Dr. Ralph Gonsalves, Prime Minister of St. Vincent, a government shareholder in Liat, says another high level meeting is to be set to finalise the rescue strategy for the regional carrier. - File

The government shareholders in Liat will approach Barbados-based Caribbean Development Bank for a loan to recapitalise the flagging regional airline Liat, Dominica Prime Minister Roosevelt Skerrit said Wednesday.

Skerrit, speaking on the state-owned radio service of the Dominica Broadcasting Corporation, said that the regional leaders had made 'some progress' regarding the 50-year-old carrier.

"What we are seeking to do is to recapitalise Liat and to create almost in a sense, a new entity.

Administration prepared

Skerrit said that his administration was prepared to provide the necessary market support to the carrier, "so that we can not only maintain the number of flights we have coming but also increase the number of flights to Dominica; and to allow for traveling throughout the region to be much easier."

It's not clear the full nature of the buy-in on market support, given St. Lucia's recent deal with American Eagle in direct competition with the regional carrier that it co-owns. St Lucia has said defiantly that it was prepared to take a smaller equity stake in Liat, insisting that its services were too expensive and a deterrent to travel.

Earlier, St. Vincent and the Grenadines Prime Minister, Dr. Ralph Gonsalves said that Caribbean countries served by Liat agreed to provide support for the island-hopping carrier. Both premiers were speaking from Bridgetown, venue of the 28th Caricom heads of government conference.

But: "The nature and extent of the support were not specified. The management of Liat will have a one-on-one with the various countries and the support may take different forms," he said.

"It may take the form of market support for specific routes, specific time; it may take the form of some arrangement in relation to landing fees; it may take the form in restructuring when there has to be severance pay."

Pay down debts

The Vincentian PM said if approved by the various governments, the increased support would be used to pay down the airline's debts to make it more profitable for shareholders and, in time, cheaper for passengers to fly.

He further revealed that after having private discussions with at least two of his colleagues, whom he declined to name, Gonsalves said they agreed to recommend assistance for Liat to their respective cabinets.

Trinidad's Patrick Manning later told reporters that he would raise the matter with his Cabinet on Thursday.

The leader of the twin-island republic was very clear, though, that his government was prepared to make hard decisions on its contribution to Liat in much the same way it treated BWIA, saying the liquidation strategy had proven to be the right move.

The replacement carrier Caribbean Airways Limited launched in January had performed "extremely well" and looked set to return a profit earlier than anticipated, Manning said.

"We are not standing, my dear friends, on sentiment," he said.

Gonsalves said the heads would further discuss Liat during a special high-level regional meeting soon to be convened, but he warned that the shareholder governments - Antigua and Barbuda, Barbados, and St. Vincent and the Grenadines - were not prepared to have a "continual university seminar" with other regional governments on the matter.

- CMC