Eleven destinations across the Caribbean that currently see service from LIAT (LI, Antigua) have been given a deadline to respond to the airline’s route subsidization proposal.

In late February, the Prime Minister of Trinidad and Tobago, Keith Rowley, warned that LIAT risked collapse unless it was immediately recapitalized to the tune of at least USD5 million. The pan-Caribbean carrier is majority-controlled by the governments of Barbados, Antigua & Barbuda, St. Vincent & the Grenadines, and Dominica with other nation-states such as Trinidad & Tobago owning minority stakes. A perennial loss-maker, it has been heavily reliant on shareholders given many of the routes it plies are thin and suffer from poor demand.

Given the seriousness of the situation, a meeting was held in Bridgetown on Monday, March 11, between union leaders, airline management, shareholders and other officials, to discuss the way forward.

According to the Caribbean Broadcasting Corporation, Vincentian Prime Minister, Ralph Gonsalves, told the Barbadian parliament on Monday that the five largest benefactors of LIAT services have agreed to contribute a total of USD5.4 million to the airline as follows:

  • Barbados (116 weekly departures) - USD1.614 million;
  • Antigua & Barbuda (69 weekly departures) - USD960,310;
  • Dominica (25 weekly departures) - USD347,938;
  • St. Vincent & the Grenadines (52 weekly departures) - USD723,711;
  • Grenada (35 weekly departures) - USD487,113.

Gonsalves added that the shareholder governments had resolved to approach a further three governments who benefit significantly from LIAT's services namely:

  • Guyana (asked to contribute USD292,280);
  • St. Kitts & Nevis (asked to contribute USD389,691);
  • St. Lucia (asked to contribute USD584,536).

He added that several other countries serviced by LIAT — including Trinidad & Tobago — had not been approached given their unwillingness to contribute any emergency funding into the carrier.

However, given the imminent need for funding, 11 destinations have since been given until Friday, March 15, to respond to LIAT's minimum revenue guarantee (MRG) proposals.

“If a country wants a particular flight and it is not viable financially for LIAT that country pays a guarantee for its operation, just like they do for the international carriers,” Gonsalves said.

Under the MRG model, routes that are not subsidized by local governments will simply be terminated. MRG letters have since been sent to 11 destinations namely Antigua, Barbados, Dominica, Grenada, Guyana, St. Kitts, St. Lucia, St. Martin, St. Vincent, Tortola, and Trinidad with Martinique, Guadeloupe, St. Martin, and Puerto Rico to follow in future. The MRG is expected to yield an estimated USD16 million in annual revenue.

In addition, the PM also confirmed that LIAT's workforce would also have to bear some degree of pain although the extent has yet to be determined.

LIAT is saddled with at least USD60 million worth of debt, owed primarily to the Barbados-based Caribbean Development Bank.