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Grenada has become the fifth shareholder government of struggling regional airline LIAT, joining Antigua and Barbuda, Barbados, Dominica, and St Vincent and the Grenadines.
Minister of Trade, Industry and CARICOM Affairs Oliver Joseph made the announcement at the government’s weekly conference yesterday, saying that Grenada had pledged its continued support.
Grenada’s investment in the Antigua-based airline comes as regional governments work on a plan to save the over island-hopping carrier from going under.
Joseph said the island would provide funding under a Minimum Revenue Guarantee (MRG) framework – which the shareholders have been pushing for from islands that benefit from LIAT’s service. Under the MRG model, governments would pay a minimum guaranteed amount to LIAT if passenger numbers on flights fell short.
“That is a model we think is fair if we want to keep the LIAT flying,” the CARICOM Affairs Minister said.
“When we look at the figures, the number of passengers LIAT brings to Grenada…of course the multiplier effect is great. LIAT brings in thousands of visitors to Grenada every year and therefore, from an economic and social point of view, Grenada had to support LIAT, because not supporting LIAT would have been a loss of revenue and economic development to our country.”
Meantime, chairman of the LIAT shareholder governments, Dr Ralph Gonsalves of St Vincent and the Grenadines says that despite reports out of Antigua that founder of the Virgin Group Sir Richard Branson has expressed interest in investing millions of dollars in the cash-strapped airline, he has received no formal expression of interest.
Chief of Staff within the Office of the Prime Minister in Antigua and Barbuda, Lionel Hurst, told reporters following a Cabinet meeting last week that the British business magnate, investor and philanthropist has proposed investing several million dollars to “wet lease several aircraft”.
“They would fly from Fort Lauderdale to Jamaica, Haiti and down into Antigua and Barbados. The whole idea is to enlarge LIAT, rather than collapse LIAT or making it a smaller entity,” Hurst had said.
However, Prime Minister Gonsalves told a radio station in St Vincent yesterday that he knew nothing about that.
“As the chairman of the shareholders, I have not been made aware of that; nobody has contacted me about that,” he said. “Whether Branson said so in an off-hand way or in a serious manner, I don’t know…I don’t usually jump like that when rich people make a suggestion until I see something really meaningful,” he said.
The Vincentian leader acknowledged LIAT had in the past explored the idea of expanding to other destinations, but that was put on the backburner because the airline was struggling with its core markets.
However, he said, “you may well have to expand to make some more money. And if you are expanding to make more money, you might need to find a partner in the jet service area, but I’m not giving legs to what you and I have read about what the minister from Antigua said with relation to Sir Richard Branson because I don’t know anything official.”