BWIA-LIAT MERGER?

The planned merger of BWIA West Indies Airways Limited and LIAT, once there is the elimination of duplication of services and routes, a total severing of management and staff made redundant by the merger, a drastic reduction in management and employee perks, and an insistence on openness in the manner in which BWIA is managed, will give the merged airline a reasonable chance of survival and profitability.

Perks, such as free airline passages for BWIA personnel, their families, immediate relatives and boy friends and girl friends, will have to be substantially trimmed, and in perhaps two areas, eliminated if the airline is to be put in a position to ride out the difficult days. The need for further cuts in management and staff, along with cuts in salaries and wages, will need to be appreciated by all concerned. The cuts have become standard strategy for many of the international airline majors, although despite them several airlines, which had become household names over the years, have gone under.

American Airlines, BWIA’s major competitor on Caribbean-United States of America routes, is in serious difficulty, although it has effected major personnel reductions, slashed routes, mothballed planes to combat the challenges posed by the decline in the US economy, September 11 and the reluctance of all too many Americans to airline travel as a result of 9-11. Prime Minister Patrick Manning’s announcement on Wednesday of a recent meeting in Barbados by the Prime Ministers of Barbados and St Vincent and himself, along with the Deputy Prime Minister of Antigua and Barbuda at which it was held that a regional airline was of strategic importance, has made the airline merger almost a fait accompli. All that remains is ratification by the respective Governments.

Manning has advanced the idea of greater Government control of BWIA, putting forward, along with the plan to merge it with LIAT, and the apparent disinclination of private sector shareholders to invest any further in the airline, the need to keep it flying. We are not entirely persuaded that greater State control in BWIA is the answer. Government still has the option, adopted by the Government of the United States, of seeking to provide a bailout, however worked out, for American air carriers without itself owning or taking up a major shareholding, or any at all, in the airlines.

Admittedly, the situation is somewhat different in Trinidad and Tobago, where the Government is not only a major shareholder in BWIA, but once owned the airline. We believe, however, that any Government shareholder control of BWIA may result in representative trade unions politicising the issue, and demanding not only that there be no further retrenchment, but that some of the workers already severed be rehired, and there should be an upward movement in salaries and/or wages.

While respective Caribbean countries have shareholdings in LIAT, within recent months Trinidad and Tobago has been alone in taking the initiative in seeking to assist LIAT financially, including the guaranteeing of a loan to assist the cash-strapped airline. And while the region has been made aware of the view of some of the regional leaders that they considered BWIA to be of strategic importance, we have not been told that they were willing to back this view with their country’s money.

We wish to make it clear that we are not dismissing outright the idea of an increase in TT Government shareholding in BWIA, providing that it is moderate, but it should be accompanied by even token shareholder investments by regional governments.