Letter to the EC Prime Ministers about LIAT

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bimjim
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Letter to the EC Prime Ministers about LIAT

Unread post by bimjim » Fri Jul 21, 2017

19 July, 2017

Gentlemen…

Windward Islands Airways NV (Sint Maarten) yesterday declared a PROFIT of US$3.8 million.
Last year Cayman Airways showed the Cayman government that it was slowly pulling out of debt. The common denominator is that in BOTH cases the politicians stopped interfering with the airlines and installed professional management to operate them without interference.

Caribbean Airlines is now being impacted by the wrong choice of aircraft. Their ATRs are grounded, the turboprop pilots were on strike, and the Tobago government is calling for a change of airplane. They bought their ATRs for the same reason as LIAT – one individual getting commissions by selling the wrong airplane to taxpayers by fooling the people who were supposed to know better – the Chairman and Board.

To make matters worse, the one doing the selling was the new CEO – what happened to our ethics?

I don’t care about the financial problems of oil-rich Trinidad, but had there been JUST ONE person on the LIAT Board – such as Gatesworth James – who had a fraction of a real clue about airplanes and airlines (or knew who to call), the false parameters presented would have been discovered, the wrong aircraft choice would not have been made, the “meltdown” would not have happened, and pretty much every screw-up, delay and cancellation due to tailwinds and crosswinds since then would not have occurred.

LIAT never had any these problems with the Dash-8s, but in the name of profit SOMEbody has now walked away a VERY rich person and left the Caribbean taxpayers holding the poop-bag of US$100 million - now being held by the shareholder taxpayers - when it could have cost a mere US$10 million to have ALL of the existing very hardy Dash-8s refurbished by Bombardier to brand new condition and zero cycles. They may even have been able to re-commission the two Dash-8s whose records were lost in the hangar fire.

CHANGE is necessary.
CHANGE is vital.
CHANGE MUST HAPPEN, and SOON.


You all just came back from to a CARICOM Summit in Grenada - yet as a group you have STILL done nothing positive about LIAT or regional aviation but continue to talk and ask for even more “studies” from the CDB, when the facts are evident and previous studies have already been done.

SHAME ON YOU.

So I will reiterate my considered opinion, previously sent to you… if LIAT is to survive, all three of these conditions need to be met…
  • • the politics and political appointees MUST be removed from the airline in its enteirety - at all levels, and...
    • there MUST be a Board who are knowledgeable in aviation and pro-active, and who actually understand the intricacies of anything about the airline that is being presented to or discussed with them, and...
    • there MUST (at least initially) be a “turn-around artist” with global experience (and preferably also some eastern Caribbean experience) who is able to pull the airline out of this constant repetition of bankruptcy conditions, to move it in the correct direction while at the same time innovating to ensure it becomes a successful and profitable business. The discomfort will be short and temporary.
FACT: What is happening at LIAT now is nothing new.

I trained as a Commercial pilot in 1970, and worked for LIAT as a pilot from 1980 to 1996. For eight of those years I was Secretary of LIALPA, privy to the inside scoops and management machinations the line pilots never heard about. I can ASSURE YOU that this exact same pattern of political appointment, management abuse and wanton waste of Company funds was rampant even back then.

For instance, THREE TIMES LIAT management has dragged-out negotiations with the pilots over 10 years (each) for just a one-year contract - each of which cost the airline $3 million in salaries just for the senior managers and senior pilots to sit there deliberately getting nowhere. That amount does NOT count the cost of the ensuing sick-out nor the cost of dealing with passengers nor the lost revenue. The total losses PER EVENT probably surpassed US$50 million. Dr. William Warren-Smith was there at the end of the first sick-out event and was so staggered by the appalling stupidity of his management he walked out of the meeting.

A more accurate term to describe some management teams I saw would be deliberate mismanagement, since the amateur, arrogant, unprofessional management of the day was actually creating problems – NOT solving them.

FACT: In the intervening 20 years NOTHING HAS CHANGED.

Whether you like my saying so or not, the problems with this airline do not lie with the employees, or even with management or Board, they lie with YOU - the decision makers who are the political representatives of the actual shareholders. Over the years, between the various Prime Ministers, Board and executive management, the faces keep changing, but the same stupid-to-the-core oversight (Board) and organisation (management) remains stubbornly steadfast. There is no valid reason for it - except perhaps “we like it so”.

LIAT IS A REGIONAL MONOPOLY WHICH FAILS THROUGH OVERSIGHT & MANAGEMENT INCOMPETENCE - NOT THROUGH WHO OWNS THE SHARES.

LIAT does NOT need more shareholders. Regardless of what 11% minority shareholder (and 11% minority loss-holder) Mr. Gonsalves believes – because even if Grenada, St. Lucia and St. Kitts do invest, if there are no changes when next year rolls around then the same financial demands will be there again. And the year after that - and the year after that. It is sheer insanity that YOU the shareholders diligently keep everything the same and every year still expect different results.

What LIAT DOES need is proper management at the very top – a global experienced seasoned professional who can assess what is going wrong, what it can do right, and how best to take it into the future. What LIAT needs is a CEO who has that global experience to both know instinctively what to do to fix it, how best to innovate for the future. EVEN IF ONLY AT FIRST. You MUST change the formula to reach a different result.
  • Here is a story out of Reuters in Toulouse, France, dated June 9, 2017:
    “Wanted: 530,000 pilots for 35,000 new planes”

    Pilots will clearly continue to have MANY other places where they can earn MANY TIMES the LIAT salary.
FACT: Pilots don’t need LIAT. But LIAT cannot exist without pilots.

I am not your average consultant – with 49 years inside and observing eastern Caribbean aviation I have told, I am telling, and I will continue to tell you the truth, no matter who is flinging the insults at me. So the fact of LIAT’s actual demise is now in YOUR hands, and if it dies you may rest assured that - in the history books - YOUR specific names will be on its grave marker forevermore.

Finally, whether you cynically see this as my promoting myself or not, I DO have the region’s best interests at heart and I am more than willing to assist - in an advisory capacity - in LIAT’s changes and survival.

James C. “Jim” Lynch

Aviation Consultant, Caribbean Specialist
Captain, Retired
416-602-7389 Mobile


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19 July, 2017

PROPOSAL

By James C. “Jim” Lynch

WHEREAS LIAT (1974) Limited is an airline with a de-facto politically supported regional monopoly which charges excessively high fares and yet still loses money, and…

WHEREAS LIAT (1974) Limited is an airline which serves shareholder and non-shareholder alike and serves as intra-regional transportation, and…

WHEREAS after more than forty years LIAT (1974) Limited continues to be a severe and onerous financial burden on taxpayers of the shareholder countries who are increasingly unable to support the airline financially, and…

WHEREAS the management of LIAT (1974) Limited is still now, and has almost always been known to be, incompetent and abysmal for at least four decades, and…

WHEREAS it is well known that the reason for LIAT’s impending demise is the apparent inability of the shareholder Prime Ministers to cease and desist from both interfering in its daily operations as well as appointing persons to the Board - and now to executive management - who carry zero aviation or airline qualifications or experience whatsoever with which to oversee or direct the present or the future of the airline, and…

WHEREAS there are in fact sufficient connected regional citizens available, qualified and knowledgeable in aviation and in airline management to be beneficial to LIAT’s Board, and…

WHEREAS there are non-Caribbean persons who have the truly global aviation and airline qualifications, knowledge, experience and regional airline experience to turn LIAT (1974) Limited around to a point where it can actually break even or make a profit…

THEREFORE, in order to reduce or cease the financial burdens on its shareholders, to avoid future industrial actions, to ultimately save the airline and to put it on a commercial footing,

I PROPOSE that ALL of the following measures be implemented, on an urgent and expedited basis:

1. That the Prime Minister shareholders of LIAT (1974) Limited shall immediately terminate the tenures of all current Board Members, including the Chairman, as well as all of their known appointees in the airline, and…

2. That the Prime Minister shareholders of LIAT (1974) Limited shall immediately cease making political appointees to the Board, and that they direct a neutral party (such as PriceWaterhouseCoopers?) to seek OTHER regional citizens to serve as Directors, each of whose resumes contain, at a bare minimum, some meaningful qualifications and experience in scheduled airlines, whether they be regional or international, and…

3. That the Prime Minister shareholders of LIAT (1974) Limited direct broad objectives for the new Board, and then (unless consulted) withdraw totally from any and all involvement in the airline, and…

4. That the Prime Minister shareholders of LIAT (1974) Limited shall immediately provide the current executive management of the airline with notice of termination, and…

5. That the Prime Minister shareholders of LIAT (1974) Limited shall immediately direct the new Board of Directors to seek qualified and experienced regional citizens for executive management positions who are actually qualified and experienced in the required skills as well as have experience in international or regional airlines (the existing executive management may be invited to re-apply for their positions, but they MUST actually possess and demonstrate valid qualification/s in the required skills), and…

6. That the Prime Minister shareholders of LIAT (1974) Limited shall immediately direct the new Board of Directors to seek a replacement Chief Executive Officer, if necessary a non-regional citizen, with the broad global qualifications, knowledge, experience and appropriate regional airline experience to innovate and turn LIAT (1974) Limited around to a point where it can break even or make a profit. A “nice-to-have” factor on their resume would be to also have at least some airline experience in the independent eastern Caribbean, and…

7. That the Prime Minister shareholders of LIAT (1974) Limited shall immediately seek a replacement Chief Financial Officer with the proper financial qualifications, previous international or regional airline experience, and DEMONSTRATED accounting knowledge to assist the Chief Executive Officer in turning LIAT (1974) Limited around, and…

8. That the Prime Minister shareholders of LIAT (1974) Limited shall immediately seek a replacement Chief Operating Officer with the proper airline operating qualifications and well as international or regional airline operational experience to assist the Chief Executive Officer in turning LIAT (1974) Limited around, and…

9. That the Prime Minister shareholders of LIAT (1974) Limited shall immediately require the new management of LIAT (1974) Limited to negotiate into every employee contract the provision that all grievances be given two weeks to be agreed upon between the employee and management, after which it shall be referred to a mutually agreed Arbitration Board, which shall itself be given no more than two weeks to deliver a decision which shall be accepted by both parties to settle the grievance, and…

10. That the Prime Minister shareholders of LIAT (1974) Limited shall immediately direct that every Annual account for the airline, whether audited or not, for the last forty (40) years be made available upon request by any member of the public or taxpayer from the shareholder countries and/or by the Press.


To:
• Prime Minister Freundel Stuart, Barbados
• Prime Minister Gaston Browne, Antigua & Barbuda
• Prime Minister Ralph Gonsalves, St. Vincent & the Grenadines
• Prime Minister Roosevelt Skerrit, Dominica
• Prime Minister Keith Mitchell, Grenada
• Prime Minister Timothy Harris, St. Kitts
• Prime Minister Allen Chastanet, St. Lucia
• Premier Donaldson Romeo, Montserrat

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bimjim
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Re: Letter to the EC Prime Ministers about LIAT

Unread post by bimjim » Fri Jul 21, 2017

Let it be clearly understood that as a regional aviation consultant and commentator I have no brief for nor employment by any other person, company or government, I receive no payments for my opinions or comments.

Let it also be clearly understood that NONE of these Prime Ministers nor their Prime Minister Offices (PMOs) ever voluntarily respond to me, and that in fact my own two Prime Ministers - in Barbados and Antigua, the two countries where I hold full citizenship - have the bold-faced arrogance of high political position to block my email address (I find other ways to deliver my messages) in an attempt that their own citizen - who they are sworn by law to serve - cannot communicate with them.

The fact is, with the shareholders inevitably going bankrupt I see LIAT slipping off the face of the earth on one hand, and on the other hand the Prime Ministers - who are the only ones who have the power to do anything about it - calling for yet another study and making it a repeated but brief talking point at CARICOM Summits without actually doing anything.

Today, July 21, LIAT has been without a CEO for a year and five months. Were this a private airline the ECCAA would have given ultimatums to the owners or actually come in and shut the airline down.

In case there is any doubt, _EVERY_ CAA is supposed to be an independent authority, at arms-length from politics and politicians. If for whatever reason the ECCAA is obeying the instruction of a politician or politicians to turn a blind eye to LIAT being required to follow the law, then its own ICAO/IASA Certication of Category One (for ALL of its member countries) is already in jeopardy.

And the FAA evaluators won't give a damn whether PM Gonsalves has a hissy fit or not.

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