Captain Urges LIAT Shareholders to Think BEFORE acting …
Submitted by Captain James C. “Jim” Lynch (retired)
12 January, 2020
- Please read my professional take on LIAT before acting…
Honourable Prime Ministers…
There is a strong case to be made – indeed, the case has been presented for at least the last 20 years – that LIAT should be commercialised… that is, the shareholder Chairman and entire Board replaced with individuals who have or have had some involvement with and interest in aviation, and the executive management replaced with airline professionals who are capable of performing the major surgery of turning the airline around towards breaking even – and perhaps making a profit in the not too distant future.
Yes, the Board has just been renewed, but with the addition of ONE single person who has the first clue about aviation and airlines. I congratulate you on that one, but the rest of them – including former PM of Barbados Owen Arthur – are still bereft of any airline knowledge and will vote against him if they see fit or are politically instructed.
When will you learn? Will you continue to do the same things year after year and still expect the results of that insanity to be different? You don’t do that with your government, why would you do that with LIAT?
In the MANY decades that PM Gonsalves and Chairman Holder have been at the LIAT helm, there has been nothing out of their political meddling but incompetence, failure and losses, and it is clear that neither has learned the slightest thing about running or supporting an airline.
In any private industry the shareholders would have booted these people out and replaced them in or before the second year of abysmal performance, yet the political Carnival continues at major expense to the shareholder taxpayers.
FACT: The Board STILL consists of political friends and appointees; only ONE has the slightest knowledge of aviation except as passengers. This has been the case for some 30 years.
FACT: The current CEO, previously CFO, was previously a government-owned hotel book-keeper who was appointed to the CFO position at LIAT by Chairman Holder, and with his support was elevated to her Most Superior Level Of Incompetence in the position of airline CEO.
I put it to you that her performance has been to lose even more money her term so far as CEO than LIAT has ever lost before, and the management and performance of LIAT as an airline also reflects her incompetence for the job.
FACT: An airline is not a hardware store, it is not a legal office, it is not a fast food restaurant. An airline is a highly technical institution which employs rigidly licensed professionals – pilots and engineers, who undergo frequent training and performance checks – as some half of its workforce.
“Good enough for government work”, haphazard implementation and best guesstimates have no place in any part of an airline’s operations or maintenance. An airline is one of the most regulated and supervised industries in the world – after nuclear power plants.
It should not be necessary to recount that an owner of almost any business provides the broadest mandates – instructions – to their Board, the Board only slightly less broad mandates to its management, and that unless something goes wrong THEY DO NOT INTERFERE. And if/when something does go wrong it is the job and the responsibility of the Chairman and CEO to face the ownership – and the public – to calm the waters and explain what went wrong.
It should also not be necessary to state that when a company is publicly owned – by taxpayers through the government – transparency is vital, especially when taxpayers are constantly being asked to provide financial support to the business.
Yet LIAT has not made its (audited??) annual accounts – if there are any – available to ANY public entity for over 40 years. Any accountant or lawyer with experience would flag such a failing as an indication that one or more people had been siphoning off (taxpayer) funds for decades, and that everyone from shareholder through Board to executive management had been aiding and abetting in the CONCEALMENT of such activities.
We are finally at a unique crossroads where one shareholder will have the majority, and with that the right and the capability to impose changes on the airline and set LIAT on the right track to break-even, if not head into profitability.
That shareholder (was Barbados, will now be Antigua) has been provided with multiple suggestions as how this should best be done.
Prime Ministers, I put it to you that the current ploy of demanding more money from the LIAT shareholders and LIAT destination governments is NOT the solution to LIAT’s problems.
LIAT’s REAL problems are
1. in appropriate political interference,
2. unqualified political appointees and
3. incompetent management.
It could be said that #2 and #3 emanate from #1 – because if the Board contained anyone who knew a bit about aviation the taxpayers would not now be on the hook for between US$65 million and US$100 million in airplanes (which I understand have now almost ALL been sold to acquire cash to pay the lease-backs – so the shareholders do not now even own the airplanes).
At the time the Trinidadian CEO (as an agent for ATR, improperly) brambled the LIAT Board – as he had (also improperly) brambled the Caribbean Airlines Board before – into buying a whole new fleet of ATRs for US$100 million, it would have been possible to cycle the entire fleet of known, existing, suitable, reliable, hardy Dash-8’s through Bombardier in Canada for all of them to be “zero-timed” for a cost of less than a quarter of that amount, OR to sell them and replace them with more recently manufactured Dash-8s.
AND, a competent LIAT Board would have appointed competent management which would not have needed to sell all of the ATR aircraft on lease-back to replace hemmoraging cash.
Prime Ministers, what LIAT needs is the removal of politics and the insertion of professional competence. There MUST be competence at Board and at management level, with the shareholders at arms-length providing the BROADEST mandate (such as “you must achieve break even or better within a year”), and the Board (also at arms-length) providing more granular mandates – but NOT interfering in the running of the airline.
But what is happening now – the hemmoraging of money, the constant financial demands on shareholders, destination governments, passengers and staff – is 100% unacceptable and can ONLY end up one way, and that is the closure of the airline, whether you want to admit it or not.
At some point the shareholders and passengers will be simply unable to afford the expense, and for sure attacking the staff (again) for the incompetence of Board and management will result in walk-outs – also whether you want to admit it or not.
I ask you to discontinue this political approach to “saving” the airline, and to work instead towards making LIAT a commercial entity.
I also warn you that the continued “soaking” of the travelling public with cash cow aviation taxes and fees will have the same efect – people staying home, because they simply cannot afford to travel regionally on LIAT.
I wish you well, but as a Caribbean professional and an observer in aviation for over 50 years these days I continue to expect the worst.
Yes, as a professional I too am “not impressed”.
Thank you for your valuable time and consideration.
James C. “Jim” Lynch
* Originally from Barbados, West Indies