LIAT lands fleet loan

The shareholder governments of the regional airline, LIAT, on Friday signed a US$65-million loan agreement with the Caribbean Development Bank (CDB) as the cash-strapped airline seeks to upgrade its ageing fleet.

The loan represents 61 per cent of a US$100-million refleeting plan to replace its Canadian Dash 8 aircarft with French-made ATRs.

Barbados, LIAT's largest shareholder, takes up the bulk of the loan - US$33.2 million; Antigua and Barbuda assumes US$21.9 million of the liability, St Vincent and Grenadines US$7 million, and Dominica US$2.4 million.

Each shareholder will provide the funds to LIAT on the same terms it received from the CDB, with the airline responsible for repaying the loan over a 13-year period, with a two-year moratorium built in, CMC reported on Friday.

The signing ceremony comes against increased criticism of the airline by the travelling public in recent months, with long delays, numerous cancellations and lost baggage being the order of the day.

LIAT Chairman Jean Holder apologised for the hiccups, saying that positive change is coming with the airline's refleeting exercise.

Barbados' Prime Minister Freundel Stuart said his government had no problem coming to the table to assist LIAT, since it is not possible to contemplate a region without the airline, despite the frustration expressed by travellers.

"Barbados has a vested interest in the easy movement of people in this region - because CARICOM is our third-largest source market for tourism. So, we cannot contemplate a region without the services of an airline like LIAT," said Stuart.

"I don't know of any other airlines prepared to do in this region what LIAT has done since 1956, in one form or another," he said.

CDB President Dr Warren Smith stressed that reliable and efficient regional air transport is an indisposable undertaking of Caribbean development.

He said LIAT's direct impact on the region is estimated at more than US$320 million.

St Vincent and the Grenadines Prime Minister, Dr Ralph Gonsalves, who is also chairman of the LIAT Shareholder Group, anticipates the modernisation of aircraft together with improvements to the airline's operations will lead to an overall improvement in the financial operations and the efficiency of the airline.

He said that LIAT has already set its sights on spreading its wings.

- CMC