LIAT CEO Defends Airline From Criticisms

WILLEMSTAD, Curacao (CMC) – The chief executive officer of the regional airline, LIAT, David Evans, last week Friday, expressed “disappointment” at recent statements by some Caribbean prime ministers that their countries are being punished by the financially strapped airline because of their non-involvement in the company.

“When you have a fleet that is 20 per cent smaller than the fleet that you’ve operated historically it is physically impossible to fly to all of the places that you used to,” Evans told a news conference here, adding “I can categorically assure Grenada and other countries that we actually don’t take a position on that.

“You could argue that we should look after our major shareholders before the very small shareholders and Grenada certainly falls into that category. But unlike some of the political statements and we’ve seen similar statements from St. Kitts as well, we at LIAT have one objective and that is to connect the people of the Caribbean and we will do that in the best way we can”.

LIAT is owned by the shareholder governments of Antigua and Barbuda, Barbados, Dominica and St Vincent and the Grenadines.

The four regional governments have been appealing to other Caribbean Community (CARICOM) governments to invest in the airline that services 17 destinations and is involved in upgrading its fleet with a loan from the Barbados-based Caribbean Development Bank (CDB).

Grenada’s Prime Minister Dr. Keith Mitchell recently criticized the decision of the airline to decrease the number of flights to the island and St. Lucia’s Prime Minister Dr. Kenny Anthony said Castries was not prepared to invest in the airline, calling on the shareholder governments to bite the bullet and put in place policies that would ensure the financial viability of the Antigua-based carrier.

But Evans who spoke to regional and international journalists at the Barbados-based Caribbean Tourism Organization (CTO) sponsored State of the Industry Conference (SOTIC-2015), insisted that LIAT doesn’t take positions based on whether or not countries are shareholders.

“I think that’s absolutely wrong and it disappoints me to hear politicians from some of these very small shareholders in LIAT speaking like that and more importantly saying we don’t want to invest in LIAT.

“LIAT is owned by 11 governments and all of those governments have a very important stake in LIAT and we would like all 11 of those governments to support LIAT,” Evans added.

Meanwhile, Evans said that the impact of taxation affects regional airlines like LIAT far more than it does international airlines.

“I can give you many examples of journeys around the region where the tax on the ticket is the same amount as the ticket,” Evans said.

“We will sell you a ticket for US$100 dollars in LIAT but you will actually pay US$200 for it because the other $100 will be tax. That’s an extreme example but by and large 40 to 50 per cent of all the tickets that we sell that proportion is the amount of tax so that’s a major issue.”

But Evans also pointed out that governments need revenue for aviation infrastructure, noting that the tax issue will remain a very big issue.

“It’s a very difficult one to solve but I think we have to focus the minds and make it easier for people to travel around the region. The issue I have it that it’s just gone too far and it makes it very difficult for people to travel around the region affordably.

“We are not asking for any special favours. What we do ask for is recognition that we at LIAT play an absolutely vital role in connecting the peoples, the communities and the economies of this region. So we are not asking for subsidies but we are asking for a level playing field such that we can continue to deliver our mandate,” Evans said.

Earlier, the chief executive officer of the US-based Jet Blue airline, Robin Hayes, said high taxes were posing a major challenge to airlines servicing the Caribbean.

“We know if the tax can come down by US$50 dollars, we could stimulate a high number of travelers to the region. We would add the capacity, (and) the overall tax take would go up because more people are coming, they’re staying longer,” Hayes said.

Hayes, whose airline started flying to the region in 2011, said there is need for Caribbean governments to revisit their taxation policies for airlines, in order to increase the number of visitors to the region.

“I think the governments and the communities we have the most success with, are the ones that really understand that.”

But, the Premier of the Turks and Caicos Islands, Rufus Ewing, said aviation taxes can only be lowered in Caribbean islands if the problems of infrastructural development and national security are solved.