Beautiful Virgin Islands

Tuesday, Jun 03, 2025

LIAT returns to skies

LIAT returns to skies

After dodging the threat of liquidation earlier this year, the troubled Antigua-based airline LIAT returned to the skies on Sunday in its first flight since restructuring began in June.

The inaugural flight went between Coolidge, Antigua, and Marigot, Dominica, linking the two remaining shareholder countries, the Antigua Observer re- ported last week after a meeting between the airline’s administrator, Cleveland Seaforth, and the Antigua and Barbuda Cabinet.

Beginning Nov. 8, the newspaper reported, the airline is expected to start regular flights to a limited number of destinations, initially five days a week.
Cabinet Spokesman Melford Nicholas also told the Observer that the airline has been granted permission to fly to the United States Virgin Islands and Puerto Rico, but he did not specify if those destinations would be among the ones served starting Nov. 8.

Liquidation threat


In June, Antigua and Barbuda Prime Minister Gaston Browne announced that the airline - which had been co- owned by the governments of Antigua and Barbuda, Dominica, Barbados, and St. Vincent and the Grenadines, and flew 491 routes to more than a dozen Caribbean countries, including this territory - was likely to liquidate and re-form.

At the time, Mr. Browne blamed the potential collapse on the Covid-19 pandemic. Then-chairman of the shareholder governments, St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves, announced that the airline owed $27 million in debt that it was unable to pay. However, Mr. Browne was vocal in opposing liquidation and advocating a “reorganisation” instead.

In a shareholder meeting in July, leaders came to a consensus to sell the three planes owned by LIAT and charged to the Caribbean Development Bank in order to ease debt and pay down a CDB loan. The shareholders also appointed Mr. Seaforth as administrator. Additionally, both Barbados and St. Vincent and the Grenadines agreed to transfer their shares to Antigua and Barbuda for $1 each.

“The aggregate shares that would be transferred to Antigua and Barbuda would be around 60 percent between the two governments, so I think that’s a responsible proposition,” Mr. Browne said at the time, according to Loop News.

In early October, as part of its restructuring plan, LIAT terminated the employment contracts of 564 employees, retaining just 166 and temporarily laying off a quarter of those, according to the newspaper. Mr. Seaforth wrote in a letter to employees last week not to expect payment anytime soon, inform- ing them that the estimated $70 million in severance and holiday payments owed to them “cannot be made at this time and is dependent upon the outcome of the court-supervised restructuring process.”

Restructuring plan


LIAT’s restructuring plan requires a re-investment of $39.9 million, according to the industry website ch-aviation.com, with the Antigua and Barbuda government prepared to underwrite up to 50 percent of the required recapitalisation.

The remaining $19.9 million is to be raised from the private and public sectors.

In August, Mr. Browne reported interest from other regional airlines and governments, as well as an unnamed entity from an African country he did not identify.

Since the airline grounded its flights, several other regional operators have moved to fill the market gap, including One Caribbean, InterCaribbean Airways and Air Antilles, ch-aviation.com reported.

In June, BVI Airports Authority Chairman Bevis Sylvester said the authority was in “heightened discussions with InterCaribbean [Airways] and Caribbean Airlines, with the hope that those two private partners will be able to expand their BVI routes … so that we can quickly fill the void left behind by LIAT.”

Further administration


Mr. Nicholas said last week that the administrator still has to seek legal consent from the Eastern Caribbean Supreme Court to scale back LIAT’s operations.

“Legally, the administrator would have to go back to court to seek the court’s consent to be able to deal with the type of separation and rehiring at different rates; all of these issues where they would have to officiate existing contracts,” he explained. “These are measures that would have to be done at the level of the administrator and the courts.”

The court also authorised the administrator to terminate the airline’s seven aircraft lease agreements, he said.

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