Vincentian Prime Minister Dr Ralph Gonsalves, the chairman of shareholder governments in LIAT, has revealed that the regional carrier headquartered in Antigua, is taking its case against the Trinidad and Tobago-owned Caribbean Airlines to the Caribbean Court of Justice (CCJ), claiming unfair competition.
Dr Gonsalves disclosed that the airline’s legal team is already looking into the matter after the airline was forced to lower ticket prices between Trinidad and Grenada, and Trinidad to Barbados – two lucrative routes – because of stiff competition from CAL.
LIAT has so far recorded over $21 M in losses for the first half of the year, and is projected to spend an additional $26 M extra on fuel this year, compared with 2010. Dr Gonsalves noted that half of CAL’s fuel costs are subsidized by the Trinidad and Tobago government, a clear violation of the Caricom Air Services Agreement of 1997-97.
The CCJ has been established to settle trade and other disputes among the member states of Caricom.
Dr Gonsalves also stated that LIAT will likely drop unprofitable routes unless the governments of those countries agree to offer support for the airline.
He said when the Caribbean leaders meet and the matter of subsidy for LIAT is raised, governments usually agree that the airline needs greater support in order to survive. But when the meetings end and LIAT’s management holds discussions with the governments concerned, nothing else happens.
The Vincentian Prime Minister added that the situation that LIAT now finds itself in leaves it with no choice but to make necessary, albeit painful, decisions.