The owners of loss- making West Indian carrier LIAT have committed themselves to a financial restructuring, so long as the airline's newly appointed management produces a viable business plan which, in turn, is dependent on establishing an international alliance.
LIAT's new management team, headed by former Aer Lingus executive Garry Cullen, hopes to present and secure board approval of the three-year rescue plan by the end of this month. Providing the plan also wins trade union acceptance, it is understood that the shareholders will agree to refinance LIAT, which is around $30 million in debt.
Last year, Speedwing produced a restructuring plan for LIAT, but it ran into opposition over the question of cutting the carrier's 900-strong workforce. Natural attrition and a freeze on recruitment, however, has since reduced the number of jobs to within 100 of the 730 target recommended by the British Airways consultancy company.
The success of the new business plan largely hinges on the Antigua-based airline securing the support of an alliance. BWIA, which owns 29% of LIAT, has offered to enter into a co-operation deal making the carrier its regional feed into Antigua, Barbados and Trinidad (Flight International, 30 May-5 June).
LIAT sources warn that "simply codesharing" with BWIA is not enough. It wants a full partnership encompassing joint marketing, procurement, branding, facility use and possibly extending to BWIA's proposed tie-up with United Airlines. LIAT at the same time is keen to maintain its feeder relationships with Air Canada, British Airways and Virgin Airlines and officials hint that a deeper relationship with the latter two offers a fall-back alternative to BWIA.
Meanwhile, the airline has moved to improve its operations and regain traffic lost to start-up Eastern Caribbean Express. It has axed loss-making services and grounded two of its nine older Bombardier Dash 8-100s to relieve pressure on maintenance. In the longer term, it wants to move to an all Dash-8-300 fleet.
Source: Flight International
