Struggling LIAT may require more than 6 percent salary cut from employees to remain flying

The cash-strapped Antigua & Barbuda-based regional airline, leeward airlines air transport (LIAT), has revealed that despite pilots and its workers across all its destinations agreeing to a 6 percent salary cut, the airline is still facing a severe financial problem and may require a greater salary cut from its employees.

According to an internal document seen by the Caribbean Media Corporation, following a shareholders’ meeting in St. Vincent & the Grenadines last Friday, the regional airline said the 6 percent is not enough to keep it in the air.

“The shareholders are of the view that this proposal did not go far enough and that the 6 percent cut did not meet the immediate cost-reduction objectives of the company at this time,” the airline said.

The document noted that the shareholders are “considering additional measures to address the financial challenges of the airline, and that it would continue to update staff on discussions and the proposed measures that will be agreed upon.”

Efforts to get an official comment from the airline, have so far proven futile. Last month, pilots employed with the regional airline agreed to a less than 10 percent salary cut in a bid to keep the airline in the air.

The shareholder governments of the airline are Antigua & Barbuda, Barbados, Dominica and St. Vincent & the Grenadines, and they have been seeking to get other Caribbean countries to contribute a total of US$5.4 million in emergency funding needed to keep the airline in the sky.

At the same time, 11 destinations had been given until March 15 to respond to the airline’s minimal revenue guarantee proposals.

Julie Reifer-Jones, CEO of Caribbean airline Leeward Islands Air Transport (LIAT). PHOTO/LIAT

Under a minimal revenue guarantee model, it is likely that a few flights may be cut if the government is not prepared to fund them with a guarantee.

Trade unions representing the airline’s workers at its 15 destinations had, during a 6-hour meeting in Barbados with Prime Minister Mia Mottley, and her St. Vincent & the Grenadines counterpart, Ralph Gonsalves, agreed in principle to a 6 percent salary cut, pending further deliberations with their members.

The President of the Leeward Islands Airline Pilots Association, Carl Burke said last month that during a meeting with LIAT a request had been made for the 10 percent pay cut across the board, and that the pilots “wrote to them and said we did not have the confidence in LIAT’s management to take us out (of this), and we were very cautious about making an investment in the company at this time.

He said that pilots “actually voted” on the salary cut, which has since been communicated to Prime Minister Mottley.

The workers had also agreed to allow LIAT to suspend its matching contributions to the 5 percent deductions from their wages for a pension fund scheme. The Antigua & Barbuda-based Observer radio reported Friday that there seems to have been a misunderstanding between the workers and LIAT management regarding the payment cuts.

It said that the workers were of the impression that the salary cuts would come from their basic salaries, while LIAT thought the 6 percent cut would be from all the earnings of the worker. -(CMC)