KINGSTOWN, St. Vincent, Tuesday March 31, 2015, CMC – St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves Monday warned against making unflattering statements about the regional airline, LIAT, saying it could undermine confidence in the business operations of cash-strapped carrier.
“Everyone who is involved with LIAT, the shareholders, the directors, the management, the workers, everybody, has to be careful what they say and what they do in relation to this matter. It is a business, and anything anybody says or does, at any of these levels, could affect the confidence of the business,” said Gonsalves, who is the chair of the regional shareholder governments.
Gonsalves comments follow statements made on Sunday by Antigua and Barbuda Prime Minister Gaston Browne that he would treat as “treason” plans for a new airline to compete with LIAT.
Browne, speaking on a privately owned radio station said that he would also be seeking the resignation of the airline’s chief executive officer, David Evans, if the plans about the new carrier prove to be true.
The document, allegedly authored at LIAT senior management, proposes that a Barbados air carrier be established with its own Air Operators Certificate (AOC) and Route Licensing Authorisation.
The new company would effectively replace the majority of existing LIAT services throughout the region and would seek to develop new markets.
An approach, methodology and structure for the establishment of the new Barbados air carrier were detailed in the document.
It said a traditional approach to fleet planning in a startup airline with a projected requirement of 10 aircraft would be to launch initially with two to three aircraft and a limited route network and build thereafter incrementally over a period of 18 months to the final fleet number.
In his radio interview, Prime Minister Browne also called for a change in the chairmanship of the airline, saying he doesn’t “see why one prime minister should control the chairmanship of LIAT” and that it should be rotated.
“These are some of the issues affecting LIAT, I mean only one person has brains out of all of the shareholder governments. I am saying there ought to be changes at the level of the directorship, even in terms of the share holding positions of the various governments, I believe the shares of Barbados should be diluted because they believe because they have the majority shares that everything must move to Barbados,” he added.
LIAT is owned by the governments of Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines.
Earlier the airline issued a one paragraph statement indicating that it had been made aware of the comments by Prime Minister Browne and that “these matters are currently under discussion amongst the major shareholders”. Gonsalves told a news conference here that statements about the airline “can be demoralizing to the workers, to the management.
“In that context, I want to say that I have not received from any shareholder any information that they do not have confidence in the CEO or the management and I myself I have confidence in the CEO.
“Certainly, the chairman of the board of directors, who I spoke to, I happen to know that he has confidence in the CEO. So, I want to make those points clearly,” Gonsalves said.
Earlier this month, Prime Minister Browne said that his administration would resist efforts to shift the base of the financially-strapped regional airline, to Bridgetown and Prime Minister Gonsalves again defended the decision saying it was made based on the revenue generated and passenger load along LIAT’s routes.
“Now, it is public knowledge that the government of Antigua and Barbuda, through its prime minister, said that they want this restructuring decision to be put on hold. But until a shareholders’ meeting says that those decision must be put on hold, the board and the management are obliged to carry out the decisions of the shareholders. And as chairman of the shareholders, I have received no request from anyone for a meeting of the shareholders,” he said.
Gonsalves, however, said he has received a letter asking that the decision to move the airline’s headquarters be put on hold.
“In the same way that I respect the good governance arrangements in St. Vincent and the Grenadines, I respect the good governance arrangements in a company. That’s the only way that things can be run in a proper manner. I am not saying that these decisions can’t be amended, altered, if other views are brought to the table and they are meritorious in all the circumstances.
“But, from the stand point of St. Vincent and the Grenadines, as I had explained before, if I didn’t feel that they were decisions which were in the interest of the company, I would have demurred at that point of the shareholders meeting and to see if I can convince my colleagues of a different perspective.
“But there was no attempt by anybody to convince anyone of any perspective other than around this bundle of issues on which decisions were taken,” Gonsalves said, pointing out that St. Vincent and the Grenadine has paid its US$592,000 share of the five million dollar working capital the airline needs until a financing meeting with the Barbados-based Caribbean Development Bank (CDB) in May.
“I am hopeful that all the governments will make their payments,” Gonsalves said, adding that he understands that Dominica has paid, he didn’t know if Barbados had paid, but was “pretty sure” that Antigua and Barbuda was yet to pay.
“If the analysis [says] you need this money for the working capital and that is to carry you to the month of May, hoping you can get to the CDC board, any set of dissonance, whether it is by any shareholder, or any group of workers — be they the pilot or engineers or other workers who are neither pilots nor engineers — or the management, any dissonance in words or action can create a great difficulty,” Gonsalves said.
“This is a very serious matter which affects the social and economic wellbeing in this area and I am unable, constitutionally or otherwise, to embrace recklessness on this subject.
“And I hope that by reiteration of confidence in the management and the board and in the light of the decisions which were taken by the shareholders, that any alterations required, there is a process and there is a system for which any of these challenges can be appropriately addressed.
“What is certainly not appropriate is for important discussions to be held on this matter across the Caribbean Sea, which, whether intended or not, may have an effect of undermining confidence in the operations of the airlines,” Gonsalves said.