Prime Minister Gaston Browne of Antigua and Barbuda says his administration is pushing ahead with plans to launch the inter-regional airline LIAT 2020 by November of this year, and he is hoping that other regional countries will join the new endeavor.
“We will always have disagreements, but at the end of the day, we will reach some synthesis of ideas and move forward to reach some consensus.” So, at the end of the day, I remain hopeful that we will find a solution to offer sustainable regional transportation for the people of the OECS and the wider CARICOM region,” Browne stated on his weekend radio show.
Browne stated that LIAT (2020), in which his administration has already indicated a willingness to invest between US$15-20 million, is attempting to reach an agreement with the principals of Air Peace, a private Nigerian airline founded in 2013, “for the purpose of establishing a governing agreement between both carriers.”
The news comes after St. Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves announced last Tuesday that he had received a paper from the Caribbean Development Bank (CDB) in Barbados proposing a plan for the financing and operation of a regional airline.
Gonsalves told a news conference in Kingstown that the airline’s first shareholders may be the governments of the Organization of Eastern Caribbean States (OECS), but that “we would have to engage the Caribbean Development Bank on this exercise as well.”
Antigua and Barbuda, Dominica, Grenada, St Lucia, St Vincent and the Grenadines, St Kitts and Nevis, Montserrat, Anguilla, and the British Virgin Islands comprise the OECS.
While the location of the airline’s headquarters has not been addressed, Gonsalves stated that he is “offering” St Vincent and the Grenadines as one of the choices.
The collapse of LIAT (1974), which entered administration in July 2020 as a result of growing debt and the impact of the coronavirus (COVID-19) pandemic, has affected Caribbean countries severely.
The airline is owned by the governments of Antigua and Barbuda, Barbados, Dominica, and St. Vincent and the Grenadines, and while the governments of Barbados and St. Lucia have made funds available to cover the three-year outstanding debt to employees in their respective countries, the same has not been done for employees on the other islands.
Browne informed radio listeners that he has no intention of “giving up” on the Antigua-based LIAT 2020, which will “continue to provide jobs and export aviation services to the region.”
“We were unable to persuade the other OECS countries to join us; some speculated that…if they invested in LIAT 2020, the creditors of LIAT 1974 would go after LIAT 2020; we told them that are separate legal entities and there is absolutely no legal basis in which creditors of LIAT 1974 could pursue4 LIAT 2020 as a new limited liability company.”
Browne stated that corporations in the region and the United States have gone into liquidation and formed new companies at the same time that LIAT 2020 is being founded.
“I believe there is some deception within the region, as some of the heads argue that this new entity will be automatically liable for LIAT 1974 Limited liabilities.” That is not the case, he insisted, adding that “some of our heads are lawyers, and they know better.”
“LIAT 1974 is not the same as LIAT 2020.” They are distinct entities. “I just want to clear that up,” he stated, adding, “LIAT 1974 will be liquidated, and the assets of LIAT 1974 will be purchased by LIAT 2020.”
“So, after paying full market value for the assets, we intend to purchase the planes as well.” LIAT 1974 or its creditors have the right to file any claim against LIAT 2020 Limited.
“We attempted to entice other OECS countries and possibly Barbados to participate.” They have not made a commitment. We are still hopeful that they may join us at some point in the future, but this pushed us to form a partnership with Air Peace, and Air Peace agreed to take up 70% of the shares and make some assets and funds available.”
Browne stated that there had been some concerns about a significant Air Peace partner who had been indicted by the US for money laundering in the procurement of planes.
“There has been no proof of that to date.” He has never been convicted of any crime. But, in any case, he is not the entity that will be a director in LIAT 2020,” Browne added, stressing that Air Peace has two other directors.
However, he stated that the government here is guaranteeing that the person indicted in the United States does not become a director of the new firm.
“So we’re making sure there are no governance violations,” Browne explained.
Regarding the OECS government’s plans to develop a new airline in the Caribbean, Browne told radio listeners that Prime Minister Gonsalves is pushing for it to be headquartered in Kingstown.
“The population center does not determine where the headquarters should be located.” It determines how much traffic you receive. So, if there is a higher demand for seats in that area, you will clearly put more flights in the southern Caribbean than in the north, and this is exactly what has happened in the past.
“However, it does not negate the fact that we have had our headquarters in Antigua and Barbuda for over 40 years.” So why argue for relocation when you don’t even have the infrastructure in place to service the headquarters?”
