KINGSTOWN – Regional airline LIAT is forecast to register an EC$15 million (BDS$11 million) loss on its operations last year after registering a net profit of EC$8.9 million (BDS$6.4 million) the previous year.
Chairman of the three shareholder governments, Prime Minister Dr Ralph Gonsalves, speaking to reporters after a shareholders meeting, said the airline was faced with a number of problems including escalating fuel costs, labour costs as well as maintaining the airline’s ageing fleet.
“Last year we had a decline in passengers while we kept our fare base at the same level.
“In 2011 we are budgeting for a loss of EC$1.5 million (BDS$1 111 000). But it will be worse if we are not careful with some cost-saving measures,” Gonsalves said after the meeting that was also attended by Barbados Prime Minister Freundel Stuart and Antigua and Barbuda Prime Minister Baldwin Spencer.
Liat, which serves 22 destinations in the Caribbean, last year carried 1.3 million passengers as compared to 1.4 million the previous year. The airline also made fewer departures, with the figure for 2010 being 46 597 as compared with 49 127 in 2009.
Gonsalves said the cost of fuel was now US$102 (BDS$204) a barrel and with the ongoing situation in Egypt it was feared that the price would increase further.
“That’s a problem which is ahead of us,” he said, adding that the meeting also examined “a number of budget measures to achieve profitability.
“We are seeing in 2011 that we are probably going to have a two per cent decline in passenger traffic. We are hoping that this would not be the case, but you have to plan for what you see as the realistic numbers before you,” he said, adding that competition for the airline would also be a major factor.
He said the airline was also looking at expanding and improving its fleet that would allow it to look at markets beyond its traditional routes.
“While others may wish to come into our space to compete with us, it is not beyond LIAT for LIAT to also to go further regional up to Jamaica, Miami and even to New York with a particular type of aircraft and to do it in a manner which is facilitating of travel including tourism.
“We all have to be mindful in our part of the world that we have a tourism plant in Antigua, Barbados; we are building one in St Vincent and the Grenadines,” Gonsalves said adding that the focus in 2011 would be on improving productivity.
Stuart had to return to Barbados ahead of the news conference, but Spencer said that LIAT was vital to the socio-economic development of the region.
“LIAT is not just an airline operating in the Caribbean, it is an institution for the people of the Caribbean and this has been demonstrated by the loyalty of the people,” he said, noting that the airline had been operating on some unprofitable routes that no commercial airline would consider.
“We also recognise that without LIAT providing the service the people are the ones who would be suffering,” he said, urging other Caribbean countries that benefit from the LIAT service to “come on board” and help make the airline much more viable.
He said while LIAT had been making such a call for a long time, there had been no positive responses.
He told his colleagues that assistance could come in various forms including “route revenue guarantees for LIAT as they do for international airlines”. (CMC)
