Fri 3rd Jul 2020
If you keep giving a drug addict drugs, they will continue to rely on drugs.
The relationship between LIAT and its shareholder governments has mirrored that of a drug addict and their drug dealers. For decades, LIAT has been managed poorly and been a financial failure. LIAT has been running in to debt for decades and for decades, its shareholder governments have been pumping millions of dollars in to LIAT to cover LIAT’s debt.
LIAT has never bothered to properly restructure, run efficiently and create a profit, because LIAT has always known that when it needed a quick ‘fix’, its shareholder governments would supply a ‘fix’. LIAT has been addicted to bailouts for decades and its shareholder governments have been happy to waste taxpayers’ money to satisfy LIAT’s addiction whenever LIAT wanted it.
LIAT has never been forced in to rehabilitation to get off their bailout addiction and it is no surprise now to hear that LIAT will more than likely be liquidated and collapse, again! LIAT’s shareholder government must take responsibility for LIAT collapsing, because they have failed to force LIAT to operate in a manner that would create a profit.
The prime ministers of these shareholder governments must be held accountable for the incompetent governance of LIAT. It was reported that in all of 2019, LIAT made a loss of about EC$12 million. Even without COVID-19, LIAT was failing and in debt.
Wrongful trading is a serious offence which is punishable by law. Wrongful trading is when the directors know that the company is insolvent, they know it will not be a temporary state and they have no way to pay the debts they owe their creditors. Wrongful trading could also be proven if the directors wilfully allow the amount of debt to increase whilst they are trading. There are statutory rules and regulations that deem wrongful trading unlawful.
Whatever happens next, if LIAT reforms or a new airline is created, governments must not subsidise this new entity. Governments must not create a new addict that is addicted to bailouts.
Whatever new entity is created, it must be set up properly so that it runs in a financially efficient manner and creates a profit. The new entity must be run as a private company and funded by money from private investors. The new entity will only run well if it knows that it cannot become addicted to government bailouts.
It would be unacceptable to the taxpayers’ of LIAT shareholder government, for these governments to continue to wastefully throw away millions of dollars of taxpayers’ money on another poorly run airline. Gonsalves must stop wasting millions of dollars SVG taxpayers’ money propping up LIAT or any other airline. It’s like throwing money down the drain.
Thousands of households in SVG live in poverty, without mains water and electricity, and with their children going to bed hungry. SVG taxpayers’ money should be helping these poor households. The poor of SVG should not be neglected, so that Gonsalves can waste taxpayers’ money subsidising the air travel of the rich.
It was reported that one of LIAT’s shareholder government said that “the new airline will be much leaner than the current LIAT… But if you are going to have a new entity that is scaled down, that is viable, that is efficient, that can meet the connectivity needs of the Caribbean people, then clearly that has to be the option that we pursue.”
Why on earth is this being said now? This should have been said over 40 years. LIAT needed to be leaner, efficient and viable 40 years ago. It is ludicrous that this is only being said now, in 2020.
LIAT has been in crisis and utter financial chaos for decades, even though LIAT has had a virtual monopoly on regional air travel in the Caribbean. This is because LIAT’s shareholder governments have been incompetent and continually failed to tackle the real problems within LIAT.
It was reported that the Prime Minister of Antigua and Barbuda, Browne, said the formation of the new entity must be done swiftly. This is wrong. The formation of the new entity must be done properly. It would be foolhardy to rush to create a new entity and that new entity turn out to be as bad as, or worse, than LIAT. The new entity must be financially sustainable.
Warrant Officer Ivan O’Neal, BSc (Hons) MSc, MBA says that LIAT has been in debt for decades and addicted to government bailouts for decades. It is time to stop the addiction. The new entity must be a privately funded company.