Regional airline LIAT, headquartered in Antigua is taking its case against the Trinidad and Tobago-owned Caribbean Airlines Limited (CAL) to the Caribbean Court of Justice (CCJ) claiming unfair competition.
The airline’s chairman of shareholder governments, Dr. Ralph Gonsalves disclosed that the airline’s legal team is already looking into the matter.
LIAT has so far recorded over $21 million in losses for the first half of this year and is projected to spend an additional $26 million on fuel this year, compared with 2010.
Dr. Gonsalves, the St. Vincent and Grenadines prime minister said the airline had to lower ticket prices between Trinidad and Grenada and Trinidad to Barbados – two lucrative routes because of stiff competition from CAL.
He 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 l997.
The CCJ with headquarters in Port of Spain, Trinidad was established to settle trade and other disputes among CARICOM member states.
Dr. Gonsalves said that LIAT will likely drop unprofitable routes unless the governments of those countries agree to offer support for the airline.
More details have emerged about LIAT’s plan to stem it losses – estimated at $21.5 million – including reducing staff by 200 and possible court action against a competing airline.
Gonsalves said the company is hoping to reduce the workforce of more than 900.
He said the airline’s passenger revenues have fallen faster than operating costs and already stands at $11.4 million less than last year.