BRIDGETOWN, Barbados (CMC) — Regional airline LIAT is forecasting a loss of EC $9.2 million (US$3.4 million) this year, despite recording a net profit of EC$5 million at the end of August.

Chairman of the shareholder Governments, Prime Minister Ralph Gonsalves of St Vincent and the Grenadines gave the assessment of the company’s financial performance at a news conference following a meeting of shareholder Governments here on Wednesday.

“This is moving from numbers close to EC$100 million, to EC$57 million and even last year EC$57 million roughly have of it had to do with losses incurrence, selling Dash-8s and paying severance pay,” Gonsalves told reporters.

He outlined a number of limitations and challenges which impact the airline’s service to the travelling public, including a smaller fleet – LIAT currently operates nine ATRs and is expected to acquire a tenth in November – as well as weak technology, and the need for training of frontline staff.

He added that the board is currently undertaking a review of the organisational structure to determine the optimal number of employees needed to serve the entire network.

“When I became Prime Minister, LIAT had about 1200 people employed, that’s 2001. Now LIAT has 669 persons employed and the head count in the budget is 630,” Gonsalves said.

He added that the company is also looking to cut unprofitable, non-performing routes in a bid to improve its service.

“A critical review of the schedule has to be fine-tuned, clearly LIAT needs to do fewer routes, but do what we’re doing much better. This would mean eliminating some routes and cooperating with third party carriers on those routes. LIAT has to continue removing non-performing routes as appropriate based on commercial assessment,” Gonsalves said.

The airline’s management has also requested the approval EC $5 million to be divided between the shareholder Governments of Barbados, Antigua and Barbuda and St Vincent and the Grenadines.

According to Gonsalves, Dominica – the fourth shareholder Government has been exempted from meeting its quota as that country is still rebuilding from the widespread devastation caused by Tropical Storm Erika last year.

Gonsalves added that there is a long-term capitalisation issue still to be addressed with the Barbados-based Caribbean Development Bank (CDB), and also to have more participation “from other territories which benefit from the LIAT network”.

The prime minister is planning to convene a meeting between the current leaders of shareholder governments and their counterparts from Grenada, St Kitts and Nevis, and St Lucia, to discuss the possibility of them entering as equity partners.

On the issue of taxes, LIAT is to submit a request to the CDB in support of a study of the impact of proposed reduction in taxes.