CMC – Antigua and Barbuda Prime Minister Gaston Browne says his administration is pushing ahead with plans to launch the inter-regional airline LIAT 2020 by November this year and remains hopeful that other regional countries will participate in the new venture.
“We will always have differences, at the end of the day we will come to some synthesis of ideas and we will move forward and come to some consensus. So I remain hopeful that at the end of the day we will find a solution to provide a sustainable regional transportation for the people of the OECS and the broader CARICOM region,” Browne said on his weekend radio programme.
Browne said that LIAT (2020) , for which his administration had already indicated that it is prepared to invest between US$15-20 million in the new venture, is seeking to negotiate an agreement with the principals of Air Peace, a private Nigerian airline founded in 2013, “for the purpose of establishing a governing agreement between both carriers”.
The development comes as St. Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves last Tuesday said he had received a document from the Barbados-based Caribbean Development Bank (CDB) outlining a proposal for the financing and operation of a regional airline.
Gonsalves told a news conference in Kingstown that the initial owners of the airline could be the governments of the Organisation of Eastern Caribbean States (OECS) “but we would have to engage the Caribbean Development Bank on this exercise too.
The OECS groups the islands of Antigua and Barbuda, Dominica, Grenada, St Lucia, St Vincent and the Grenadines, St Kitts and Nevis, Montserrat, Anguilla and the British Virgin Islands.
Gonsalves said that while the location for a headquarters for the airline hasn’t been discussed, he was “offering” St Vincent and the Grenadines as one of the options.
Caribbean countries have hard hit by the collapse of LIAT (1974) that entered into administration in July 2020 following increased debt and the impact of the coronavirus (COVID-19) pandemic.
The airline is owned by the governments of Antigua and Barbuda, Barbados, Dominica and St Vincent and the Grenadines, and while the Barbados and St. Lucia governments have made available funds to cover the three-year outstanding debt to the workers in their countries, that has not been the case with employees in the other islands.
Browne told radio listeners that he has no intention of “giving up” on LIAT 2020 domiciled in Antigua “and that would continue to provide jobs and to export aviation services to the region.
“We could not get the other countries in the OECS to join us, some speculated that…if they invested in LIAT 2020, the creditors of LIAT 1974 would go after LIAT 2020, we said to them that are separate legal entities and there is absolutely no basis in law in which creditors of LIAT 1974 could pursue4 LIAT 2020 as a new limited liability company”.
Browne said that there have been instances both in the region and the United States where companies had gone into liquidation and formed new companies just as LIAT 2020 is being established.
“I find that there is some dis-ingenuousness within the region for which some of the heads are arguing that this new entity will automatically be liable for LIAT 1974 Limited liabilities. That’s not the case,” he insisted, adding “some of our heads are lawyers and they know better”.
“LIAT 1974 is completely different from LIAT 2020. They are two different entities. I just want to clear that issue,” he said, adding “LIAT 1974 will be placed into liquidation, the assets of LIAT 1974 will be bought by LIAT 2020.
“So having given full market value for the assets, we intend to buy the planes as well. LIAT 1974 or its creditors can make any claim on LIAT 2020 Limited.
“We tried to get the other OECS countries and possible Barbados interested. They have not committed. We still remain hopeful that sometime down the road they will come with us but then that forced us to go to form a partnership Air Peace and Air Peace agreed to take up 70 per cent of the shares and to make some assets and cash available”.
Browne said that there had been some concerns regarding a major partner of Air Peace who had been indicted by the United States for money laundering in the purchase of planes.
”There is no evidence of that to date. He has not been convicted of anything. But in any event, he is not the entity who will be a director in LIAT 2020,” Browne said, noting that there are two other directors of Air Peace.
But he said the government here is ensuring that the person indicted in the United States does not gain any directorship in the new company.
“So we are ensuring that there’s no governance breaches,” Browne said.
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Regarding the efforts to establish the new airline in the Caribbean by OECS government, Browne told radio listeners, he understood that Prime Minister Gonsalves is pushing for it to be headquartered in Kingstown.
“The population centre does not dictate where the headquarters should be. It dictates the more traffic that you get. So if the demand for seat in that area is greater, then obviously you are going to put more flights in the southern Caribbean than in the north and that is precisely what happened in the past.
“But it does not negate having the headquarters here in Antigua and Barbuda which we have enjoyed for over 40 years. So why make the case for moving it when you probably don’t even have the infrastructure in place to service the headquarters.”
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