St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves recently engaged in a heated exchange with a Grenada journalist over questions posed about LIAT airline.
This came against a backdrop of calls being made for regional governments to invest in LIAT’s re-fleeting exercise which Richard Sealy, Barbados’ Minister of Tourism and International Transports, said will cost “upwards of US$100 million in equity and debt financing” over the next two years.
PM Gonsalves is LIAT Shareholders Chairman and the government of St. Vincent and the Grenadines along with Antigua and Barbuda, Dominica, and Barbados are principal shareholders in the struggling airline.
During the interview on CC6 in Grenada, PM Gonsalves was asked if it was prudent business practice for persons to invest in a business that was not doing well.
Dr. Gonsalves said the regional airline, which has been in operation since 1974, could not be compared to other types of businesses. He said the airline will simply never be profitable.
“A regional airline of this kind, this is not anything which is going to make money. This is a service which has to be provided and if we can break even with this service, fine, but you cannot make money off this.
“So you can’t use the same investment criteria which you would use for a hotel or a beer factory to use in relation to regional transport otherwise…I would not be able to go to Barbados,” he charged.
As the journalist continued to pose the question repeatedly whether or not LIAT was a business, PM Gonsalves said she did not have a proper understanding of regional transport to have framed her question the way she did.
“You consider air transport business like any other business. It is not a business like other businesses. Of course it’s a business, but it is a business of a different type.”
She asked the Prime Minister if LIAT is not a business designed to make a profit.
An agitated PM Gonsalves explained that “a regional airline like LIAT, which is going about here, don’t look for it to make any profit”.
“If it breaks even, you doing ok,” he declared.
LIAT this week celebrated the integration of its third ATR 72-600 aircraft to its fleet of relatively old Dash 8 planes.
The airline has been slammed with bad press over recent months due to numerous flight cancellations and extensive delays blamed on operational issues such as a shortage of pilots and maintenance problems.
Disgruntled passengers and even a hotelier have ‘voiced’ their displeasure with LIAT through every available medium including the media and online social networks. Most have called for the dismissal of CEO Ian Brunton and other executives of the airline.
PM Gonsalves told The Observer that calls for the Board to terminate the airline’s management staff would not solve the problem.