Proposal for Barbados to Quit LIAT and Form its own Air Carrier

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ST. JOHN’S, Antigua, March 28 2015 – Caribbean News Service (CNS) has obtained a document titled “Proposal for the Establishment of a Barbados Air Carrier.”

The document, allegedly authored at the senior management level of LIAT, points to Barbados, LIAT’s majority shareholder, planning to quit airline

The document proposes that a Barbados air carrier be established with its own Air Operators Certificate (AOC) and Route Licensing Authorisation.

The new company would effectively replace the majority of existing LIAT services throughout the region and would seek to develop new markets.

An approach, methodology and structure for the establishment of the new Barbados air carrier were detailed in the document.

It said a traditional approach to fleet planning in a startup airline with a projected requirement of 10 aircraft would be to launch initially with two to three aircraft and a limited route network and build thereafter incrementally over a period of 18 months to the final fleet number.

The Caribbean Development Bank (CDB) has funded, via shareholder governments, LIAT’s wholly owned ATR -42 aircraft.

The plan calls for the title of those aircraft to be passed on to the Barbados Government either through shareholder agreement or through CDB taking charge of the aircraft and reassigning them.

According to the proposal, Barbados would assume title of the aircraft in return for a surrender of their shareholding in LIAT.

The aircraft and the loan obligation would then be assigned to the new company. At the same time the new company would enter into a wet lease agreement with a third party provider, who has already been identified, for the lease of five aircraft and crew for a period not exceeding 12 months.

The proposal went on to outline that as a first step the new company would be incorporated in Barbados with a registered address. A small team of people comprising Chief Executive Officer, General Counsel and those with specific expertise in finance, flight operations, maintenance and commercial would commence work assembling the necessary operational regulatory documentation and commercial and financial infrastructure.

The proposal has met with a negative response from Prime Minister Gaston Browne.

Browne, who confirmed seeing, said he hopes, “commonsense and reasonableness” would prevail.

“It is unfortunate that they are seeking to take that position,” Browne declared on state-owned television.

The prime minister, who reportedly received the document about three days ago, is expected to take it to Cabinet on Wednesday.

But ahead of those discussions, he warned that the recommendation is not in the spirit of good relations.