by David Jordan
Former Director of International Trade and Investment in the Saint Lucia Government service, David Jordan, has said that the most recent public pronouncements of both the current Prime Minister and the Leader of the Opposition of St Lucia on LIAT offer nothing innovatively in their statements, to ensure success and viability of the regional airline LIAT.
Their statements to say the least are on parallel paths.
The woes of LIAT are perennial as espoused from one political administration or opposition to the next in the Caribbean islands where LIAT serves. With change of political administrations in the islands serviced by LIAT, one only witnesses “landing rights wars” if not landing inducements tactics, price increases of airport taxes and airline tickets which continue to be characteristic of regional air travel in the respective territories.
Jordan an Economic Policy specialist, therefore proposes that “the mantle of innovative action and management should be extended to the private sector of the region which serves LIAT” — specifically he stresses a select group of highly successful business people in the Caribbean region ought to be the directorate of the airline LIAT, in preference to politicians.” There are useful as well as successful adaptable business models, unbridled by political decisions which can be adopted. It is a shame that the only publicised rhetoric that the Caribbean public is accustomed to hearing is the financial woes of LIAT. He says noting that most countries where LIAT services regional travel is of critical importance yet “I cannot recall hearing of financial accountability an important element or practically seeing financial statements being publicised, published or known to the general public so that the learned could analyse those financial statements and offer guidance and or comment.” One continuously hears of the intermittent crisis situations warranting supposed financial bailouts. At this time, it is the pilots making a sacrifice for a “10% salary cut to save the airline” while earlier this year, there was a desperate call for “$5 million from supporting governments.”
In the same vein, I think it is now opportune to change the policy direction and a new innovative business formula towards a successful operation if this trend continues to occur. How can one effect changes doing the same thing over and over again with same tried management model? The plea is to invite a team of successful business owners from the regional private sector, to manage the airline with a well-defined Terms of Reference — including the social need argument.
Thus while the region needs LIAT as a reliable airline to facilitate regional travel, there must be a successful formula of innovation that resides in the ethic and psyche of successful businesspersons in the region which can be adapted to ensure the success of the airline. Innovation that can be adopted to eliminate the “financial waste and losses” which have been managed by the politicians in the history of the airline. There will be a difference to the operations of LIAT should this new approach be adopted such that the importance of LIAT will be explored from several spheres including the movement of goods.
The beneficiaries of a LIAT service need efficiency, price affordability and safety as well as financial accountability. Jordan warns, however “while hoteliers should offer advice, hoteliers should never be involved as directors in this new model. Hoteliers rely too much on the culture of incentives and subsidies. Governments’ role, should be emphasised as a “facilitator of the enabling regional environment, adopting policy of a uniform and identical stance across the region where LIAT flies” to support the private sector-run LIAT – defined as not being airline political managers. It is notable there are glaring issues which ought to be addressed. The high airfares in the region deter travel. Too many Caribbean nationals and visitors lament they have not visited a neighbouring island but would have visited North America and or Europe instead.
Taxes feature highly in the proportionate cost of an airline ticket. Governments cannot guide the airline to success with the “laments, petty quarrelling and or bragging rights” while the airline is faced with its major financial challenges. Thus, if you are looking for an innovative solution, I think it is time that the politicians allow the highly successful business gurus of the region manage LIAT to resolve the current demise which politicians will continue to face but don’t seem to have a clue as to how to resolve.
Over to you Chairman of LIAT, over to you Caribbean Development Bank and I hope this note enables the debate towards a solution for LIAT.
David Jordan is a UWI and Columbia University trained Economist and has focused on Economic Policy and International Trade in his professional career [email protected] www.giordanoassociatesaltd.com
