Liat plots course — without BWIA

With $44 million under its wings,  CEO Gary Cullen says Liat is ready to become the region’s first low cost carrier, with or without BWIA. During a recent news conference at Liat’s office in Antigua, where he presented the airline’s 2005-2006 plan, Cullen said the “new Liat” was putting itself at a competitive advantage and ready to soar again. On the proposed merger with BWIA, Cullen was not banking on it. Both Liat and BWIA, he said, were undertaking their respective restructuring exercises and had not reached to the point where each airline could properly discuss the whole question of a merger. The final plan outlining a long-term viability strategy for BWIA was discussed during last Thursday’s weekly Cabinet meeting at Whitehall. The plan was referred to Cabinet’s finance and general purposes committee which met on Monday.

But he also described the regional  aviation as “sick” and was optimistic though that a remedy can be found, noting that most local carriers never or rarely ever made a profit regardless of ownership structure. Most local carriers have never or rarely ever made a profit regardless of their ownership structure,” Cullen said. Cullen held up Liat’s 2005-2006 transformation plan as a possible model of the way forward. This plan features further cost reductions, a simplified fare structure and expanded services across the region. This involves, he said,  the continuation of the replacement of older aircraft and replacing them with Dash 8-300 planes, adding to Liat’s fleet size, building up their energy reserves and aircraft spares holding and launching a major staff/training and development programme.

In terms of its strategy for routes, Cullen said Liat’s long-range aircraft will link its Barbados and Antigua hubs with destinations such as Kingston, Havana, Fort Lauderdale, Caracas and the Netherlands Antilles. He added that the airline’s route expansion opportunities will be further boosted once the Organisation of Eastern Caribbean States regains Category One status from the Federal Aviation Authority. Low population base, he said, coupled with high leisure and low-business content and indigenous carriers ignoring opportunities to cooperate with one another were identified as some of the obstacles to regional airlines coming out of the red. The CEO  noted that intra-regional carriers incur relatively higher operating costs due to the short distance between the islands.

Cullen said Liat’s history reflects that of the regional aviation industry, especially the reluctance by private sector shareholders to invest in regional airlines with the result that the governments of the region become the airlines’ saviours in times of crisis. At present, government shareholding in Liat is 73.4 percent. Cullen took the view that a relatively debt-free Liat with a strengthened capital base, dedicated employees, strong brand loyalty and as well as scheduling and market planning would provide substantial competitive advantage — and make Liat  the Caribbean’s first low cost carrier. Liat’s growth plan will greatly contribute to the development of air transport in the region, “But we cannot do it all on our own, Cullen declared. He appealed to all other regional carriers to join with Liat to create  a world-class aviation structure. Cullen added that with World Cup Cricket 2007 just around the corner, it was imperative that their be maximum cooperation between regional airlines.