KINGSTON, Jamaica – It is 2024. I have been searching the regional media for the celebrations of the 50th anniversary of LIAT (1974) Ltd. Alas, I have not seen even a letter. The truth is that the iconic regional air carrier was unceremoniously shuttered in January 2024 – the beginning of the year that would have marked a historic milestone in Caribbean cooperation. We do not know, and we do not care about either our Caribbean history or our Caribbean achievements.
Let us think for a moment. Leeward Islands Air Transport (1974) Ltd, or LIAT (1974) Ltd, or simply LIAT as it was familiarly called, out-served every airline that operated in the CARICOM (Caribbean Community)region in 1974. Those airlines included BWIA, BOAC, PANAM, EASTERN, KLM/ALM, and Air Jamaica.
We in Jamaica might be forgiven; those small, household yellow and orange-chested birds never graced the Jamaican skylines. But how can the people of Montserrat, Nevis, Dominica, Castries (St Lucia), St Vincent and the Grenadines, and Grenada when, for many years that was their only means of movement to their Caribbean neighbours, or link up with one of the Big Birds to England, United States, Canada, France, or Venezuela? Yes, Venezuela was once a very popular destination for persons in the Eastern Caribbean who had “family” living and working there.
The year 1974 was after the first oil shock which saw the quadrupling of crude oil prices. That single act wrong-footed almost every economic activity in the non-oil-producing World. Transportation was one of the worst affected sectors.
It was not only oil-based energy dependent but was very energy inefficient. Court Line, a UK-owned company that owned the small airline, LIAT, and two hotels in Saint Lucia went into liquidation. Many of its UK and other operations closed immediately. The big question in the Caribbean was, what would happen to LIAT?
LIAT provided service to all the CARICOM territories in the Eastern Caribbean as far South as Trinidad and Tobago, and, as hinted earlier, was the only Airline that served several of them. It did not serve Guyana and Jamaica. There was panic. A technical meeting was hurriedly called in St Lucia, I think, on a Thursday, and a Ministerial Meeting the following Tuesday. I represented the CARICOM Secretariat at the Technical Meeting.
I advised against acquisition and suggested the company be allowed to go into liquidation, but without allowing movement of the airplanes. The governments would seek to purchase the assets from the receiver. That would, in all likelihood, involve the loss of air link to some countries for a period, but it would allow the creation of a new entity free of the liabilities of the old company.
The ministers thought the risk of the loss of service was too great. They created a jointly owned company to purchase LIAT as a going concern. They acquired it with all its liabilities but avoided any dislocation. The new company was structured, the shares apportioned and renamed LIAT (1974) Ltd. As an act of regional solidarity, Guyana and Jamaica acquired 10 per cent (five per cent each) of the shares. Another Jamaican, the late Carl Dundas, legal counsel, represented the Secretariat at the Ministerial Meeting.
REGIONAL AIRLINE
- A truly regional airline was formed. It was birthed, owned, managed, and operated by the region. All recognised that it was starting with many handicaps. But all considered it to be vital infrastructure, without which, CARICOM, as a Community of States, could not function. There was no commercial operator that would provide that service without turning to the governments for support. The handicaps included:
- It operated with all the liabilities of the old LIAT, including the administrative costs and inefficiencies such as contract payments, staff and salary levels, and accrued leave.
- It had a route structure with some extremely short legs, and in some cases, subject to load and night-time limitations. “Take-offs” and “landings” contribute disproportionately to the operating and maintenance costs of any aircraft. One of LIAT’s HS 748 aircraft was reputed to have had the record for “Take-Offs” and “Landings” for the aircraft type in the world.
- It was constrained to using only small – 72, 48, 19, 11, and 7-seater aircraft, even as other carriers were moving to larger and larger aircraft for longer and longer flights, and to increase load factor and efficiencies. BOAC and PANAM terminated their service to Guyana because Timehri Airfield could not accommodate the new, wide-bodied 747 Aircraft to which they had moved.
- The need to depend on difficult-to-negotiate, and even more difficult to collect subsidies from multiple governments.
- It had no Capital Budget and was forced to rely on external financial assistance with its strings and loan funds. In changing its fleet from the HS 748, it paid approximately US$1 million in interest charges for bridging finance as one shareholder government withheld support for about one year.
- There was a lack of consistent policy support from stakeholder governments, and competition from opportunistic carriers, such as Carib Express, which was headquartered in Barbados and allowed to operate Short Take-Off and Landing (STOL) jet aircraft on selected LIAT routes until its private sector owners decided that it was no longer profitable.
- Paradoxically, the chief executive officer (CEO) of the main competitor to LIAT (1974) Ltd had a seat on its board from the inception, with no reciprocity.
Despite those and many other constraints LIAT (1974) Ltd:
- Provided consistent service to as many as 15 small Caribbean destinations for nationals and an expanding number of tourists.
- Had a safety record that was second to none.
- Developed code sharing and other arrangements with international airlines which promoted and facilitated the development of the tourism industry in many of the smaller Caribbean islands.
- Trained a range of aviation professionals including pilots, engineers, and flight attendants, many of whom were peeled off by larger commercial airlines in and outside of the Caribbean.
- Developed a distinct Caribbean Brand and Caribbean Image, despite the many interpretations of its initials, such as, “Leave Island Any Time”, and “Luggage in any town”. People knew it would arrive and, more importantly, it would arrive safely.
DISCLOSURE
For full disclosure, I was a member of the LIAT Board for more than 20 years. A person who hates to fly, I had thousands of “Take-offs” and “landings” by those faithful regional servants to do my job.
I am a lifelong Caribbean regionalist. But my lament for the disdainful and silent demise of LIAT (1974) Ltd is not sentimental. The demise fits into a growing disregard for regionalism and a failure to educate the new generation. July 4, 2023, was the 50th anniversary of the formation of CARICOM.
There was a decision to have a year-long celebration. July 4, 2024, is fast approaching and, unless I have been living on another planet, there has been no regional nor national programme or activity to inform or involve our children or adult communities. How can one cherish, maintain, or take advantage of that which they do not know?
I lament because Caribbean states cannot prosper or survive in peace in this global environment unless they cooperate and have institutions to underpin and facilitate such cooperation. Transportation is one of the prime infrastructures.
Byron Blake is former CARICOM assistant secretary general and a former board member of LIAT.
