Submitted by Robert MacLellan
Ian Brunton, CEO of LIAT
On 28 August LIAT’s CEO, Ian Brunton, talked to Caribbean media and finally acknowledged in public some of the real facts behind the airline’s chaotic operations over the last three months. He also described LIAT’s worrying current financial position, in the same month that the airline has taken on a US$65 million loan from the Caribbean Development Bank to fund new aircraft.
However, it was reported that Mr Brunton has refused to have an investigation to hold people accountable for the recent chaos at LIAT. Instead, he said he will organise a “post mortem” (an unfortunate phrase) on what went wrong and use this to reward staff who have performed well during the crisis. Those who “dropped the ball” would be identified for “counseling or better training”.
This statement represents an unbelievable level of arrogance on the part of LIAT senior management and conveys gross disrespect for its customers! Ignore the widespread calls across the Eastern Caribbean for senior management resignations or dismissals at the airline. Instead, LIAT institutes some counseling and better training – presumably, for middle level and operative staff only? No personal responsibility accepted or culpability acknowledged on the part of LIAT’s Chairman, the CEO or the Director of Commercial and Customer Experience – all of whom have presided over three months of disastrous operations across the Eastern Caribbean and an equally disastrous public relations / communications exercise.
Ignore the huge inconvenience and, in some cases, trauma caused to a high percentage of LIAT’s customers consistently over three months. Ignore the great damage done by LIAT’s management to the general economy of the Eastern Caribbean and to prospects for future inward investment. Ignore the negative impact on the region’s reputation as an international tourism destination. Ignore the damage done to LIAT’s management / staff relations. Ignore the potentially fatal damage to LIAT’s own future viability.
Most people agree that the Eastern Caribbean desperately needs LIAT but, going forward, LIAT desperately needs directors and senior management who will take responsibility and who can drive a “low cost airline” strategy that will truly serve the region and not stagger from one financial crisis to another. Success at LIAT is not just about new larger aircraft, future success is about running a marketing led business, with higher passenger volumes and an efficient cost structure.
The latest LIAT management focus appears to be on better future complaints handling, rather than on more useful market research as to what LIAT’s current customers, and potential customers, need and how much they are prepared to pay. With that data, LIAT can strategise how to deliver the right service at the right price to their larger market that existed several years ago. This may involve the airline reverting to code sharing some routes with other Caribbean carriers because the LIAT route network, as currently operated, is not viable without a substantial increase in overall traffic. Across much of the world, airline passenger numbers are rising strongly but at LIAT they have dropped.
In the 2013/14 financial year, LIAT is increasing its already substantial debt by at least US$65 million dollars and yet Mr Brunton reported a 10% (US$30 million) decline in 2012/13 revenue against 2011/12 results. He further stated that company expenses, related to stranded passengers during LIAT’s recent busiest summer months, will have wiped out profits for that period this year. Clearly, this will have a harsh negative impact on LIAT’s 2013/14 results and will likely necessitate a significant early re-write of last year’s strategy plan and the related medium term financial projections for the airline.
The point is LIAT’S PROBLEMS ARE NOT OVER YET. A continuation of the current LIAT management style will not increase revenue, will not attract new equity investors and is not going to achieve the positive financial results necessary to cover the airline’s future higher levels of debt service, associated with funding the new aircraft. That vicious circle in LIAT’s historical business model needs to be broken now and, as recent events so clearly prove, this can only be achieved with fresh new expertise at board director and senior management level.
Notes.
Robert MacLellan is Managing Director of MacLellan & Associates, the region’s leading hospitality consultancy since 1997. He is a Fellow of the Institute of Hospitality, a Member of the International Society of Hospitality Consultants and has a Masters Degree in International Hotel Management.
For further information contact Robert:
If there is anyone out there with documents in their possession which can give the public an insight into how LIAT has been (mis) managed over the years please email us e.g. board papers, financials etc at Barbados Underground.
DHTA writes to PM Skerrit on LIATDominica News Online – Thursday, September 5th, 2013 at 11:25 AM
The Dominica Hotel and Tourism Association (DHTA) has written to Prime Minister Roosevelt Skerrit regarding its concerns over regional airline LIAT.
The DHTA said it is concerned over “the large number of flight cancellations, delays and re-routing of flights; the absolutely dismal customer service that has been meted out to the travelling public; and responses from the LIAT hierarchy to complaints and concerns raised by affected customers which have left much to be desired.”
The organization said Dominica has been hard hit by the LIAT crisis “because of its inordinate dependence on LIAT for its arrivals.”
It said major events such at the upcoming World Creole Music Festival and the Independence Celebrations could be affected if LIAT does not get its act together immediately.
The DHTA, in its letter, also outlines some suggestions for “corrective action and recovery.” The Association is requesting that the Eastern Caribbean Central Bank and the Economics Division of the OECS Secretariat should be commissioned to research and publish the impact of the LIAT crisis on the ECCU economies.
“Secondly, and commencing without delay, there should be an investigation of the LIAT management’s decisions,” the DHTA advises in the letter. It also suggests among other recommendations, that “Dominica should move assiduously to have consumer protection legislation, with appropriate penalties and enforcement mechanisms, enacted in the countries of the OECS.”
Dominica recently became a shareholder in the regional airline.
Read full letter below.
Some initial thoughts on this post:
1. “Most people agree that the Eastern Caribbean desperately needs LIAT”
This is the false view that the governments keep selling to make a case for LIAT. The reality is that we actually need to open the market / skies to other carriers and faze LIAT out. Any new entrant cannot compete with a bankrupt carrier that is funded by governments. This is why many have come and gone over the years – unfair competition and lack of support from the various governments.
The governments will say the bigger islands need to support the smaller islands as they do trade etc with them and that having the air link will help their bigger countries to business and at the end of the day help movement of people. But in reality if LIAT was not there and we had open skies new carriers would fill the void once there was traffic on the route. You may not get as much frequency but you will get service. Why are we trying to support routes that don’t make sense?
A perfect example would be what happens in St. Vincent with their smaller carriers that service the smaller islands. It would happen and they would grow (as well as new startups once they could see not having to compete with LIAT).
2. “LIAT desperately needs directors and senior management who will take responsibility”
This is 100% correct. The management team there needs to be replaced starting from the Chairman down. A lot of staffing there is also to maintain governments of the Caribbean employment figures especially Antigua.
3. “who can drive a “low cost airline” strategy”
LIAT cannot be a “low cost carrier”. It is the biggest hullabaloo that makes no sense by their management team who really do not understand aviation (it appears). Low cost airlines offer service in airports that have a lower cost structure so they can save money – the Caribbean islands really only have one airport in most islands owned by the same person, so they will never see savings here. They really have done nothing in the background to change their way of doing business regarding staffing – where the real costs are.
In reality the average cost of an airline ticket in 2007 was around US$170.00 to travel around the region – now it is around US$400.00 plus – WHERE IS THE LOW COST STRATEGY THERE.
This has been another pull the wool over the people of the Caribbean’s eyes so that we can spend a lot of money on bad management, too many employes and reckless use of our money.
How do we hold the shareholder governments accountable?
Where is the business plan which the Caribbean Development Bank recently used to advance 65 million US dollars?
The other issue here which must be discussed dispassionately (devoid of insularity) is if LIAT is so important to their economies why are they not all equity partners?
It is easy to be a national of Barbados or Antigua and discard LIAT as a regional carrier – we don’t need LIAT because we have direct international services of our own, including Caribbean Airlines.
But as the recent LIAT meltdown showed, LIAT is critical as an inter-island bus service, not just for goods ansd services but also for a growing tourism market.
One way many people look at exiting LIAT is combining LIAT and CAL, but T&T’s true intention has already been made public, were that to happen… any route which was not economic (profitable) would be cut. And that would effectively destroy the economies of several islands – and not just the ones which were cut, but would also affect the ones which did trade of any kind with them.
Inter-island, yes, LIAT is an essential service – which benefits Barbados and Antigua with the exchange of traffic going to and from the other islands. But nothing will change at LIAT as long as it continues to be treated as a political plaything where favours are returned and economics are not taken seriously.
LIAT was never intended to make a profit but to at least break even. Between the politics, feather-bedding, incompetence and lack of leadership LIAT has fallen far from that objective, and the continued abuse of the employees at every level, especially in the front line where the company meets the customer, does not help at all.
LIAT’s Board has historically always been comfortably settled by yard fowls and political favourites, yes-men who have no clue what they are doing at an airline and just voting as they are told to by their masters. The Board needs to be composed of people who know aviation, who know airlines, cannot be bamboozled by management and have the intelligence and innovation to effect serious change. Simply swapping the incumbents for more yard fowls achieves nothing.
The Chairman, for instance, claims he is an aviation expert, has actually written at least one book on the subject, to the acclaim of regional politicians, yet not one of them could tell you the difference between slipstream and bleed air. He also resigned more than two years ago, but is magically still there.
I have been in and around Caribbean aviation for 40 years, and been trying to help change aviation in LIAT and Barbados for the past 15 years, and my nose is well bloodied from the doors slamming in my face.
But with the “meltdown” I am no longer willing to “play fair” and/or stay on the traditional controlled road. I have mounted a FREE on-line Petition which I ask every reader to read and sign, if you agree with it – and even if you only agree with a part of it.
Every signature sends three emails, one to each of the three majority shareholder Prime Ministers. If we can put 1,000 emails (or more) into each of those e-mailboxes we may have the start of change, expressed directly to the PMs by the travelling public WORLDWIDE.
https://www.change.org/en-CA/petitions/petition-from-the-travelling-public-to-the-owners-of-the-caribbean-airline-liat
PETITION FROM THE TRAVELLING PUBLIC TO THE OWNERS OF THE CARIBBEAN AIRLINE LIAT
There are so many things that I do not understand as to why LIAT got into this current mess, which is going to require gargantuan measures to possibly recover. Among the questionable decisions are:
1) Choice of aircraft. The Q400 is faster, therefore allowing more flights per day, higher seating capacity, greater range (allowing them to actually service some of the new routes discussed) and would NOT have required extensive pilot retraining. Why chose the ATR’s?
2) A new engine for one of ATR72-600’s, taking a week to fit, even though only in service for a few weeks. Explain!
In an email response from Pratt and Witney, even they pointed out it was highly unusual.
3) The decision to charter an aircraft to ferry the President of Taiwan, even though the largest shareholder (Barbados) does NOT diplomatically recognise the ROC. Therefore possibly prejudicing the decision to get the People’s Republic of China to finance and re-open our largest hotel and putting 500 plus people back to work.
The ROC Government owned China Airlines and its subsidiary Mandarin Airlines operates over 80 aircraft including, 8 – ERJ 190’s (104 seats) which could have done all that was required by the chartered LIAT aircraft, with perhaps the single exception of the current SVG airport (runway length).
Was this simply grand standing by certain Caribbean Government leaders?
1) Choice of aircraft.
I have a theory, not too far-fetched, that Brunton was planted by CAL to bring LIAT home in a box. First, his CEO seat at CAL has not yet been filled permanently after more than two years, and second, he’s doing a damned good job at devaluing LIAT in the eyes of the shareholders – after buying the same disastrous type of aircraft that Brunton himself chose when he was CEO at CAL.
Now that the shareholders have pumped in another $65 to $100 million US dollars I am sure CAL would be happy to have the extra airplanes without having to pay for them.
2) A new engine for one of ATR72-600′s, taking a week to fit, even though only in service for a few weeks.
The new CEO insisted on getting a new engine from P&W direct, and waiting for it, no matter how long it took to do the paperwork.
In the past LIAT and CAL have temporarily “borrowed” engines, propellers and all kinds of other parts while waiting for spares to arrive, and the LIAT engineers and Brunton himself would have known that, yet LIAT decided to wait. As for the Board, how exactly could they have been involved, they know nothing about airlines or aviation.
See my theory above.
3) The decision to charter an aircraft to ferry the President of Taiwan
Same as the decision – in the middle of a meltdown with passengers already stranded – to accept the sports teams on a guaranteed travel basis. Yes, LIAT’s service got them where they were going, but the CEO’s actions increased the number of stranded passengers from hundreds to thousands.
See my theory above.
So read and sign the FREE Petition… the only way we are going to make an impression on our so-called “leaders” to stop the politics-as-usual is to hammer them with demands.
Each signature on this Petition sends an email to each of the three majority shareholder Prime Ministers. If they still do nothing after 1,000, 5,000, 10,000, 100,000 emails in their mailboxes then they will never do anything.
But if we do nothing on our side then by default we accept the status quo, and we deserve the incompetent Board, management and God-awful service the islands are getting now (and have been getting for decades).
AS WELL AS the handing over of LIAT to T&T/CAL for a nominal TT $1.
Read and sign the Petition. It’s good for you.
The beginning of changing LIAT MUST start at the top. Political appointees and those who know nothing about aviation are no longer good enough to lead and innovate. The current Board – apart from Gatesworth James – fall directly into this PROVEN USELESS category. We need people with REAL qualifications and/or experience in aviation to lead the airline into the future, let us stop this incompetent and irrelevant nonsense. And the Chairman resigned two years go – SEND HIM HOME NOW!!
Hopefully the Barbados government; the largest shareholder, plans to disrupt how business is usually done at LAT.
Reason for Choice of Aircraft
THE FRENCH PAY THE BIGGEST BRIBES.
“Hopefully the Barbados government; the largest shareholder, plans to disrupt how business is usually done at LAT.”
My Petition is the result of 15 years of trying to change civil aviation in and trying to communicate with politicians in Barbados. I even have Fumble’s cell phone number, and he will not communicate with me… so if you are waiting for Fumble to act, don’t hold your breath.
I am hoping the flood of emails from this Petition will at least wake his sorry ass up.
Sign the petition… wake up a PM. He has already slept for five years, that’s way long enough.
I am sick of this shyte – aren’t you?
@James
Unfortunately, Barbadians are rather docile. Not the most ardent advocates of anything you will find.
LIAT is a mess ,, Liat should be put on the auction bloc. a financial disaster with no end in sight, asking govts to remove fees and taxes not going to happen the airline cannot survive without these fees and taxes in effect that would be the end of liat.
@ac
If you do not understand the fee structure why don’t you ask? The taxes included in the ticket are levied by respective governments to generate revenue for them and not LIAT.
Which since LIAT is in part owned by govt it would only reasonable. for govt to redeposited some of the revenue to help LIAT. u could talk a all u Like liat is beyond any one controls it failures are not only because of poor mangement but as a finacially strapped enterprise no new manangement can effectively hold and control the reigns .in as much as i agree with much of what James comments. LIAT is an enterprise which govt should never had been bought into. with failures beyond repair.
@ac
Even when you are on a slippery slope you ignore a lifeline. So let us follow your illogical argument. Barbados, Antigua, St.Vincent and of late Dominica are the only LIAT shareholders, what about the other 10 + countries serviced by LIAT? Why has the Barbados government agree to take on the most of the 65 million USD debt to purchase new planes? What does it say about government policy?
Slippery slope emphasis the reality that has engulfed the all but doomed airline. another misguided lifeline albeit to due with political pressure which in the end will cost taxpayers billions of dollars to no avail. what can be salvage of this doomed airline should be put on the auction block.the ten other countries only interest is to reap the sweets generated by tourism .while the other giovts reap te fall out
@ac
Your last comment again demonstrates you are clueless about this matter.
@David
ac…
Your last comment again demonstrates you are clueless about this matter
***********
SIGH!!!…
When will it sink into your brain that ac is clueless about ALL matters… Why do you think MR ac gone long to Arizona…?
Give it a rest David.
According to media reports, LIAT has an ‘accumulated deficit of EC$344 million (about US$127 million) at the end of 2012’. How is the company going to trade out this deficit and what is the plan? Of course you have to add the further losses caused in 2013 with the ‘meltdown’.
@Adrian
LIAT has four shareholders to provide financial support of which Barbados is the largest. It makes one wonder what were the factors which convinced the Stuart led government to cosign the CDB loan.
David, Sadly I have no idea. I can imagine if LIAT was a private sector company and it went to a commercial bank with its past track record, would any of them provide a loan? Does anyone know what were the terms the CDB loan (interest rate and loan period)?
Adrian
It becomes clear if you listen to Prime Minister Ralph Gonzales that it is not the intention for LIAT to use a model to make profit, just breakeven. It cannot be profitable flying to Nevis, Anguilla and a few other destinations. It is clear the shareholders see LIAT’s role as a vehicle to promote regional integration. Caricom if it is to come to life affordable regional transportation is a must.
David,
I am sure you are right, BUT with the right plan it could be profitable to fly in to Nevis (Four Seasons) and Anguilla. Now CariCom and that organisation working within in the same sentence is another story.
The other day I heard that a flight from Dominica to Barbados had just 18 passengers and that may be part of the problem.
Here is that link on the CDB website which gives a cursory description of the 65 mil deal and he CDB/LIAT relationship.
http://www.caribank.org/events/regional-governments-sign-off-on-usd-65-million-loan-agreements-for-liat
@Adrian
We all heard CEO Brunton agreeing with you on VOB that LIAT’s load factor is a problem.
Does anyone know why the hell Jean Holder is still Chairman of the board of LIAT having resigned several months ago?
bush tea why u always sticking uh nose up everybody ass,hole. this is a free and open democratic socirty and wether u agree or not entilement rules the day , BBE ain;t got nuttin for u to do, miserable ole goat,
LOL @ ac
“BBE ain;t got nuttin for u to do, miserable ole goat,”
*****************
That is exactly what the bushman is doing….spreading salt.
BBE said that bushmen should be the salt of the earth.
..Um ain’t Bushie’s fault if you ac is a slug…. LOL Ha Ha. 🙂
…does it hurt?
@bush TEA
LOL u ole BOAR….
DAVID @ ac Sept 7 2013 6.47am
If you do not understand the fee structure why don’t you ask? The taxes included in the ticket are levied by respective governments to generate revenue for them and not LIAT.
here is what Ian burton said about the fees and taxes
The CEO said he sympathised with governments that need the revenues to run the air travel infrastructure, but a new collection model needed to be devised.
.so now David are u going to say that Burton is wrong in reference to where they money goes from the collection of fees , however when ac said the same read what was your response, maybe you can ask bush tea for advice on this matter, the ole bull dog is an expert on everything,
ac sept 7 2013 6.37am
LIAT is a mess ,, Liat should be put on the auction bloc. a financial disaster with no end in sight, asking govts to remove fees and taxes not going to happen the airline cannot survive without these fees and taxes in effect that would be the end of liat.
@ac
The last word is yours.
What on earth would you auction – the debt?
ac | September 8, 2013 at 8:33 AM |
“LIAT is a mess ,, Liat should be put on the auction bloc. a financial disaster with no end in sight, asking govts to remove fees and taxes not going to happen the airline cannot survive without these fees and taxes in effect that would be the end of liat.”
Don’t you, ac, listen at all to “Commonsense” even when it is shouting right in your ears? What do you mean exactly by “the airline cannot survive without these fees and taxes”?
As was pointed out to you so many times before the airline is only a ‘tax collecting’ agency for the various governments in the region which LIAT services.
Do you understand that? Maybe if you see LIAT in the same light of the various businesses in Barbados which collect the VAT from customers and are legally bound to pass it on to the VAT Department of Customs & Excise.
Your point would have been better made if you had argued that the same airline cannot survive without subsidies, especially from the Barbados government, which in most cases are paid from the same taxes and fees collected by LIAT on behalf of the various governments.
One of, if not the biggest, problems facing LIAT is its overmanned costly parasitic Head Office in Antigua with more managers for such a small airline than Virgin Atlantic. Direct your criticisms there and your arguments would make more sense as compared to the foolishness that LIAT levies taxes willy-nilly.
But before you take David’s advice and have the “last word” here is a question for you: Why don’t you direct your critical advice of putting LIAT ‘on the auction block’ to your DLP administration especially your PM who has given his 100% backing to the same airline? Let us hear you call on the government of Barbados to walk away from LIAT. That should shut you up on this topic!
“Walking on a tight-rope with a pole”
I wonder how many people understand the science of tightrope walking and the purpose of the long pole?
Your centre of gravity, that which features greatly in balance and falling to one’s death, is placed below your body and it makes it harder for you to over-balance and fall.
Achieving that point of “balance” for LIAT should be informed by the REDJET $99 FIASCO and the $800/ticket from Barbados to Trinidad INIQUITOUS SIN that LIAT is subjecting its travellers to.
You mean to tell me that Brunton, led by the singularily incompetent Jeah Holder, formerly of CTO where he also shone as darkly as an oil lamp with soot all over the glass chimney, cannot work out a mid point of cost times the volumes of air travellers who would gladly embark on a cheaper, i.e. more reasonably costed flight to at least mek de airline brek even?
Brunton here is an excerpt of the 2 times tables dat i learn 80 years ago.
2 times 6 = 12
6 times 2 = 12
and in case you dont unnerstand whu dat mean, dere is a relationship between volume of travellers, operating expenses, service to customers and profits over time that the actuarial accountants that abound through the region should be able to inform you on.
@pieceuhderock
If the load factor increases as a function of pricing in off peak please do not let the workers find out because they will strike!
look the reality is that the airline has a myriad of problems . there are no real clear cut answer to the viability and survival of the airline,. cost cutting is not the answer in any area ,it would jeopardize the total and comprehensive running of the airline. ac opinion is that the airline is unsustainable and it is a debt not longer affordable to govt and the flying public can no longer pay such high prices I however do commend the govts for trying to undertake such a mammoth task but what was needed was good vision and foresight for the long term planning and running of the airline . Good luck
@ ac | September 8, 2013 at 9:51 AM |
Why are you expectedly confusing yourself during one of your schizophrenic somnambulistic walkabouts in the airy-fairy land of intellectual delirium?
How in heaven’s sake can you make in your contributions to this topic the following non sequiturs quoted ‘verbatim’:
“LIAT is a mess ,, Liat should be put on the auction bloc. a financial disaster with no end in sight, asking govts to remove fees and taxes not going to happen the airline cannot survive without these fees and taxes in effect that would be the end of liat.”
“there are no real clear cut answer to the viability and survival of the airline,. cost cutting is not the answer in any area ,it would jeopardize the total and comprehensive running of the airline.”
“ac opinion is that the airline is unsustainable and it is a debt not longer affordable to govt and the flying public can no longer pay such high prices I however do commend the govts for trying to undertake such a mammoth task but what was needed was good vision and foresight for the long term planning and running of the airline..”
Please, ac, leave this one alone. It is really too much above your intellectual pay grade. Stick to cussing OSA or MAM or some other idiot on the blog like the miller or even your alter ego Carrion Corbeau the Cocky Cadogan.
@ Piece
Is the problem not that LIAT really mean Lucrative Island Agency for Taxes?
Is it not first and foremost a tax collection agency used by these governments to collect monies that should rightfully be collected directly by governments?
The problem we have is a complete lack of vision and direction. We feel that you can put any idiot in charge of an organization and that somehow things will work out….
We feel that we can plant okras and somehow that peas will turn up on vines…
ANYTHING that is going to be managed by persons appointed by the kind of politicians that we have – is guaranteed to fail. The politicians are brass bowl idiots and their appoint their brass bowl friends and cohorts who are loyal but clueless.
These jokers can fail and fail and fail again …and all the retarded politicians do is take up more and more of our money and throw into the hole…
Shiite man….the next thing Bushie will hear is that Funble appoint ac to the LIAT board……
To add to what Bush Tea has commented it makes one wonder why Caribbean Development Bank should not question the business model of LIAT before leading more money. According to the report above, it has done so to the tune of 153 million dollars. Should a financial organization not satisfy a business ability to be sound? It seems the CDB is happy that shareholder governments have the capacity to okay through recourse to taxpayers.
LOL @ David
…you is something else hear Bossman!!!
CDB?!!!…. What Is different between them and LIAT? – except that the ordinary man in the street don’t deal with them, …….so it is not generally known that they are brass bowls too…
What CDB what?!?
Once the brass bowls in political charge say they want money these jokers lend it. Most of the time the loans are misused, misplaced, or just illconceived……but it never stops.
If they had to make a profit in a competitive business they would all starve….
Unless a country is BLESSED with righteous leadership, it is doomed…..BLP DLP NDP PDC ….none currently offers us ANY hope.
It would have been a smart move to put in place a special scheme to identify, develop and build a cadre of potential national leaders as a matter of national developmental policy within out educational system.
Instead, we all we have are people who seem like the dregs of the system up in our faces one after the other….
…who the hell is this Pedro fellow now….?
Are there no intelligent sounding teachers?
what were or are the objectives of LIAT. one would assume to bring more visitors to the islands , has this objective been achieved, how much has liat cost the three govts , is it really fair that the flying public be the ones to maintain and keep the the doomed airline in the friendly skies ,going as far back as 2007 this airline has experienced severe turbulence , however the powers that be maintained that it is an enterprise if properly managed can ride out the turbulence, however 6 years later high maintenance fees labour cost and high fuel charges are chipping away and eroding at any gains liat might have made in addition a more weary public who says enough is enough. one day too soon it would all come crashing down.
@ ac | September 8, 2013 at 3:04 PM |
“.. however 6 years later high maintenance fees labour cost and high fuel charges are chipping away and eroding at any gains liat might have made in addition a more weary public who says enough is enough. one day too soon it would all come crashing down.”
Same thing could be said about the local Transport Board. Are you prepared to give up on that and have it put on the auction block aka privatized?
Wait Miller, you expect ac to see the connection? Why don’t you go on to explain how you and your political pals from both DLP and BLP (and PDC if we ever let them) have all these agencies fcuked up?
Bribes, incompetence, nepotism, and plain simple brass bowl ignorance…..
Not one shiite ain’t wrong with the concept of a LIAT. All it needs is a competent board of directors who ARE HELD TO ACCOUNT for performance, transparency and efficiency.
Not one shiite ain’t wrong with the Transport Board concept. All that needs is to be HANDED OVER to a cooperative owned by all Barbadians who would be required to purchase shares at the rate of 50 cents (in addition to the regular bus fare) every time they catch a bus. This COOP would then elect a Board of directors to run the damn thing and a SUPERVISORY COMMITTEE to keep that Board’s ass in check.
That would work sweet as shiite…believe Bushie. (Wunna done know that Caswell going on that supervisory committee 🙂 )
@ Miller
IT IS ALL ABOUT LEADERSHIP AND MANAGEMENT.
LIAT needs to be privatised for it to become a profitable and efficient business. It needs to be run as a proper business and not seen as just a government airline. LIAT is run on Gonsalves-style begging bowl finance strategies. It is quite obvious that LIAT is being driven by the wrong variables, the wrong strategies, but more crucially, run by the wrong people. Over 50 years of failure should make this obvious to even Gonsalves.
Air passenger traffic is very low because of the world recession and people do not have large sums of disposable income to travel. A major component in LIAT’s planning should be to reduce the number of flights to cut operational costs and debt, and operate with a net profit annually. LIAT urgently needs a financial planner.
The major problem with LIAT is that Gonsalves and others speak as if LIAT is the lifeline for the Caribbean region’s economy, as if the region’s tourism sector will die without it. Consequently, regardless of how much debt LIAT incurs, taxpayers’ hard-earned cash is pumped in to the loss making LIAT to keep it in the air. In some respects this is blackmail.
The region is being held at gun point to keep the highly loss making LIAT operating because of these false assumptions. As long as this foolish mindset prevails LIAT will always make a loss.
no miller even though the inefficiencies might be similar , the comparisons are different. LIAT has problems of a higher magnitude than those of managemenent, the transport board is geared to supply ample public transportation at an affordable cost getting private investors to take it over would not help but would escalate charges mosly creating a social problem .
@Bush Tea
The point has been made already, LIAT does not have control of the price point for the respective countries it serves because of local tax levies.
Honest conversations about LIAt::stephen Joachim
The challenges in sharing my views publicly is recognizing the reality of our country and the sad reality is that almost everything one says will be interpreted in a political context as either supportive or against one of the two major political parties.
The topic today is LIAT. I want to acknowledge from the outset that I am not an expert in aviation. I am however, an expert in accounting, finance and business management and I have some, albeit limited, experience in the airline business.
I believe the time is more than overdue for an honest conversation about LIAT. It’s time to remove the discussion from the realm of emotion, fantasy and regional pride. It’s time to talk of the future of regional air transport and what role, if any, governments and LIAT should play.
I want to start a realistic debate involving facts and reality. So lets start by acknowledging some facts.
LIAT has been an economic basket case for the region and its taxpaying supporters.
LIAT has been a disaster in providing reliable service over numerous years.
LIAT has managed to lose huge sums of money despite having been in a monopoly position for long periods of time. That’s right … A commercial monopoly that loses money!!!!!!
Regional governments have poured millions of dollars into the disaster known as LIAT over at least the last 25 years … Think of how useful those millions of dollars could have been had they been invested in health or education or anything else that could benefit the people of these small island nations.
The latest problems with LIAT provide us with yet another opportunity to acknowledge the serious issues with LIAT and to think of realistic options. To stop throwing good money after bad. The latest issues resolve around the introduction of a new fleet to replace the Dash 8 aircraft. We have all heard the latest horror stories. The reality is far worse than the stories. LIAT is creating untold damage to the reputation of our region. They are hurting our economies. They are damaging our tourism product.
LIAT has been operated under numerous regional governments over the years. So we can’t say LIAT as it currently operates is a socialist or capitalist or any “ist” enterprise. Nor are its current operations reflective of any particular philosophy.
Numerous prime ministers have tried their hands at “fixing” LIAT. Every single one has failed!!! They have failed because they have not dealt with the central problem. It’s hard to acknowledge a problem when you are the problem! Government involvement is THE problem in LIAT.
Before I lay out my solution, lets have a brief review of some of the reasons and excuses that we have heard over the years for LIAT’s persistent and never-ending failures. These reasons include:
1. The Board is the problem … Well we have changed the Board and its members numerous times, to no avail.
2. Management is the problem … well we have changed management again and again and guess what … unmitigated failure continues.
3. The structure is the problem … So we changed that to and did we see success? Nope.
4. Ah, the planes are old and expensive and they are the problem! Well, we changed from Avro 748’s to Dash 8′s and now we are changing to ATR’s! Anyone want to bet on the likelihood of this being successful in saving LIAT? I could go on with more reasons but I think you get the idea.
Time for the solution! It’s very simple and it’s two-fold. The first critical thing is for the governments of the region to adopt an “open skies” policy. The second critical thing is that governments must either privatise LIAT or kill LIAT. This twin action, open skies and getting rid of or privatizing LIAT are inseparable. Doing one without the other will result in guaranteed failure.
There is a role for government. That role is in regulation for safety and to promote competition.
An open skies policy is one that calls for the liberalization of the rules and regulations of the aviation industry. This will create a free market for the airline industry and will promote competition. This policy must be adopted at the regional and preferably CARICOM level. Given the limited success of CARICOM, it’s fair to say that the likelihood of them adopting an open skies policy is near zero. UNLESS you the people demand it!
@ Bush Tea | September 8, 2013 at 3:36 PM |
So what are you waiting on? BBE? Your idealistic proposal sounds like something tried before and failed. What do you called socialism? Isn’t “Coopism” socialism by another name?
I must agree with you on one thing though: “IT IS ALL ABOUT LEADERSHIP AND MANAGEMENT.”
But this can only happen when politicians in their zest for power and control are kept as far away as possible.
So the pertinent question to you, my dear friend, is how would you keep them (the political mongooses) away from the COOP?
If respective LIAT destinations want to run the airport infrastructure as a profit centre we will continue to have a problem. There must be an agreed baseline metric and this s only part of the problem.
@ ac | September 8, 2013 at 4:11 PM |
OK Mr. ac or friend of the real ac, the TB is different from LIAT. So how come the government allows the TB to face serious competition from private sector players like ZRs and minibuses?
How would you describe the ongoing cannibalization of the TB by outsourcing some of its major functions such as maintenance?
The next deal on the market is the leasing of buses from the private sector with the stipulated requirement or provision to operate (by private sector) these buses on major routes for a ‘concessionaire’ fee.
This would leave the TB as shell of an agency responsible for the allocation of licences to operate routes. We can see a rather ‘clean’ merger of the TB and the Transport Authority
Bush Tea has proposed an alternative model based on the COOP. What have you to offer as an alternative to the current fiasco involving political tribalism?
The only way the coop model can work if one considers the vagaries of the LIAT market is if those routes which are likely to be profitable are made to subsidize those which will struggle to be profitable. Shareholders are on record to suggest that LIAT is not in the business to make profit, they will take a breakeven position. Such a model would call for a level of appreciation of the situation at hang, in other words, LEADERSHIP!
@ ac | September 8, 2013 at 4:52 PM |
“There is a role for government. That role is in regulation for safety and to promote competition.”
Hello, ac’s friend:
Your case for the privatization of LIAT and for an open (but regulated) skies policy is well put.
It’s a pity that, with your expertise in “accounting, finance and business management”, you are incapable of seeing the application of a similar model of private sector ownership and operation (but with State regulation) for local mass transport as prevails in many parts of the world.
But the main question to you is if you are prepared to argue a similar case for the GAIA with the government retaining a minority share but full regulatory powers regarding safety and national security.
@Miller
Why must you pull the discussion to local?
@ David | September 8, 2013 at 6:01 PM |
Because there is no regional equivalent to LIAT as a business model other than CAL to compare the effectiveness of the argument for State(s) ownership versus privatization.
There is no party politics being assumed here.
Every single issue has to be denominated by DLP/BLP.
@ David
The only way the coop model can work if one considers the vagaries of the LIAT market is if those routes which are likely to be profitable are made to subsidize those which will struggle to be profitable
***********
Credit Unions are COOPS. Which other area of business had better performance in Barbados in the last 30 years?
Are these not comprised of members – some of whom are successful, and some who will struggle to make do…? It is an unbeatable business model.
Don’t mind Miller with the shiite talk about socialism……to some people COOPs will never be recognized as viable business models for Barbados – because their boards tend to be too black and independent.
…and YES politicians do tend to gravitate to these organizations….like Irene, James P and others…..but look and see how long they last…..only COOPERATORS feel comfortable long term….
Privatization is just code talk for encouraging the Government to hand over state assets to private clubs which operate along the lines of the Cattlewash and Bath cliques.
These entities BELONG to the people of Barbados and if the brass bowl government cannot get them run, then they should simply hand them over to the PEOPLE whose sweat and blood paid for them…often with hard earned pennies…
THIS CAN BE DONE BY CREATING COOPERATIVES COMPRISED OF ALL CITIZENS WHO WANT TO JOIN…WHICH CAN ASSUME OWNERSHIP.
Bushie is TIRED of hearing Miller, Arthur and the Mallet clone Mascoll with this shiite talk about selling off the people’s HARD EARNED silver….
…imagine the bajan people paid to sent these brass bowls to university to come back and sell them out…..back to the same plantation class that old bajans worked DECADES to escape.
Miller STFU do!
What privatization what?!
@ Bush Tea | September 8, 2013 at 8:02 PM |
“and YES politicians do tend to gravitate to these organizations….like Irene, James P and others…..but look and see how long they last…..only COOPERATORS feel comfortable long term….”
Is Maxine McClean included in the “others”? There are some in the woodwork waiting to come out too.
BTW, Bushie, would you have approved the purchase of that part of the CLICO business that the Public Workers’ Credit union took over to help DT’s friend?
So Bushie when is the COOP going to make a bid for the Transport Board to stop the government from selling to Simpson?
Don’t you think that UCAL was the perfect COOP?
You think the COOP could handle the proposed cane sugar industry?
Honest conversation about Liat PT2 Stephen Joachim
An open skies policy is one that calls for the liberalization of the rules and regulations of the aviation industry. This will create a free market for the airline industry and will promote competition. This policy must be adopted at the regional (OECS and Barbados) level and preferably CARICOM level.
I promised in the last programme to begin addressing the arguments for maintaining the status quo of government ownership of LIAT. The first argument I usually hear when I suggest that LIAT be privatized or killed is “but we won’t have any air transport”. This is said by people who have given no thought to the subject and/or do not understand how the competitive marketplace works. Assuming, and this is the critical assumption, that we have an Open Skies policy, which simply means an open competitive marketplace where the same rules and regulations apply equally to all entities, then the first thing that will happen is that existing airlines will expand (this likely includes SVG Air and Mustique Airways). The second thing is other individuals and Companies will get into the airline business. How do I know this? Because we have seen it in Europe and North America. I have evidence for my position.
The second argument is, “we tried competition before with Carib Express and Caribbean Star and they both failed”. They failed because LIAT continued to “compete” while receiving government subsidies or “investments”. We are currently told that LIAT competes on some routes with Caribbean Airlines (CAL). We are told that this is unfair competition because the government of Trinidad and Tobago provides cheap subsidized fuel to CAL. However, we hear very little of the fact that LIAT continues to receive heavy subsidies from their government “investors”.
The third argument is that air transport cost between the small islands of the OECS is by its very nature is unprofitable and therefore some destinations would not be serviced in a competitive market. So I then ask which markets? There are not many markets in the OECS that are smaller than Union island, Bequia or Canouan. These markets are served by two private airlines.
The fourth argument is that private airlines will raise prices and make flying unaffordable to most people. Is flying LIAT cheap and affordable to most people now? Lets assume that private airlines do start to charge more than LIAT does. Lets go further and assume they begin to gouge the general public. Then what? Well its actually quite simple. In a competitive marketplace, other airlines (or people) will begin to fly these hugely profitable routes. How will these new entrants gain passengers? They will lower prices to compete. This competitive process is normal in most of the rest of the economy and normal in all competitive airline marketplaces in the rest of the world.
I think have addressed most of the major arguments for government maintaining LIAT with taxpayers money, our money. Millions and millions of wasted dollars that could be better invested in health, education or infrastructure. When will we stop this insanity?
Let me also repeat: there is a role for government but it must be limited to regulation for safety and to ensure a fair competitive environment.
We have an economy to build. LIAT is an obstacle to that process. We have tried the government ownership route for too long!!! We must admit failure and move on. .
And u miller get up in here telling ac to leavee well alone. ac dare not speak evil of the sacred cow driven by the self serving interest of those in the tourism industry even if it means that LIAT who have demonstrated over the years to be nonprofitable should still continue to fly and fly literally at taxpayers expense until all the wheels fall off.
@ ac | September 9, 2013 at 8:42 AM |
Now that you have gone back to your ‘old own writing self’ would you be prepared to see the return of Redjet to the skies but with a change of name to Calypso Airways?
The shareholder governments of LIAT just backed a large loan from the CDB to replace the carrier’s fleet. Who will pay back the loan if LIAT falls from the Caribbean skies?
We agree with your friend’s argument that one of the more attractive options for making LIAT serve a more effective purpose is to privatize the damn thing. But who would want to invest in airline in a region so politically disjointed with nepotistic administrations? Why not focus on the existing HQ problem where the airline’s political interference, managerial incompetence and serious cash haemorrhaging are blatantly manifested.
An alternative is for the shareholder government’s to swallow their pride, put aside the huge political egos and bring in a management team from overseas to run the airline.
You would be surprised how fast that airline would turn around once foreign managers (preferably white) are “running’ things. The plantation mentality among Caribbean people especially in Barbados is still alive and flourishing.
And yes u don.t have to agree with ac. many of the same points the article makes were said by ac. however u miller choose to dismissed them as nonsense now to find your self somewhat reluctantly agreeing with the article.. all decisions past and present to do with LIAT are driven by self servings exploits who knows how to play the system for their own interest nothing to do with country no matter how it hurts and pains the taxpayers and the tourism sector are the biggest players of them all
Yes the bajan mentallity can be easily infuenced once the word FREE is injected ..the other carribbean island 11 of them with a lower literacy rate had the vision and commonsense to realise that an enterpise such as LIAT was too big to handlem. but one must give them credit they are savvy enough to drink and eat from the trough of the big three shareholders without putting in a dime . So much for intelligence among the three investors However political expediency took priority. everything else could wait.
@ ac | September 9, 2013 at 12:43 PM |
“..however u miller choose to dismissed them as nonsense now to find your self somewhat reluctantly agreeing with the article..”
You are back with your lying ways. Just like the time you said you went to St. Lucia and later “outed” by David of BU as a pathological liar?
Now bring evidence by quoting extracts from my contributions to the LIAT issue where I said you or anyone else were talking “nonsense” regarding the privatization of LIAT.
The issue here is whether there will be willing buyers for the airline given its current financial mess and high level of political interference into its administration and operations.
the longer these govt continue to prop up this doomed airline ,the less likely they would be a buyer or any kind of buyer when LIAt comes crushing down, the movers and shakers in the tourism industry should be ashamed of selling this asinine idea under the guise of benefitting the tourism industry to the three govts who bought it hook line when all they were looking out for what was benefical for themselves. i wonder how these people sleep at night,most notably is the silence coming from the likes of Adrian who might have been part and parcel with his tourism matters articles in touting the purchase of LIAT .
Several emails reaching BU suggest CEO of LIAT Brunton has resigned.
however the elephant is still standing in the room that being a financially crippled airline. the question being asked, how does the shareholders and probably new management correct that problem. CEO burton can be replaced ,however the nuts and bolts needed to keep this airline from freefalling are missing, Burton is a casualty through no fault of his own, In the wrong place at the wrong time, if reports are True..
@ David | September 15, 2013 at 6:25 PM |
We should not be surprised. He has taken the fall for the recent fiascoes the airline suffered. The bad international press from customer letter, the PR attack on Sir Richard’s and most telling the CPL confusion in the midst of massive equipment failure.
But the politician’s have as usual found the whipping boy to hide their nasty involvement in the day-to-day management of that beleaguered airline.
So when is Jean Holder going to leave the scene, permanently?
That airline will never succeed as long as politicians have a say in the direction and management of it. The next CEO would most likely be another politically chosen lackey.
Why not bring a white man with a brand new management team from the UK or Canada or even Australia? Or maybe we can get Alvin or Bushie to run the damn thing.
@Miller
We need to see changes to the Board as well.
Ian Brunton could afford to resign if and that is an IF his getting those french designed plane which was rejected by CAL now to be passed off to Liat means a big french bonus.Oui,Oui!
I wonder how big his cut is..
Given the structure of LIAT a major procurement decision had to be approved by the Board of Dorectors after some kind of tender process. Even if Brunton was able to influence the process the final decision was not his.
@ Common sense is not common | September 17, 2013 at 2:09 PM |
If Ian is involved in any kickback scam he could have only done it with the collusion of the Board; and especially the Chairman who is a Bajan and the Barbados government’s representative.
Would you agree, Commonsense or is this a case of a smart Trickidadian by the name Ian taking gold coins from the Paris Fountain?
David,
The decision to purchase the ATR’s was taken long before Ian Brunton became the CEO. Contrary to what “Common Sense” said.
As a Dem, they like to hurl accusations at others but my mother always told me that people judge you by their own standards, not yours!
Agree Miller.I am hearing some are not happy with that choice.As major shareholder the government need to tell us more about how our money is being spent on this fiasco called Liat.
Prodigal I feel embarass for you sometimes.You must be a very unhappy person.You seem to eat,and drink DLP.
I expected you to respond just as like you did. Don’t feel sorry for me, feel sorry for yourself. My life is complete, it is awesome. I am so blessed!
I forgot that no one can touch your wicked incompetent party.
I have been giving my two cents worth on the long serving,tired,waste of time executive management of LIAT and the political inteference especially at the Antigua headquarters.As far as I recall and I saw the names of the Barbados Board representatives,Jean Holder was not a Barbados rep.There was a PS Mz Gabrielle Springer-Taylor and a banana farmer Trevor Mayers from the constituency of the dead king of St John.I cannot recall the third member .
Barbados should not have put over a $100 million in LIAT.Never,never!!They will not get any ROI unless and until there is a political and economic union of these small Caribbean States and everyman pay according to his demand for services of the carrier.The Leeward and Windward Islands including Barbados is a grouping of mini nations divided by a common language and separated by an airline called LIAT.Battles are lost by armies which turn up late.Money is lost by LIAT run by an army of occupation which ensures the carrier turns up late.Our taxes are hard at work in LIAT.
How many ac’s there got in here … I pick up three already, and the one in Arizona ain’ even get back yet …
Prodigal
Did you see my DLP party card while you were busy working in the opposition office?
It is fine to be supportive of a party of choice but you seem obsessed with anyone who does not fall for your BLP propoganda.
My family and I are busy ensuring that we hold our own in these wicked economic times.Party cards are not for the likes for people like us unlike others who seem to breathe and have their being in party membership.If the cap fits ……..
Free market theory DOES NOT WORK in miniscule markets like the Caribbean. The most classic example of this is the result of the CSME experiment in Barbados:- Big fish swallowing up all of the other fish and domination by one or two power brokers that are quick to make bottom line decisions that literally f#ck countries up …!
As a responsible person, you should not believe what CCC comes on to BU and says when he announced and you believe that I am a person who works in the Opposition office. I would be delighted if that person would come on BU to dispel the myth.
As for you saying that I am intolerant of anyone who does not believe in the BLP, I can say the same of you, you are intolerant of anyone who does not believe in the DLP or who deigns to criticise this incompetent government. If you are honest, you would admit that the DLP is incompetent and lied to the people to win an election.
Do you expect people to be happy with this? For your information, I am not a card carrying member of the BLP, I just support the party. So can I ask you to stop labelling me?
Here we go again. Gabriel both political parties have been subsidizing LIAT. This is not a political issue per se. What are the options? We know that the market cannot reasonable support a pure free market scenario.
Prodigal
I am not going to be in any tit for tat with you,but you could cut the crap pretending that you are not Mia’s assistant Pat and that you are not a former candidate for St Joseph.
I told you already that I admired a lot about you but I am getting turned off by your style of nastiness and rumour mongering.
Support your party same as CCC and AC support theirs but please don’t allow others to make you into a petty,bitter individual.
Remember politics has a very limited shelf life so make friends with all, cuss the Dees when you feel like, but be fair and reasonable and give them praise when they deserve.
Or can you not find the strength to do that?
See I can agree with Miller and with CC,I can agree with Gabriel and with AC,it is all about issues and not personalities Prodigal.
Enough of that for now,have a good evening.
@Commonsense is not common
How can you expect others to take you seriously if you yourself betray one of the tenets upon which we debate. BU is an anonymous blog for those who want to be.
@ Prodigal Son | September 17, 2013 at 4:16 PM |
Same thing here, Prodigal. The miller has been fingered for all sorts of people from Peter Miller to Peter Simmons to Kerrie Symmonds to OSA woman to Jerome X.Walcott to even Mia woman.
The problem with them is that the intellectual tag team Prodigal & Miller is a thorn in their dangerous deceitful destructive lying incompetent backsides. We shall always blind them with the light of Truth.
Amen, miller. You have my back and I have yours! It is a free Barbados and people are free to believe what they want!
Just don’ you be talkin’ Free market mumbo jumbo for essential services …!
David/BU
Your point is well taken.
I saw a comment above and had to respond to it. The comment was that an expenditure of such a size as the lease of the ATRs could not have been approved without the final decision of the Board.
I agree with that, but I do not agree with the inherent assumption that the Board knew what it was doing in that approval process.
Brunton was a pilot for BWIA and became a lawyer (don’t ask me how, when or why). It is my theory that by arrangement Brunton was “fired” from CAL and put out as bait for LIAT. The shareholders swallowed it, and he arrived at LIAT as a Trojan Horse with a mandate from T&T to do as much damage as he could so that Trinidad could buy it for a song and do us all the ultimate favour to “take the burden off our shoulders”.
This theory is supported by the fact that the CEO position at CAL he was “fired” from on Nov 27, 2010 is still unfilled, and was only just advertised – almost three years to the day after he was “terminated” – my goodness, coincidentally just after he resigned and ran away from LIAT. and is now “available” again.
(Take note: If Brunton returns to the CAL CEO position, I will claim that as living proof of the LIAT Trojan Horse Project.)
So Brunton has the intelligence, knowledge and experience to know that you can make statistics prove anything, and that you can easily bramble a Board of ignorant self-made country people with almost any presentation if they had no clue what you were talking about in the first place.
In other words, to the Board Brunton IS the expert…and they would, should and could have just taken his word for it. Certainly the “aviation expert” Chairman would not have known the difference.
If there was a Board composed of intelligent aviation people who knew the difference between an aileron and a rudder, I would accept that here was an intelligent decision made after they had done their own research and were all genuinely satisfied it made sense.
But the LIAT Board – the majority for Barbados, anyway – are all political appointees, self-made loyal Party men who may know their own business but diddly squat about aviation – except perhaps Trevor Mayers, who was involved in an ancient DC3 money-losing cargo operation Carib West which eventually went bankrupt back in the 1960s – and is totally irrelevant as far as LIAT is concerned.
Did I mention another coincidence – that the same aircraft Brunton got LIAT to order are the ones CAL is operating now and replacing their Dash-8s with? My point is that if CAL were to take over LIAT, there would be a common fleet. How convenient.
I have been around Caribbean aviation since about 1970, and I swear this is the first time I have even had the slightest feeling that LIAT is about to fail. My prediction – from the inter-island inside information that I know – is that LIAT will be irrelevant in about 5 years, maximum 10.
I wish it were otherwise, but my sense of the future is seldom wrong.
Finally, now that Brunton has scurried back to Trinidad to re-apply for the CAL CEO position, I wonder how long it will take for T&T or CAL to propose a merger, take-over or purchase of LIAT?
Hmmmm…