The financially strapped regional airline, LIAT, has announced plans for a voluntary separation package (VSEP) that could result in more than 150 employees being removed from the company’s payroll.
Chief executive officer David Evans said LIAT will embark on a process of cost reduction right across the airline, but that will also include a reduction in the number of people that they employ in the business. “We will embark upon that process in full consultation with our staff themselves, and also their representatives. We would wish to achieve these reductions, where possible, on a voluntary basis and that will be our aim,” added Evans.
Chairman of the shareholder governments, Prime Minister Dr. Ralph Gonsalves of St. Vincent and the Grenadines, speaking at the end of a meeting in Bridgetowm, Barbados, said the plans were to reduce the airlines debt significantly.
He said it would involve reducing the staff number from 800 to about 620, “which should save LIAT about EC$13 million per year. But of course, they will have to pay the severance cost of about EC$22 million.
The meeting was also attended by host Prime Minister Freundel Stuart and his Dominican counterpart Roosevelt Skerritt and Antigua and Barbuda’s Minister of Public Utilities, Civil Aviation and Transportation Robin Yearwood.
Prime Minister Stuart said the change in strategic direction is welcomed by Barbados. “We expect to see a turnaround in LIAT’s fortunes, more responsiveness to market messages and, of course, once the whole issue of fleet renewal is complete and the disposal of the seven remaining Dash 8 planes and the reduction in the head count is complete we think that LIAT will be on a much more viable and sustainable footing,” said Prime Minister Stuart.
Evans said the airline had no choice but to trim its workforce given the fact that it is spending an estimated 27 per cent of revenue on staffing. “We hope to come out of this process at the end of the year, leaner, fitter, more responsive to the market and, most importantly, more responsive to our customers,” he said.
Gonsalves said the airline was also in need of an immediate cash injection to help stabilize its finances, and had approached the Barbados-based Caribbean Development Bank (CDB) for assistance.
CDB is already providing US$65 million to finance the re-fleeting exercise of the airline.
LIAT’s chairman Jean Holder said that the inability to dispose of its retiring seven Dash 8 aircraft is also costing it about US$11 million annually.
He said a “weakening market” for the planes among the reasons for being unable to offload the planes.
LIAT announced that it would re-locate four of the airline’s new ATR aircraft at the Grantley Adams International Airport in Barbados, while Antigua where LIAT is headquartered will have two. The remaining two aircraft will be based in Trinidad.
