ST. JOHN’S, Antigua - The Antigua and Barbuda government says it remains confident that the new regional airline, LIAT 2020 will begin commercial operations early next month.
But the government says it is still awaiting a response from the Barbados-based Caribbean Development Bank (CDB) regarding its call for the bank and regional shareholder governments in the bankrupt airline to relinquish their interest in an escrow fund and use the finance to meet the severance payments owed to the former employees.
The shareholder governments of the former airline are Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines
A statement issues following the weekly Cabinet meeting, noted that the ministers “held a very brief discussion on LIAT (2020) and the possible startup date for its re-commencement of commercial flights.
“Although a precise date has not yet been decided, the Cabinet is confident LIAT will take to the skies in early August 2024,” the statement said.
Antigua and Barbuda is now involved in an agreement with the private Nigerian-based airline, Air Peace in the establishment of LIAT 2020 airline and earlier this year Prime Minister Gaston Browne had said that Air Peace would be putting in close to US$65 million, while his government is investing US$20 million.
In addition, the government said said it would pay US$12.1 million into an escrow account for the acquisition of other planes owned by the Barbados-based Caribbean Development Bank (CDB) as efforts continue to launch LIAT (2020) Limited.
But Browne has since said that the CDB and the shareholder governments of LIAT (1974) Limited should relinquish their interest in the escrow funds.
“The Cabinet is still awaiting a decision by the Caribbean Development Bank (CDB) in relation to 12.1 million US dollars which Antigua and Barbuda has paid over for the purchase of three aircraft, and the re-purposing of that money to pay former LIAT employees,” the Cabinet statement noted.
But in a statement last month, the CDB said it is not a party to the sale agreement regarding the aircraft belonging to LIAT (1974) that went bankrupt earlier this year.
It said its “only role is to provide the necessary consent for the sale, which it has done” and that under the sale arrangement agreed to by the shareholder governments, they “approved that money from the sale should be proportionately allocated towards paying outstanding balances on the CDB loans that were initially made to the shareholder governments to support LIAT (1974) Limited’s operations.
“The decision about the use of the sale proceeds rests with the shareholder governments. CDB is not involved in the financing or any aspect of the operations of LIAT 2020.”
Browne had said he would be writing to the shareholder governments of the collapsed regional airline suggesting that they relinquish their interest in an escrow fund and use the finance to meet the severance payments owed to the former employees.
“The Antigua and Barbuda government has always agreed to and maintained that the LIAT workers should be paid gratuitous payment representing the severance that would have been payable if the company had assets,” Browne said.
He said his administration had initially put forward a proposal to pay 50 per cent, but was reduced to 30 per cent “because of the lack of cooperation of the Antigua and Barbuda Workers Union (ABWU).
But the ABWU is insisting that the former LIAT workers, including pilots, are owed millions of dollars (One EC dollar=US$0.37 cents) in severance and other benefits and has been calling on the government to negotiate the package.
