In a cost cutting move, LIAT has closed its City Ticketing Offices, saving the regional airline about $3 million (EC) a year.
Chief Executive Officer Brian Challenger said today: “The closure of CTOs is central to cost reduction strategies with all airlines. This move is aimed at reducing LIAT’s overhead costs and consolidating a new distribution strategy that is consistent with the available technology”.
He said that throughout the process, the workers’ representatives were kept informed of the closures by way of correspondence and meetings. The most recent meeting was held in Barbados on Tuesday with the company’s chairman, and representatives of the Board of Directors and management.
Challenger noted the airline industry was undergoing a shift from traditional distribution models towards a greater focus on the web as a sales and information channel.
He said LIAT’s distribution strategy has been modified to correlate with increased web bookings due to the growing number of customers using the internet.
“As the Company moves forward with this plan, it is taking advantage of studies which have been carried out or are in train in the areas of institutional strengthening, information technology, route development and strategic planning,” the LIAT CEO added.
He said LIAT, like other companies were affected by the global economic crisis.
“In addition to operating in an environment of escalating costs, the Company’s financial performance has also been negatively impacted by increased competition on traditional LIAT markets and extremely high fuel prices.” Challenger said.
“Fuel prices have increased from US$40 per barrel in 2008 to US$90 per barrel in 2010 and are forecast to be US$112 per barrel in 2011. More than half of the losses incurred by LIAT in 2010 were directly due to the spike in fuel costs,” he added.
Challenger said the airline, therefore, had to implement cost reduction initiatives in order to ensure its viability going forward. (PR/CM)
