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Talks with CDB and LIAT 2020 advance with meeting scheduled within a week

The proposed deal involves the sale of three ATR aircraft currently owned by LIAT 1974, facilitated through a loan from the Caribbean Development Bank.

Ambassador Daven Joseph, the Development Commissioner responsible for the negotiations of LIAT 2020 said he has received correspondence from the Caribbean Development Bank (CDB) indicating its willingness to meet to discuss the sale of three ATR aircraft belonging to LIAT1974 facilitated through a loan from the bank.

During an interview on Twin Island Media (TIM), Ambassador Joseph revealed plans for a meeting involving representatives from Antigua and Barbuda, CDB, and LIAT shareholders to finalize the agreement. “There will be a meeting of Antigua and Barbuda, CDB, and shareholders as early as next week for us to finalise this according to the schedule that is suggested by the CDB,” he said.

The former shareholder governments of Barbados, Dominica, St. Vincent and the Grenadines and Antigua and Barbuda owe the bank in the region of $60-$80 million against a “sovereign guarantee”. This means the bank must be paid no matter the outcome of 1974’s operations. Antigua and Barbuda is responsible for repaying 32 per cent of that loan in accordance with its share size.

LIAT 1974 made its last passenger flight on Monday 22 January, ending decades of connectivity throughout the Eastern Caribbean region.

LIAT 2020’s Hurdles and Dependencies for Operation

The start-up of LIAT 2020 is dependent on its ability to first acquire the one functioning ATR and use it to obtain an Air Operator Certificate (AOC) from the Eastern Caribbean Civil Aviation Authority (ECCAA). Currently, only one of the three planes are operational. 

“We’re relying on the government to come through with the one aircraft which is airworthy,” CEO of Air Peace Caribbean Ltd in Antigua, Hafsah Abdulsalam said during another interview on Observer radio.

Air Peace will have to wet lease its three ERJs to 2020 until ECCAA has the capacity to assess its airworthiness. To do that, Director General at ECCAA, Anthony Whittier said airworthiness inspectors and flight operation inspectors will need to be trained on the ERJs which are “new types” to the authority.

The authority’s Airworthiness Advisory Circular (AAC) applies to all aircraft registered in the OECS or is seeking to be registered within that region. 

Those on wet lease will be able to fly, provided that 2020’s owners can provide support staff. But they must have a transition plan that will allow the airline to eventually own those planes – a process that Whittier said is important for the authority to be a part of.

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“Unfortunately, until we are able to secure that aircraft for LIAT 20 then we cannot give a firm date for when we’ll secure the AOC. However, given what we’ve seen so far, we’re quite confident that the negotiations that needs to happen amongst the governments and get the assets handed over, we could see that happening in another two weeks and then from there on we anticipate a maximum of six weeks to go through the remainder elements of the application process and then we’ll be commencing flights immediately thereafter,” CEO Abdulsalam explained. 

As part of what the ambassador described as a “tedious negotiating process,” the company will also have to retain skeletal staff to show that they are operational. 

According to Abdulsalam, job ads are expected to be circulated this week with first preference going to qualified employees of LIAT 1974. “Everyone at ex-LIAT employees has the first option to apply. So, what we sought to do was to advertise the jobs internally first via the LIAT vacancy portal before it goes out to the public,” she told TIM. 

As for pricing, the new entity aims to implement a “highly cost efficient system” that will reflect on the final ticket price.

“We will be price competitive, we will aim to assess the crisis at a level that does not hemorrhage the company. Our job is to strike a good balance where pricing is competitive, ticket fares are competitive but then it gives us enough to be able to run the company and grow it,” said the CEO.  

“Coming in externally, there’s a lot of local, regional understanding, knowledge that we need to gain in time,” she adds, noting that LIAT 2020 is aiming to gain customer trust, retain customers, solidify good customer service including on time performance and schedule integrity, and to ensure the entity remains sustainable and profitable.

Ambassador Joseph, aware of the airport and service taxes from various governments that contribute to high ticket prices, said LIAT 2020 is attempting to liaise with other governments to get a preferential tax regime for inter- Caribbean travel. “This tax regime should see some downward movement in the tax that is associated with the tickets for inter Caribbean travel.”

“Certainly, I will be recommending Antigua and Barbuda even on its own to reduce the level of tax on tickets sold on inbound flights to Antigua and outbound flights to Antigua”.

Much like the old dispensation of LIAT, safety and security she noted is a priority trademark that 2020 plans to honour. 

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The operation of LIAT 2020 is critical for the Caribbean region as it fills a space in air travel that has otherwise, since the Covid-19 pandemic, been hard to fill. 

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