.

Speaking in Parliament on Saturday he said some steps could be taken to salvage the airline.

Even though by his admission it would be a challenging task, he insists that it could be done.

PM Browne said many families will be affected by widespread job loss and employees may get no severance payment if LIAT is liquidated.

“The governments are really under no legal obligation to pay them that’s based on Solomon and Solomon, separate entities. My colleagues are arguing that the liability will be limited to the value of the shares. It’s a sound legal argument even though I think it's morally reprehensible and perhaps could be even challenged legally.”

He said if the airline is reorganised liquidation may not be necessary.

 “I’m saying here if you can get the staff to get a 50% haircut and you put that 50% back into the company in the form of equity because we want to make sure that going forward they have full commitment to the company. The problems we’ve had with LIAT over the years is no real commitment coming from the staff.”

The Antigua and Barbuda Prime Minister has positioned himself as the airlines champion.

He said his government is willing to provide the airline with a building to be used as Headquarters, rent-free and also suggested that the airline suspend its service to all unprofitable routes.

“We should understand that LIAT is a significant contributor of revenue to our airports, the landing fees, the taxes. I mean when I look at the Barbados yield, for example, they have almost 7000 passengers a year from LIAT. At $50 head tax, that’s $35 million a year so if you have to put back $5 million a year into LIAT, come on that’s reasonable. We’re moving a lot of people opportunistically through Barbados so that they could get their head tax. If LIAT is no longer operating in that way you’re going to see a significant reduction in the head tax going to Barbados.”

LIAT shareholders have proposed that severance payments be made based on collective agreements, but according to PM Browne, such an arrangement would be inequitable.

Based on the fact that most of the staff are based in Antigua, he said his country could then be forced to cover 70% of severance and other outstanding staff costs.

He said this could amount to $70 million in liabilities.

“That is extremely inequitable in fact its almost suggesting that the staff who work here only serving Antigua and Barbuda alone. So a pilot who flew people to St Vincent and the Grenadines or to Barbados, they were serving Antigua only? These people are Caribbean public servants, nothing less. As I said to them, they have to be careful with the precedence that they set because its LIAT today and it’ll be another institution tomorrow.”

He said reorganising the airline is in the best interest of the Caribbean people.

Despite their difference of opinion Prime Minister Gaston Browne said he feels no enmity for CARICOM Chairman Ralph Gonsalves and the other shareholder governments who have voted to liquidate the regional airline he's trying so desperately to save.

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