The board of LIAT airline is clearly feeling the pressure of mounting ongoing criticism of its consistent inability to achieve a stable business model and to provide a vital intra regional air service in the Eastern Caribbean on a reliable basis.
Unfortunately, the announcements of 6th March from the LIAT chairman, Jean Holder, strongly suggest a strategy still devoid of any coherent business sense. Take on huge investment in multiple new aircraft but then shrink the airline’s network? “Passing strange” and “wondrous pitiful”, to quote Shakespeare. If, instead, this is Dr Holder’s idle threat, designed to panic other regional governments in to investing in an airline with such a tarnished reputation, then that also is a strategy likely to fail.
Investors seek companies with proven management expertise. Yet, in his 100 day strategy announcement last week, Dr Holder stated that the current directors and senior management have invited “some experts” to undertake route analysis of the LIAT network. Outside consultants are needed for a basic management task – even after 57 years of LIAT operations? No wonder there are accusations of amateurism in LIAT management and no wonder years of persuasion by Dr Holder have failed to elicit much new investment in the airline from other governments in the region.
Over the years one of LIAT’s competitive advantages, which it still failed to exploit strategically for further growth, is the economy of scale to be derived from a fleet of 19 aircraft. That size of fleet has always dwarfed most new competitor airlines in the region and, at least, allowed LIAT to drop fare prices for long enough to put the new players out of business.
If LIAT shrinks its route network and its fleet, as Dr Holder is threatening, then that competitive advantage is lost and with it there is an increased likelihood of LIAT’s demise at the hands of today’s many and growing competitors, all of whom already serve some of the current LIAT network. Jet Blue continues to take over many of American Eagle’s former island routes out of San Juan. CAL is expanding its routes from Trinidad northwards and Seaborne is growing its network south through the islands. Winair is expanding from its St Maarten base and BVI Airlines has just announced that LIAT is a target in its expansion under new wealthy ownership. Real competition is brutal and the wolves are sensing and circling the wounded LIAT prey.
There, finally, seems to be an understandable sense of panic at LIAT but most observers doubt that the current airline’s directors and management can devise an effective survival strategy. This time the debt is too big and the previous financial lifeboats are leaky.
The litany of mistakes and mismanagement at LIAT has accelerated in recent times. The ultimate price may yet be paid for the continual churn of CEO’s and Acting CEO’s, the poor planning, the excessive staffing levels, the poor marketing and the loss of business volume. LIAT employees are openly calling for the dismissal of the airline’s senior management.
The latest and potentially fatal error is the disruption and expense of converting the LIAT fleet over to different aircraft – brand new ATR planes, which cost around US$20 million each and which the loss making airline simply cannot afford.
Possibly due to better maintenance, Air Canada’s Jazz subsidiary continues to operate the same two types of Dash 8 aircraft as LIAT, even though the Canadian fleet is several years older and flies in difficult weather conditions. If some LIAT aircraft had to be replaced, slightly newer Dash 8’s are readily available on the second hand market. The 34 seat SAAB turbo prop aircraft, recently purchased second hand by Seaborne to compete with LIAT, cost around US$4 million each. These comparisons are so stark that there is little need for a detailed knowledge of aircraft maintenance costs or seat-cost-per-mile operating economics.
A sudden collapse of LIAT operations due to seizure of aircraft by creditors, as reportedly nearly occurred in January this year, must be avoided. That would certainly be disastrous for LIAT and leave no value in the company. However, it would also be disastrous for the Caribbean Development Bank, as senior lenders, and be equally disastrous for the wider economy of the Eastern Caribbean – at least until competitor airlines could fully take over LIAT route capacity.
Many in the region are prayerful for the airline’s salvation – but who is going to save LIAT and when is Dr Holder going to be held accountable for his ten years of LIAT stewardship?
Too little too late.
You run an airline with incompetent men like Jean Holder who, when he was at the Caribbean Tourism Organisation, was similarly inept and here we are wondering why this single airline, what should be the thriving backbone of regional travel is dying?
The reason that CARICOM is dying is because these entities that are the lifeblood of regional integration and travel are being mauled by these incompetent men and women.
Men and women, promoted beyond the levels of their respective competencies, bestrutting the world with titles and accolades that they, never in a week of Sundays, should never have had.
Then we watch in total amazement as they PHVCK up the party and wonder how could this have happen to poor, us citizens of CARICOM!!
It is interesting and a welcomed that Caricom would want to move to a single ICT space: http://www.kaieteurnewsonline.com/2014/03/07/caricom-heads-meet-to-create-single-ict-space/ BUT have been reluctant to move towards a single Caribbean air space. It makes one wonder who is serious and what is priority.
Well put ‘pieceuhderockyeahright’. All I can add to that, firstly, because I chuped, with reference to these words: “If LIAT shrinks its route network and its fleet, as Dr Holder is threatening, then that competitive advantage is lost and with it there is an increased likelihood of LIAT’s demise at the hands of today’s many and growing competitors, all of whom already serve some of the current LIAT network.” is Ha ha ha ha haaaaaaa haaaaaaaaaaaaaaaaaaaaaaaaaaa!!!
And, secondly, could not happen to a bettah airline ’cause its time that the market is left open for non-monopolized inter-island transport and perhaps thirdly and lastly, there is certainly room for those who have no idea how to run an airline to be on the breadline of the no more fatted calf.
“A sudden collapse of LIAT operations due to seizure of aircraft by creditors, as reportedly nearly occurred in January this year, must be avoided. That would certainly be disastrous for LIAT and leave no value in the company.”
This is the most likely outcome given the current and projected financial woes of that mismanaged airline.
An escape route the fiscally comatose shareholder governments are hoping for.
The incompetent senior management of LIAT must shoulder most of the blame for the current state of affairs for allowing themselves to be tarnished and abused by the regional politicians especially in Antigua.
The managers would be the ideal scapegoat for the demise of the current version of LIAT.
Will Jean stick around to be the fall guy or would he jump the airship with a golden financial parachute for excellent service rendered to his political masters?
Well done West Indian politicians , you have served your people faithfully and indeed proved your colonial masters to be right by driving another nail in the regional integration coffin.
There is no more effective CURSE that can be placed on a society than to marginalize its men, ..and to push forward effeminate brass bowls into leadership positions.
We have embraced that shiite policy – led by a bunch of clueless women (Including annunakis) and by she-men like Peter Wickwhaterpver and ‘sweet boy’ Ross….. Who want to take the “Y” out of bullying…. 🙂
….we are reaping the inevitable rewards of pissy ineffective leadership and the demise of our society as a result.
LEADERSHIP IS A MAN THING….like it or not
….and NO society or organization can succeed without leaders ….that means a need for REAL REAL men..
How is it that persons who FAIL miserably at one level can get to be assigned higher responsibility?
How is it that brass bowls can actually give up and RESIGN …and be kept in place…..?
We all would have to be brass bowls too…..to continue to accept such idiocy…
@ David
Don’t even bring up that ICT shiite from the HOGS…..those €£%#<* should be made to pay for that CARICOM conference from their own damn pockets……
@Bush Tea
How about we bring up what was mentioned recently on the Time to Face the Nation show? Referring to the fees which Trinidad should be handing over to regional government for handling aircraft flying through our air space?
David why do we keep expecting Trinidad to “play nice” with small islanders?
@ Hants
David why do we keep expecting Trinidad to “play nice” with small islanders?
+++++++++++++++
You playing you don’t know…..
BECAUSE WE ARE BRASS BOWLS….
Bush TEA….you keep harping on effeminate men and clueless women. You need a KICK and a 2×4 in your balls to see how strong a man you are. Stop maligning us women you CHAUVINISTIC old timer. You have gone past your expiry date. There are more men pleasuring men than women in BIM. Nearly 80% have had a male on male relationship. That may include you for all I know since you are always harping on that.
Take heed of these words by Ricky Redman “I have finally accepted that Idiot proofing is a concept that’s impossible to achieve. The idiots are far more adept at being idiots than we can ever imagine. I do believe there is also a new strain of super idiot that manages to infiltrate every sector of human society and I fear they are gaining control of our world. If we are not careful common sense will become idiotic and idiocy will become genius.”
We need REDJET , Crooks can not run country and can not run an airline
@Plantations
What do you know about the Burn boys who ran Redjet?
@island
Blessed Sunday
David ,@ I dont know nor know the term Burn Boys, What i do know We was on Red Jet more than most , At $9.99 , $19.99,$ 29.99 ,$ 39.99,$ 49.99 , $59.99 and so on , The most cost seem to be same day travel.As time short time went on the plane was more and more full each trip, We had movement and people reach the Caribbean and was making money ,
It was a good fell like Barbados was on the Map.
When We get a few more Dollars We may look at Red Jet , no matter who was in it , To Us it was a start of a good thing,
Barbados got its VAT and Taxes and all other Fees. dont know the numbers but if some have the numbers during that time , we would welcome to see the Numbers on all . We dont hate any one we may not like how they behave and the wrongs, Any one can be forgiven after they admit to Truth.
@Plantations
You can’t make a judgement about Red Jet on the basis of a cheap ticket.
Isn’t the problem one of Caribbeanising every job regardless of competence?
This is why we are in dire need of a ferry service.
Didn’t Kamla from T&T promised to help the region with a Ferry?
@ Islandgal
Bring yuh 2X4 and you will see which ‘prime’ Bushie is past….
Bushie is not anti-women…indeed, a man is not a real man without a good woman at his side (tell that to the she-men)…..nor does a woman truly blossom without a REAL man as a partner.
…just look at ac and see how confused and erratic she has been since the man left for Arizona….and then the spots of sanity during his brief visits home….
LOL …she is probably being “stabilized” as we speak – during such a visit….which may explain her recent absence…
Leadership is NOT drinking milk. It is actually THE most challenging responsibility that one can assume. Just because we went through a calm patch of sea and every Tom Dick and Harry took hold of the helm and feel that they are leaders don’t mean squat!
When the wind kicks up and the waves begin to swell ..watch those little boys pissing their pants and calling for their mommies…
Real men don’t just turn up …. They NEED to be identified, nurtured, refined and VALUED by any society that intends to be successful.
….but of course Brass Bowls would never see this…they think that “things will just work themselves out….” ..and that sissies who can’t even face Bushie here on BU can somehow lead us at the national level….Steupsss
Wuh you have down there for lunch…..? Bushie feeling peckish.. 🙂
David @ When poor people travel they look at price , We get nothing from LIAT mush these days , Being late, rude, over priced, over VAT and over Taxed based on US prices and lack of Service .,At Least RED JET tried , and showed we can get there for less.
What do we get from the DBLP government for cheap? Even if they were crooks, We best rather deal with a smaller and cheaper crook for now.
Look at the 3 country who run LIAT and you may almost see the same names pop up in all kinds of Fraud,, buying votes, non payments, Sir Allen Standford, and the list can be added to,
Yuh feeling peckish Bushie? Tek care yuh get poision!
REDJET was sabotaged by the greedy Caribbean governments
Roverp | March 18, 2014 at 11:14 AM@ least one other person knows the deal , We flew on RED JET every week,, we also saw the pick up in the Numbers of People flying, If they can We at PLANTATION DEEDS will push it , The crew were a lot better than LATE LIAT.
The 3 crooks that run LIAT make funds from VAT , TAX , Surcharges , fuel fees , Soon there will be pilot Fee, seat belt fee, tires fee , instruction fees, Pm fee, and so on ,
But yet tell the worker they have no money , then Why get new planes at about 60M ,? who the hell lends money to a company that failed?Who got the kick backs on that deal to buy new planes , that sucks,, Lets see who, Only other Crooks.