ST JOHN’S, Antigua – LIAT’s management remains hopeful that it will be able to break even when it closes its books on 2011.
The company, like others in the airline industry, continues to suffer the harsh economic realities of higher operating costs and a client base that has increasingly become more conservative in spending.
During a press conference on Friday, Chief Financial Officer Julie Reifer-Jones acknowledged the global economic downturn has taken a toll on the airline and the people who may use its services.
“We have experienced a downturn in our volume both in 2010 and 2011. As a result of that, the company experienced losses in 2010 and so far this year we have been faced with continuing losses. Much of that was driven by higher fuel costs but that is something that has been affecting many industries,” Reifer-Jones told reporters.
But while the airline may be operating in the red, management remains optimistic that it can change its financial standing in the final quarter of the year. The fuel surcharge implemented in August is one measure introduced in hopes of curbing the losses brought on by higher fuel costs.
“We hope to recoup some of the losses we made from the high cost of fuel through the fuel surcharge and cost reductions that we’re implementing – some of which you would have been aware of through the closure of the CTOs (city ticketing offices). We’re hoping to see some positive results on that. But it is a challenge and there is a possibility that the company will make a loss again this year. But our strategy is to try to implement various measures that would allow us to break even and to survive the downturn,” she said.
The airline’s management is also banking on its cargo service to bolster its revenue stream for 2011.
Additionally, LIAT CEO Brian Challenger said the airline has rolled out a series of marketing strategies to generate much-needed revenue.
Among the strategies is the plan to target seniors, shoppers, sports people and students. Called the “Four S” plan, it will offer discounts and other incentives to these groups in an effort to broaden their client base. Challenger said the programme is part of the airline’s strategic focus.
The airline has already commenced discussions with the Barbados Association of Retired people to put together a programme that would enable members to access discounted travel.
Last month the airline announced plans for a travel and shopping incentive package for St Maarten.
LIAT and St Maarten authorities agreed on the package that would be aimed at lowering the cost of shopping in the Dutch country for regional travellers by offering reduced airfare, discounted shopping and options for discounts in other areas like car rentals, hotel accommodation and restaurants.
A similar package is being explored for Puerto Rico.
LIAT is jointly owned by the governments of Antigua & Barbuda, Barbados and St Vincent & the Grenadines. In recent years it has failed to make a profit prompting shareholders to explore more aggressive means to keep the airline flying.
(More in today’s Daily OBSERVER)