LIAT suffers losses

KINGSTOWN, St Vincent – The regional airline, LIAT, is forecast to register an EC$15 million (US$5.5 million) loss on its operations last year after registering a net profit of EC$8.9 million (US$3.2 million) the previous year.
Chairman of the three shareholder governments, Prime Minister Dr. Ralph Gonsalves, speaking to reporters after a shareholders meeting here, said that the airline is faced with a number of problems including escalating fuel costs, labour costs as well as maintaining the ageing fleet of the Antigua-based airline.
“Last year we had a decline in passengers while we kept our fare base at the same level. 2011 we are budgeting for a loss of EC$1.5 million (US$555,500). But it will be worse if we are not careful with some cost saving measures,” he said after the meeting that was also attended by the Barbados Prime Minister Freundel Stuart and Antigua and Barbuda Prime Minister Baldwin Spencer.
Liat, which serves 22 destinations in the Caribbean, last year carried 1.3 million passengers as compared to 1.4 the previous year. The airline also made fewer departures, with the figure for 2010 being 46,597 as compared with 49,127 in 2009.
Gonsalves said that the cost of fuel was now US$102 dollars a barrel and with the ongoing situation in Egypt it is feared that the price would increase further.
“That’s a problem which is ahead of us,” he said, adding the meeting also examined “a number of budget measures to achieve profitability.
“We are seeing in 2011 that we are probably going to have a two per cent decline in passenger traffic, we are hoping that this would not be the case, but you have to plan for what you see as the realistic numbers before you,” he said, adding that competition for the airline would also be a major factor.
He said that the airline is also looking at expanding and improving its fleet that would allow it to look at markets beyond its traditional routes. (CMC)