ST GEORGE’S, Grenada, Thursday March 7, 2019 – The Grenada Government says it intends to make a cash contribution to the financially struggling regional airline LIAT by the end of this month.
Minister of Trade, Industry, Cooperatives and Caribbean Community (CARICOM) Affairs Oliver Joseph said the decision was made by Cabinet this week, and comes against the backdrop of agreement by CARICOM Heads of Government at their recent inter-sessional meeting that the Antigua-based airline should be restructured.
The decision also followed a report from Antigua and Barbuda’s Prime Minister Gaston Brown last weekend that approaches would be made to the governments of Grenada, St Kitts and Nevis, St Lucia, and Guyana, which benefit from the carrier, to become shareholders.
LIAT is majority owned by several Caribbean governments, with Barbados, Antigua and Barbuda, St Vincent and the Grenadines, and Dominica being the largest shareholders, owning 97.4 per cent of the airline. Private shareholders and employees hold the remaining shares.
“For Grenada, we have always maintained that we would like to see LIAT continue to serve the people of the region, but in order for us to contribute state resources to LIAT, the airline must be restructured and operated in a manner that ensures sustainability,” Minister Joseph said.
The value of the Government’s contribution is yet to be determined as the Dr Keith Mitchell-led administration is awaiting information from the regional airline.
“The amount of money that we will contribute will be based on the information submitted to us by the LIAT Board, which we hope to receive very shortly, so that by the end of the month, we can make a cash contribution,” Joseph said.
In addition to the cash payment this month, the Government is also willing to pay LIAT additional funds based on load factor.
“If, for example, LIAT is operating a flight between Trinidad and Grenada that is unprofitable, Government will pay to ensure that the airline breaks even on that particular route,” Joseph explained.
The Grenada Government said it is hopeful that going forward there will be a financial turnaround for LIAT.
“If you’re operating a business, you have to ensure that it is sustainable over the long run. We have to ensure sound financial management and reporting from the LIAT Board,” Joseph said, adding that Grenada’s position is that there should be no political interference in the management of the airline.