LIAT’s future in further doubt as CARICOM looks to outside airlift

With its regional airline LIAT slated for liquidation the Caribbean is looking to outside resources to help maintain air connectivity among the islands. Speaking in a CARICOM Special Conference outgoing Chair and Barbados Prime Minister Mia Mottley noted that at least six airlines from the region are keen to back-fill the capacity gap from LIAT’s collapse. Incoming CARICOM Chair, Dr. Ralph Gonsalves of St. Vincent and the Grenadines, echoed those thoughts.

LIAT has been a critical part of our history. it allowed Caribbean people to move. But there is a point where the instruments of the past must be transitioned… [Keeping LIAT alive] would require a level of funding that we simply do not have in the affairs of our communities.

– Barbados Prime Minister Mia Mottley

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Antigua and Barbuda Prime Minister Gaston Browne skipped the meeting in protest of what he describes as “a conspiracy by a few regional leaders to stymie the resurgence of LIAT as a new entity to provide air connectivity for the Caribbean people and to move tourists within our region.” Browne’s goal is the recapitalization of LIAT as an Antigua-based airline, just as it has operated for the past several decades.

Among the airlines that might support airlift in the region are SVG and OneCaribbean from St. Vincent and the Grenadines, Caribbean Airlines, InterCaribbean, Air Antilles and Silver Airways. Mottley says that all six have been in contact with the CARICOM leaders, and that all are keen to add capacity into and within the region.

Gonsalves believes that these carriers can, “provide, in a very short time sufficiency of regional transport to serve the sub region. To serve ourselves safely, reliably, sustainably, and reasonably priced.” Mottley similarly hopes to “ensure that the people of the region will be able to have affordable, reliable, safe access to air travel within the next few weeks.”

Mottley further offers that the transition away from the legacy LIAT operation is “a matter of practical reality that governments must focus on keeping their citizens alive, our governments must focus on keeping their economies going.”

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Adjusting the tax and regulatory burden

Just opening the skies to additional airlines will not be enough to deliver the lift the region needs, especially in the current climate. Establishing a successful air travel market in the region requires changes to the regulatory and financial structures under which the airlines operate. Mottley reminded the group that CARICOM agreed earlier this week  that “countries that are in a position to help stimulate air travel through the reduction of airline taxes should immediately reflect and see how they can revise so to do that.” There is a certain irony in that request given Mottley’s Barbados recently increased its departure tax, but perhaps now is the time to correct that.

CARICOM also called for national regulators to ease any licensing or AOC certification challenges for airlines seeking to launch services. Silver Airways could be the main beneficiary of such policy if it opens up options for the US-based airline to fly passengers between the islands rather than only to/from its San Juan hub.

We should proceed to assist as far as possible being able to use the power of the pen, where the make of the dollar is not capable of filling the gap.

– Mottley