ST. JOHN’S, Antigua, The Antigua and Barbuda government says it is prepared to “collapse” the regional airline, LIAT, if it does not emerge as a “new and lean,” entity as part of the re-organisational plans for the cash-strapped airline.
Speaking on his private radio station here over the last weekend, Prime Minister Gaston Browne told listeners that his administration is awaiting the new plan being devised by the administrator, Cleveland Seaforth, who he said has already indicated that new contracts would be handed to employees of the recapitalised airline.
Browne said that the new LIAT would be operating with four aircraft rather than the 10 it had before and that ‘the amount of people working for LIAT going forward will be significantly reduced.
“My understanding is that the administrator will be terminating all existing contracts…the existing individuals will be offered new contracts in order to operate the airline going forward. So it will be a very lean and efficient entity and I have to say here that there is no way we are going to waste taxpayers money to fund a bloated institution.
“So on the basis that the receiver presents a plan to us with a lean LIAT, one that could probably break even, we will be happy even if it is making a nominal loss, fine, but if the plan does not fit into our objectives of having an efficient and right size LIAT then clearly we will have a problem and I have to say here too that if we are unable to get a lean LIAT, then we will have to collapse it,” Browne said.
Last week, Information Minister, Melford Nicholas, said the financially-strapped regional airline, LIAT, which is undergoing a restructuring programme, is likely to return to the skies in November.
Nicholas told reporters that he would not want to give a specific date as to when the airline, in which the Barbados and St Vincent and the Grenadines governments have agreed to sell their shares, will resume its operations. Apart from Antigua and Barbuda, the other major shareholder government of the Antigua-based airline is Dominica.
Prime Minister Browne told radio listeners that practically all of the countries in the region are collaborating and that the governments of Antigua and Barbuda, Barbados, St. Vincent and the Grenadines and Dominica had written to the administrator agreeing to write off their debts written off
“If I am not mistaken, we are talking close to EC$70 million in debt would be eliminated from the balance books of LIAT as a result of those countries agreeing to write off the amount due to them. Now there are creditors that the receiver is trying to get to cooperate as well and he’s presently negotiating with them.”
Browne said that what the Cabinet has decided is that while the administrator is negotiating, “we have decided that we will provide the funding so that the administrator could continue to do LIAT’s work, but we think it would be important for us to support the administrator putting LIAT back into the air.
“I know that there’s a plan that is being developed presently — it may take another 30 to 45 days to be completed — so as soon as we get that plan from the Administrator, the government of Antigua and Barbuda has committed to provide funding.
“In fact the funding that we are providing, we’re doing so as a preferred creditor, not as a shareholder. So, if things do not work out then the government of Antigua and Barbuda will be the first to be repaid. I want to make that abundantly clear.”
He said the funding would be in the form of a “preferred creditor and not as a shareholder and if things do not work out then the government of Antigua and Barbuda will be the first to be repaid.
“I want to make that abundantly clear as you know we had borrowed US$15 million to invest in LIAT and we have commenced utilising some of those funds and we will make the funds available to assist the [Administrator] in his objective to try and get LIAT back in the air,” Browne said, insistsing “clearly it will be a downsized LIAT’.