Share­hold­er gov­ern­ments of the re­gion­al air­line Li­at say the T&T Gov­ern­ment's sub­sidy to State-owned Caribbean Air­lines (CAL) is a vi­o­la­tion of the Re­vised Treaty of Ch­aguara­mas that gov­erns Cari­com.Dr Ralph Gon­salves, Prime Min­is­ter of St Vin­cent and the Grenadines, speak­ing at the end of a share­hold­ers' meet­ing of Li­at in Bar­ba­dos, said the sub­sidy to CAL al­so vi­o­lat­ed the Com­mon Air Ser­vices Agree­ment among Cari­com mem­ber coun­tries and had re­sult­ed in sub­stan­tial loss­es to Li­at.Gon­salves plans to raise these is­sues with Prime Min­is­ter Kam­la Per­sad-Bisses­sar when he comes to Port-of-Spain lat­er this month for a meet­ing be­tween re­gion­al lead­ers and US Vice Pres­i­dent Joe Biden.

He said: "You take the pe­ri­od 2008 to 2012, be­cause we have the da­ta. Li­at ex­pend­ed on fu­el US$106.1 mil­lion in that five-year pe­ri­od but if we were to get the price that CAL paid, we would have spent US $43.64 mil­lion."In oth­er words, we have spent US$62.4 mil­lion on the fu­el bill over this pe­ri­od more than we would have spent if we got the sub­sidy sim­i­lar to CAL."Gon­salves said Li­at paid an av­er­age US$127 for a bar­rel of jet fu­el over the five-year pe­ri­od, while CAL paid an av­er­age price of US$53."That is on the fu­el-sub­sidy side. It is es­ti­mat­ed by the man­age­ment that dur­ing that five-year pe­ri­od we lost 78, 000 pas­sen­gers to CAL be­cause of their sub­sidy, and the rev­enues which we would have lost as a re­sult of that un­fair com­pe­ti­tion would have been US$10.2 mil­lion," he said.

But Gon­salves, who chairs Li­at's share­hold­er gov­ern­ments, said they had no in­ten­tion of pick­ing a fight with the Gov­ern­ment of T&T."This is a se­ri­ous mat­ter, so we have the facts on our side and we have the law on our side but we don't want to fight T&T. We won't want to get in­to any con­fronta­tion with them, but we have to have a sen­si­ble dis­cus­sion on this mat­ter," he said.The Li­at share­hold­er gov­ern­ments are An­tigua-Bar­bu­da, Do­mini­ca, St Vin­cent and the Grenadines and Bar­ba­dos.The share­hold­ers' meet­ing al­so ex­am­ined pro­pos­als to strength­en co-op­er­a­tion be­tween Li­at and CAL, with air­line of­fi­cials in­di­cat­ing they are not con­tem­plat­ing a merg­er but seek­ing prac­ti­cal ar­eas of co-op­er­a­tion.

LI­AT chair­man Dr Jean Hold­er said there have been sev­er­al un­suc­cess­ful at­tempts in the past to cre­ate a nexus be­tween the car­ri­ers, but it was time they re­turned to the draw­ing­board, giv­en the com­pet­i­tive na­ture of the air­line busi­ness."You don't wait un­til you have a sit­u­a­tion–Air Ja­maica as it is about to fall out of the sky, as it were, through bank­rupt­cy. That is not a strate­gic merg­er. You are merg­ing just to save the Ja­maican brand–and even now we are con­cerned about whether that is work­ing or not."While LI­AT and CAL are still fly­ing we need to sit down and say what is the best route to go for us to cre­ate air ser­vices for the re­gion. That should be the goal: how do you cre­ate ex­cel­lent air ser­vices so that our tourism in­dus­try flour­ish­es? And I think it can be done. But we must drop some of the idea that some­body needs to be in charge of some­body else," Hold­er said.

LI­AT has al­so an­nounced that it is hold­ing dis­cus­sions with the Bar­ba­dos-based Caribbean De­vel­op­ment Bank (CDB) to se­cure a long-term com­mer­cial loan to fund its re-fleet­ing ex­er­cise.CEO Cap­tain Ian Brun­ton said the re-fleet­ing ex­er­cise was es­ti­mat­ed at US$100 mil­lion and LI­AT was seek­ing to bor­row be­tween US$60 and US$70 mil­lion from the re­gion­al bank."We are go­ing through a process of en­gag­ing the CDB to ex­plore a long-term com­mer­cial loan. The CDB, of course, has been long-term tra­di­tion­al part­ners with LI­AT and with this en­tire re­gion, so they are our pre­ferred lender, ob­vi­ous­ly, if it is pos­si­ble."We are in the dis­cus­sion stages and in the due-dili­gence stages and so noth­ing is con­crete yet, but it will be the pre­ferred op­tion for us, and I am sure that the CDB wants to as­sist LI­AT too," Brun­ton said.