Regional: CDB distances itself from sale of LIAT aircraft

The Barbados-based Caribbean Development Bank (CDB) says it is not a party to the sale agreement regarding the aircraft belonging to the regional airline 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.”

The CDB statement followed comments by Antigua and Barbuda Prime Minister Gaston Browne earlier this month that the Antigua-based LIAT 2020 had received its Air Operator’s Certificate (AOC), but he criticized the Barbados-based Caribbean Development Bank (CDB) for further delaying the airline’s return to the regional skies.

Browne said startup of LIAT 2020 was being hampered by the slow response of the CDB to the sales agreement for the planes.

Earlier this year, the Antigua and Barbuda government said it would pay US$12.1 million into an Escrow account for the acquisition of other planes owned by the CDB as efforts continue to launch LIAT (2020) Limited.

The government has already made an offer to purchase the three aircraft owned by the CDB and had been used by the inter-regional airline, LIAT, which is owned by the governments of Antigua and Barbuda, Barbados, Dominica and St Vincent and the Grenadines, but ended its operations on January 24 this year.

Browne 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.

The shareholder governments of the former airline are Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines.

“I am now calling on…publicly and I will be writing to them formally on Monday, calling on all of the shareholding governments of LIAT (1974) Ltd to subordinate their interest in that money and also the Caribbean Development Bank too to subordinate its interest and to make the US$12 million available to the former workers of LIAT (1974) as an ex-gratia payment in lieu of the severance that would have been payable.”

Browne said that this move would not harm the shareholder governments or the CDB, adding “because when you look at the amount, you talking about in the case of the Barbados government say, US$6 million.

“Six million dollars in the context of the size of the Barbados government cannot hurt that government. In the case of the Antigua government, you are talking about four million US dollars (and) that cannot hurt the Antigua government. But you have staff out there hurting for years.

“In the context of the Caribbean Development Bank they have nothing to lose because it’s a sovereign debt that we have been paying,” he said, adding that after the US$12.1 million is paid over to the workers, the shareholder governments could then pay the difference to ensure that the workers receive the 100 per cent severance owed to them.”

In December 2022, the St Lucia government made good on its promise to pay compensation to the St. Lucia-based employees of the airline after Prime Minister Phillip J Pierre said that his administration had entered into an agreement with the non-management LIAT workers in Castries who had been terminated by the closure of the company.

In March last year, the Barbados government said it would pay the three-year-old outstanding severance owed to former employees of LIAT(1974) amounting to BDS$10 million (One BDS dollar=US$0.50 cents).

Antigua and Barbuda is now involved in an agreement with the private Nigerian-based airline, Air Peace in the establishment of LIAT 2020 airline. Earlier this year 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 Antigua and Barbuda government said it would pay US$12.1 million into an escrow account for the acquisition of other planes owned by the CDB as efforts continue to launch LIAT (2020).

In its statement, the CDB said following the collapse of LIAT (1974) Limited, the shareholder governments agreed to the sale of LIAT’s three aircraft to the Antigua and Barbuda government.

“An aircraft sale agreement, for the sale of the three aircraft over which the Caribbean Development Bank (CDB) holds mortgages, has been executed between the Administrator for LIAT (1974) (as the seller) and the Government of Antigua and Barbuda (as the buyer),” it said.

The CDB said that it “continues to take a strong interest in the development of regional transportation and remains a strong advocate for the development of the Caribbean’s transportation networks and infrastructure”.

In February, the government had said that “following the consummation of the sale, the three aircraft will form the basis of the fleet that will cause LIAT 2020 to become a viable entity. It will partner with Air Peace to provide the much-needed intra-regional and extra-regional services to move people and cargo throughout the Caribbean.”(CMC)

(guardian.co.tt)