ST JOHN’S, Antigua – More details have emerged about LIAT’s plan to stem its losses – estimated at $21.5 million – including reducing staff by 200 and possible court action against a competing airline.
Chairman of LIAT’s shareholder governments, St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves said the company is hoping to reduce the workforce of more than 900.
“We have 900 and something employees, we have to come down to 700 and something,” he told OBSERVER Radio’s OBSERVER AM yesterday, while suggesting that voluntary separation, and the closure of city ticketing offices might not achieve the desired staff reduction target.
LIAT, which incurred $21.5 million in losses during the first half of this year because of fuel and other costs, is projected to spend around $26 million more on fuel this year than in 2009.
Dr Gonsalves said too that the airline’s passenger revenues have fallen faster than operating costs and already stands at $11.4 million less than last year.
According to him, LIAT was forced to drop fares on the lucrative Trinidad to Grenada and Trinidad to Barbados routes because of competition from Caribbean Airlines (CAL).
He noted that half of CAL’s fuel price is subsidised by the Trinidad & Tobago government, which he said, is “completely contrary” to the Caricom Air Services Agreement of 1996/1997.
Dr Gonsalves disclosed that the company’s legal team would decide whether that matter of “unfair competition” should be taken to the CCJ.
In the meantime, he explained, a three-pronged approach is being taken.
“That’s an issue for Caricom and that’s an issue for the general public as we are talking about it, but it also an issue for the lawyers. I urge the lawyers to look at whether CAL has breached the Caricom treaty and therefore we can go to the Caribbean Court of Justice,” he said.
The chairman also put forward a hard-line approach to deal with territories where LIAT employees take strike action.
He has recommended that they be dropped from the airline’s routes while the industrial action is in progress.
“I say anywhere there’s a strike, we pull off that country from the route during the period of the strike, and if the union gets solidarity from other unions across the region because you pull from that route, let them close it down,” he said. “… Let the people in the region realise the importance of LIAT so that there will be some sense that everybody has to get serious about this matter.”