Cob­ham: Pay Up or Lose LIAT Ser­vice

The Star (St. Lucia) - - CLASSIFIED -

Ho­race Cob­ham, for­mer pres­i­dent of the Bar­ba­dos Bankers As­so­ci­a­tion, who was in­stru­men­tal in rais­ing nearly BDS$50 mil­lion through a re­gional bond is­sue to en­sure LIAT’s sur­vival over a decade ago is ad­vis­ing share­holder gov­ern­ments to with­draw ser­vice from Caribbean coun­tries that refuse to pump cash into the strug­gling air­line.

At present, only An­tigua and Bar­buda, Bar­ba­dos, Do­minica and St Vin­cent and the Gre­nadines con­trib­ute fi­nan­cially to the cash-strapped car­rier. Some Caribbean lead­ers, in­clud­ing Dr Keith Mitchell of Gre­nada and Dr Ti­mothy Har­ris of St Kitts and Ne­vis have made it clear they would not in­vest in LIAT. The St Lu­cian prime min­is­ter Allen Chas­tanet re­cently joined that list, voic­ing con­cern over the level of po­lit­i­cal in­ter­fer­ence in the car­rier’s de­ci­sion-making process.

With­out making ref­er­ence to any of these coun­tries, Cob­ham said some tough de­ci­sions would have to be taken if LIAT were to be made into a vi­able en­tity. Among those de­ci­sions, he said, was to stop serv­ing the coun­tries that did not con­trib­ute fi­nan­cially.

“Some routes aren’t com­mer­cially vi­able. So if you are say­ing at the po­lit­i­cal level we need LIAT to fly there, then you will have to pay for it and that is where the prob­lem ex­ists in LIAT.”

Cob­ham made it clear LIAT was play­ing an im­por­tant role in Caribbean avi­a­tion and was ‘not some­thing you can get rid of’. How­ever, the for­mer CIBC and Royal Bank ex­ec­u­tive said the air­line needed to im­prove its in­ter­nal op­er­a­tional struc­tures and hold man­age­ment ac­count­able. He be­lieved the air­line was do­ing well on the rev­enue side but needed to ad­dress its ex­pen­di­ture.

“LIAT should al­ways be com­mer­cially vi­able. So once you start with that premise, then the other things will fall into line.

“Com­mer­cially vi­able does not mean you charge what­ever you like and have all sorts of in­ter­nal leak­ages that burn money. No. Force LIAT to have the right or­ga­ni­za­tional struc­ture, the right fleet struc­ture [and] the right hub struc­ture,” he ad­vised.

Cob­ham also felt there was po­lit­i­cal med­dling, point­ing to the num­ber of em­ploy­ees at LIAT’s head­quar­ters in An­tigua and Bar­buda.

The for­mer banker said he was proud to have raised US$23.5 mil­lion to help LIAT at a time when the air­line was ‘on the verge of death’. How­ever, he ad­vised against a sim­i­lar mea­sure to­day, say­ing it was not a good idea to fund losses on a con­tin­u­ous ba­sis be­cause it was not sus­tain­able. (Bar­ba­dos TO­DAY)

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