Regarding the airline’s routes and their profitability, he said that of the top ten performing routes, two of them are Barbados–St Vincent and Port of Spain-St Vincent.
The other eight routes, which make “the most positive contribution to the overhead” are Antigua-Barbados, Antigua-Dominica, Antigua-St Kitts, Antigua-St Lucia, Barbados-Dominica, Barbados-Grenada, Barbados-St Lucia, and Tortola-St Martin.
In 2015, 14 routes generated negative contribution margins: Antigua-San Juan, Barbados-Port of Spain, Barbados-St Martin, Tortola to San Juan, Martinique to St Lucia, Guadeloupe to Dominica, St Martin to St Thomas, St Martin to St Croix.
Gonsalves said LIAT needs to keep some of these routes, saying that the Barbados to Port of Spain route has a lot of potential but has increasing competition from Trinidad’s national carrier, Caribbean Airlines (CAL).
“And you have scheduled cancellations so, obviously, somebody is going Barbados-Port of Spain, they would take CAL rather than taking LIAT, but it has potential.”
LIAT other shareholder governments are Barbados, Antigua and Barbuda, and Dominica.
Gonsalves said the shareholders have asked the management to continue to deal with the non-performing routes.
“We are not telling them which routes. They are the management. They have to decide which routes, because a route may be non-performing, but it has the potential to perform.”
He said his government has no problems whatsoever with other airlines competing with LIAT.
It is “absolutely ridiculous” to say his government is not giving CAL a licence to fly to St Vincent and the Grenadines, he said.
The Prime Minister told parliament that what has happened is that CAL would see which routes fit within its own plan and which routes are profitable for it.
LIAT is interested in having a nexus with CAL and other small operators “to take up the slack in certain areas”, he said.
Gonsalves has criticised countries serviced by LIAT for not investing in the airline.
He urged countries that want more flight to “pay to play”.
“Put money in the airline, because, after all, we are now having to put in, before the end of the year, we have given the commitment for EC$600,000 out of this five million dollar equity injection,” he said of the LIAT’s latest request for capital from its owners.
“And I want to make this point that all the countries which get LIAT without any capital injection, without any equity injection, they pay for all the international carriers. They give letters of credit and when you don’t reach for any period up for what the airline says would be their margin, well, then the payment is made. It comes out of the tourism promotion budget of these countries,” Gonsalves said.
He promised that he will defend the interest of SVG and LIAT and ensure that it delivers better service to the nation.