Business

Air Peace Acquires 70% Stake in LIAT 2020 in Multi-Million Dollar Deal

LIAT (Leeward Islands Air Transport) and Nigeria’s Air Peace have inked a deal that grants Air Peace a substantial 70% stake in the upcoming LIAT 2020.

“We have been working on it for the last eight months and we had reached the point where we felt that we had a good deal with Air Peace Caribbean Limited who is acting on behalf of Air Peace Nigeria,” confirmed Ambassador Daven Joseph, the Development Commissioner heading the negotiations on LIAT 2020. 

The overall investment is US$56 million of which Antigua and Barbuda will invest approximately US$17 million (30%) in-kind. Their in-kind contribution will include three aircrafts currently owned by the shareholders of LIAT 1974 Limited. 

Joseph said LIAT 2020, has successfully negotiated with the government of Barbados who has agreed to sell Antigua the old aircrafts and who will lead negotiations with the Caribbean Development Bank (CDB). He said two weeks ago, in Guyana, Prime Minister Mia Mottley agreed to meet and discuss the sale. “Myself and my team we went to Barbados, and we had negotiations with her chief financial advisor Mr. Ian Carrington upon instruction he received from prime minister Mottley.”

“They agreed with the price of $13 million. They agreed in principle that they would sell us those equipment – the aircrafts – and we are now in discussion with CDB to work out the modalities upon which they will be financed,” he added. 

They also held discussions with the governments of St. Vincent and Dominica to sell the aircrafts to Antigua & Barbuda. “We have agreed, through an independent valuation, that these three aircraft would value US$13 million and Antigua and Barbuda has agreed to purchase those aircrafts through the Caribbean Development Bank.”

All four countries will be working together to strike a deal with the CDB and ask for debt relief to make it more manageable for the governments to repay the loan of LIAT 1974.

Operations which are expected to start sometime next year with one working aircraft from LIAT and three jets (Embraer 145s) from Air Peace as the other two LIAT aircrafts won’t be operational until May 2024.

Two former LIAT airport hangars which the government acquired after the liquidation will also form part of the deal. “The hangars are on government property … any fixed facilities that are on lands that were previously rented to someone, when that time span for rental is over, whatever is on that land belongs to the landlord. So, we have been able to acquire those hangars through that process,” he explained.    

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The proceeds from the sale of the aircrafts will go towards paying back Antigua’s share of the CDB debt from the defunct LIAT. “The $13 million will be divided proportionately between all of the shareholders and Antigua amount would go towards the paying down of Antigua’s debt,” he informed. 

In the meantime, LIAT 2020 negotiators are still in discussion with the Eastern Caribbean Aviation Authority to acquire its airworthiness certificate (AOC). “One of the setbacks that we have is the process of acquiring the ATRs for LIAT 1974 Limited because LIAT 2020 must have a serviceable, workable, operational, aircraft in its arsenal before it can be granted that AOC.” 

Pratt & Whitney, the engine supplier for LIAT 1975 has asked for and has been paid US$150,000 to repair the planes’ engine.

LIAT 2020 Competition

LIAT 2020 will have competition from other regional airlines namely Caribbean Airlines Limited (CAL), who recently announced its expansion into the Eastern Caribbean. 

The airline will also have to contend with a new airline being mulled over by the former government shareholders of the defunct LIAT. “That is still there on the table but we have had their full support with regards to LIAT 2020, ” Joseph said of the new airline.

He welcomed the competition and said LIAT will ensure that it provides the best service for Caribbean travellers. “You’re going to see a new LIAT 2020,” he declared.

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