The shareholder governments of the regional airline, LIAT, yesterday signed a US$65 million loan agreement with the Barbados-based Caribbean Development BanK (CDB) as the cash-strapped airline seeks to upgrade its ageing fleet.
The loan represents 61 per cent of a US$100 million re-fleeting exercise being undertaken by the Antigua-based regional airline that is replacing its Canadian Dash 8 fleet with French-made ATRs.
Barbados, LIAT’s largest shareholder, takes up the bulk of the loan–US$33.2 million–while Antigua and Barbuda put up US$21.9 million, St. Vincent and Grenadines US$7 million and Dominica US$2.4 million.
But each shareholder will provide the funds to LIAT on the same terms it received from the CDB, with the airline responsible for repaying the loan over a 13-year period, following a two-year grace period.
The signing ceremony comes against increased criticism of the airline by the travelling public in recent months with long delays, numerous cancellations and lost baggage being the order of the day.
LIAT chairman Jean Holder apologised for the hiccups, assuring that positive change is coming with the airline’s re-fleeting exercise.
Barbados Prime Minister Freundel Stuart said his government had no problem coming to the table to assist LIAT, since it is not possible to contemplate a region without the airline, despite the frustration expressed by the travelling public.
“Barbados has a vested interest in the easy movement of people in this region…because Caricom is our third largest source market for tourism. So, we cannot contemplate a region without the services of an airline like LIAT.
“I don’t know of any other airlines prepared to do in this region what LIAT has done since 1956, in one form or another. Therefore, the Government of Barbados, over which I preside, had no difficulty in lending its consent to the securing of this loan,” he stated.
Stuart said that Barbados remains committed to LIAT’s cause.
“That does not mean that from time to time we too may not have to comment in ways that might make LIAT uncomfortable. But, that is not to be interpreted as any reneging from our commitment to ensuring that this regional airline maximises its opportunities and provides the kind of service to this region which they so richly deserve,” he added.
President of the Caribbean Development Bank, Dr. Warren Smith, stressed that reliable and efficient regional air transport is an indisposable undertaking of Caribbean development.
He said LIAT’s contribution, according to figures, shows the airline’s direct impact is estimated in excess of US$320 million.
Smith also reported that LIAT contributed an estimated US$63 million or 39 per cent of average long stay arrivals to the Caribbean.
But he pointed to significant challenges facing the aviation sector and stressed the need for Caricom leaders to revisit the issue of a regional air transport policy.
St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves, who is also chairman of LIAT’s shareholders, anticipates the modernisation of aircraft together with improvements to the airline’s operations will lead to an overall improvement in the financial operations and efficiency of the airline.
He said that LIAT has already set its sights on spreading its wings.
Source:CMC
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