TT puts up $30m to rescue LIAT

GOVERNMENT is prepared to guarantee loans made by the Caribbean Development Bank to shareholder governments of LIAT up to an aggregate amount of EC $12.5 million (TT30 million), Minister in the Ministry of Finance, Ken Valley said yesterday.

This is the decision taken at a Cabinet meeting on Tuesday which discussed what could be done to save the cash-strapped regional carrier. Valley said Government was not prepared to give LIAT money directly. At least, not until the Steering Committee, led by Ken Gordon and charged with the responsibility for examining the future of the regional airline industry, prepared its findings. “Until the committee reports, there would be no more direct funding to either LIAT or BWIA,” he said. The Steering Committee is considering a proposal to merge LIAT, BWIA and Air Jamaica into one regional airline. Asked whether government, which owns just one per cent of LIAT, was favouring the regional carrier over national airline BWIA, Valley was emphatic: “No, we are not, we cannot and will not.”

LIAT requires an immediate injection of US $935,000 or  it is likely that creditors would seize five of its ten aircraft. But sources stated that the regional airline really needed EC $25 million to take care of its major current debts. The airline’s total indebtedness is EC $100 million. Just last year, the Caricom heads decided to bail out LIAT to the tune of EC $11 million (TT $22 million), 40 percent of which was to be guaranteed by the Trinidad and Tobago government. The more recent decision of Trinidad and Tobago comes in the wake of a meeting between Prime Minister Patrick Manning and St Vincent Prime Minister Ralph Gonzalves on the issue of LIAT.