By Arvel Grant
Last week, I read (with some delight) that the IMF is signaling support
for a resurgent LIAT. That could then signal possible interest by the World Bank
and a network of regional institutions, including the Caribbean Development Bank.
A few days later my enthusiasm was dampened, when I read that Port of Spain
is prepping for an expanded CAL, to bridge the gap created by the
decline of LIAT. My mind went back to the bad old days when BWIA (CAL’s
predecessor) and LIAT, battled over access to gates, ground equipment, and more,
at airports across the Caribbean. In those dreadful days, the passengers (especially
the LIAT clients) often got the "Sticky-end of the stick,
Then came LIAT’s bitter battles with Alan Stanford’s crashed effort to
operate a regional carrier. Neither the retired BWIA brand nor the convicted
Stanford could clip LIAT’s wings.It took a combination of failed management
practices (including unsustainably high cock-pit costs) and a once in a hundred
years” pandemic, to ground LIAT.
Such was the brand loyalty to the regional airline.
More recently, certain CARICOM governments gave sucker to upstart carriers
wishing to operate regionally and side-stepping LIAT in the process. Not
surprisingly, the experiment is losing altitude and failing badly. The power of the
internet and social media is exposing every slip and slide of the aspirational
regional carriers, to the dismay and consternation of their governmental allies.
So, with its oil dollars, Trinidad and Tobago will forge ahead with an
expanded CAL. If reliable and trusted financing can be found, a revised LIAT will
take to the skies.
I concede (reluctantly) that multiple reliable regional carriers are a
very good thing for the traveling public. Fair competition mitigates the prospect of
Caribbean travelers (including heads of governments) being left stranded in
unexpected places.
Whether or not regional governments join Antigua-Barbuda and private
capital, to launch a new LIAT, the checklist of priorities must include
1. Air-tight and equitable agreement between a share-holder government or
governments (on one hand) and private investors, on the other.
Such agreements will need to satisfy: Leasing companies, insurance
providers, bankers, national authorities, bargaining agents, and suppliers of goods
and services.
2. Assurance that any private investor(s) will enjoy the confidence of:
CARICOM, British, French, Dutch, and US authorities. A resurgent LIAT, will
need landing rights to service airports and interline with passengers embarking or
disembarking in destinations of interest to those dominions.
3. A new LIAT, will need assurances from CARICOM governments, that CAL
(or any other regional carriers) will not receive privileges, benefits and
rights not readily available to LIAT.
4.. If the Governments of the OECS, will stand together, on the principle
of equity for all CARICOM-based users of our open skies, the prospects of a
new LIAT will be enhanced.
5. Adopting a sound business plan, a new LIAT must abandon the legacy
technologies, in use by traditional carriers and embrace more efficient and
sustainable business practices.
In that regard, Government interests in a new LIAT must abandon the idea
that the new carrier will re-employ all or even most of the former LIAT
employees. Specialist call centers, reservation apps, and modern accounting
programs have taken many of those jobs.
Finally, it will be deeply disappointing, in the event investment in a
resurgent LIAT is not readily forthcoming from within CARICOM.
There is a very strong case to be made, for the Government of Guyana, to
consider making a kind of wealth-fund" investment in the capitalization of
LIAT.
The regional Carrier, is a natural complement, to Guyana’s continuing
expansion and modernization, of the Ogle International Airport.
Further, Guyana’s expanding domestic aviation sector represents a good
hand-in-glove” fit with a new LIAT.
Ultimately, none should doubt that the lack of meaningful CARICOM
participation in a new LIAT will dilute if not destroy the LIAT brand among
sub-regional and wider regional travelers.
Given the long-standing North American and European interests in the
region's hospitality sector; and noting the potential for interlining between LIAT
and the intercontinental airlines serving the region, it is troubling that investment
interests are not forth-coming from those markets.
In the circumstances, investment capital from Africa (in particular
Nigeria) may, therefore, be a kind of last resort. Though enlightened, we must
tread carefully. The Nigerian aviation sector might not be perceived to have a
sufficiently enviable safety record.
Furthermore, the secular authorities in Nigeria, are fighting an
insurgency against a stubborn militant Islamic group, operating under the
brand of Boko Haram.
Viewed through such optics, a new LIAT, with major investments from
Nigeria may need to assure: Caribbean travelers and the tourism
markets from North America and Western Europe, that flying a resurgent LIAT
will be safe.
Walk good…Let us work together to get the new LIAT soaring again.
(For more analytical pieces, visit: arvelgrant.com or
arvelgranttoday@facebook.com <mailto:arvelgranttoday@facebook.com>
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