Unfair competition: LIAT denounces Caribbean Airlines subsidy

St. John’s Antigua- LIAT has agreed to challenge the Trinidad & Tobago government for providing “unfair” subsidies to Caribbean Airlines while at the same time pushing for closer linkages with the Port of Spain-owned and operated entity.

LIAT has gone as far as to formulate a legal opinion that Chairman of the LIAT Shareholder governments, St Vincent & the Grenadines Prime Minister Dr Ralph Gonsalves said would be presented to Prime Minister Kamla Persad-Bissessar.

We will make available also the facts concerning the extent to which LIAT has been disadvantaged as a result of the unfair competition,” Gonsalves told a post-meeting news conference. He argued that CAL pays US $50 for a barrel of aviation fuel while LIAT forks-up roughly US $120 for the same.
Terming the figures as a “big problem,” Gonsalves added that the “discrepancy was creating challenges for us.”
The subsidy to CAL is expected to be discussed at the political level later this month when Dr Gonsalves meets with his counterpart, Bissessar, in Port of Spain.
The meeting decided that Dr Gonsalves would be the only prime minister going to Trinidad & Tobago.
According to LIAT data presented at the gathering, between 2008 to 2012, LIAT spent US $106.1 million on fuel while CAL for the same period, spent US $46.4 million.
The average cost over that period for LIAT was about US $127 a barrel as compared with US $53 for CAL.
LIAT pointed out that it lost 78,000 passengers as a result of the subsidies provided to its competitor.
“The revenues we would have lost as a result of that unfair competition would be US $10.2 million,” Dr Gonsalves said.