BASSETERRE, St. Kitts - THE Prime Minister of Antigua and Barbuda, Hon. Gaston Browne, has announced that former Barbados PM Owen Arthur would be the new Chairman of cash-strapped regional airline, LIAT.
The announcement followed the retirement of Dr. Jean Holder as Chairman of the Board of Directors of the airline.
Browne, while speaking on local radio station in Antigua and Barbuda, Pointe FM, disclosed that the decision to appoint Arthur as Chairman was made after he met with regional colleagues Barbados PM Mia Mottley and St. Vincent and the Grenadines PM Ralph Gonsalves.
He revealed that following a meeting with the two leaders several weeks ago, they came to a consensus on the way forward as they were able to iron out their differences.
“I believe that LIAT has a very bright future ahead of it. In fact, a number of changes will be made including personnel changes. You would recognise there will be a new chairman. In fact, former Prime Minister of Barbados Owen Arthur will take over as the new Chairman of LIAT...I don’t think there could be any better candidate,” explained Browne.
With regards to financing the cash-strapped airline, PM Browne confirmed that the four shareholder governments have agreed to do same, as raising capital would be one of the primary issues LIAT faces.
“...so far, all of the existing shareholder governments have agreed to put up sums to recapitalise LIAT. As you know, Antigua and Barbuda will take the lion's share of the new capital or the new share issue, and we will contribute the largest capital at US$15million.”
According to Browne, Dominica has agreed to US$5M as part of its investment, while the others would be chipping in to recapitalise the airline - which is in dire need of cash injection.
Just last year it was reported that the airline needed quick cash injection to keep it afloat since it was without money.
In his interview on Pointe FM, Browne noted that the shareholder governments are looking to raise approximately US$15-$20M to recapitalise the airline.
PM Browne also spoke to the issue of the high airfare and taxes.
“Those high airport taxes basically hypothecate to service debt. In the case of Antigua and Barbuda, our airport taxes are hypothecated to service the airport loan of US$90-$100 million that was granted by Credit Suisse.
“In terms of elasticity, the CDB would have done a report confirming that with the demand for travel and price there is elasticity. So, if we can reduce the price, maybe by 25 percent, that may probably increase travel by probably 10 percent and you may probably break even.”
Despite those options, the PM noted that it comes down to if governments have the fiscal space to give up 25 percent of that revenue.