by Laura Ash

The Prime Minister of Antigua and Barbuda Gaston Browne has announced Caribbean airline LIAT would be liquidated following a series of unsuccessful months due to COVID-19. The airline, based in Antigua, will be formed into a new entity that will provide vital connections between the Caribbean islands.

LIAT is heading into liquidation. Photo: Laurent ERRERA via Wikimedia Common

The decision was announced and shared with local media outlets on June 27th. It comes after months of losses due to the coronavirus alongside a particularly unprofitable 2019.

Last year, the airlines recorded a loss of EC$12m (US$4.4m). While it may have hoped to recover this year, LIAT could not have foreseen the scale of the coronavirus. In May, it said it needed US$5.4m to recover. There was a spell of hope for investment from Richard Branson, which later turned out to be bogus.

It goes without saying that the coronavirus has been kind to very few if any, airlines. Small regional carriers like LIAT are now feeling the pinch after months of parking their aircraft and paying staff. Unfortunately, for LIAT, the toll was just too much.

The airline is currently awaiting a stakeholder review where its fate will be decided. The hope is that a new carrier can rise from LIAT’s ashes to bring vital connectivity within the Caribbean.

LIAT will form a new airline

In a local radio interview in Antigua, Gaston Browne spoke confidently about the need for a new airline to be formed in Antigua. It’s essential. As an island in an archipelago, connectivity is vital, and allowing LIAT to collapse without investing in an alternative is non-negotiable.

At this point, the Prime Minister hopes that the LIAT brand can be restored on a revamped carrier. According to Barbados Today, Browne said in a local radio interview that,

“We should not be running away from the name LIAT. LIAT is a Caribbean institution built by Caribbean people of which we should be proud.”

LIAT De Havilland
Browne says Caribbeans should be proud. Photo: BriYYZ via Wikimedia Commons

However, realizing that ideal is fraught with difficulties. In the interview, Browne’s cautionary approach was evident. Currently, four Caribbean isles own LIAT; Barbados, Antigua and Barbuda, St. Vincent and the Grenadines, and Dominica. Should that continue to be the case for the new carrier, it will be challenging to determine the best course of action for the airline. With each state following different agendas, it will be better for the new LIAT to have even stronger leadership this time around.

LIAT’s current issues

However, while the promise of a new airline is where everyone wants to focus their interest, there are a few loose ends that need tying up first. For starters, how will LIAT manage its employees? Having made a loss in 2019 and owning very few planes, there are very few avenues where money can be recouped.

Of course, paying staff is a priority, but currently, it is unclear exactly how the airline will be able to manage. Hundred of jobs will be lost in the collapse that will not be recovered. While LIAT will need to come back stronger than ever, it must also be smaller to adapt to the current climate.