A lot of back slapping at Liat

(BBC) – Liat’s owners are congratulating themselves for keeping the airline in Caribbean hands and out of Sir Allen Stanford’s.
More than two years ago, the debt-ridden airline began negotiating with Mr Stanford over a merger with his Caribbean Star airline.

In fact a new name for a single airline was even floated.
But eventually, three island governments increased their stake in Liat and opted instead to buy the assets of Caribbean Star, which was closed down in November 2007.

St Vincent and the Grenadines Prime Minister Ralph Gonsalves said that purchase decision has been vindicated by Mr Stanford’s current troubles.

Last month, US regulatory authorities accused Mr Stanford of a “massive fraud” in a civil suit. He denies any wrongdoing.
When Caribbean Star was launched, there were fears for the future of Liat, which had lost money for more than two decades at least during which competition was fragmented.

Liat complained bitterly that Mr Stanford was seeking to put them out of business by cutting fares and duplicating routes.
Speaking at the launch of a new service to Canouan by the carrier, Dr Gonsalves said that if Liat had been allowed to go under, a surviving Caribbean Star would have been subject to the decision of the US courts hearing the Stanford case.

“There would have been a receiver, the assets would have been frozen… we would have had a real problem, a crisis, a genuine crisis.”

He said that these developments have highlighted, even more, the need to keep Liat in regional hands.
Barbados, now the major single shareholder; Antigua, where the airline is headquartered; and St Vincent and the Grenadines stuck by Liat even as other governments shunned it. St Lucia and Grenada even went so far as to court foreign airlines after complaining about the quality of Liat’s service.

The Liat transaction did come at a price however.
At the time it was announced that the Caribbean Development Bank had loaned the three governments $60 million to complete the assets acquisition.

The package was said to include three loans: $32.7 million to Barbados, $21.8 million to Antigua and $5.4 million to St Vincent.While Mr Stanford had suffered a rare setback in the Caribbean, he was apparently not finished with the airline business in the region.

Shortly after the closure of Caribbean Star, it was reported that officials of his Stanford Financial group were due to meet with executives of Air Jamaica regarding a partnership agreement.

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