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Leeward Islands Air Transport or LIAT was established in Oct-1956 on the island of Montserrat. The carrier provides high-frequency ‘island hopping’ services across the Caribbean. LIAT is based at VC Bird International Airport, Antigua, with an additional hub at Bridgetown Grantley Adams International Airport. The carrier provides scheduled and charter services, with average sector lengths of approximately 30 minutes. LIAT is majority-owned by 11 Caribbean governments, the largest shareholders being the Governments of Barbados, Antigua & Barbuda and St. Vincent & the Grenadines. The carrier underwent partial privatisation in 1995. Caribbean Star Airlines merged with the carrier in Oct-2007. LIAT operate a fleet of regional turboprop aircraft.
Location of LIAT main hub (Antigua VC Bird International Airport)
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For intra-Caribbean aviation the old adage “the more things change, the more things stay the same” rings true. Unfortunately, the regional airline LIAT is a perfect example of an airline whose financial and operational failures are the epitome of stagnation in a region where outdated government policies constantly squash innovation.
During the past year some of the shareholder governments of the perpetually troubled airline have attempted to initiate tough love for LIAT, including threatening to withhold funds until LIAT can improve its service and operations. In some ways those threats are a double-edged sword – given the challenges of doing business in the region, a business environment largely driven by years of governments propping up state-owned airlines instead of allowing free market forces to take effect.
Although LIAT's shareholder governments would like to see more competition, the reality is that the aviation business in the Caribbean remains in a state of inertia, and all of LIAT's pledges for improvement will likely not materialise until a true mindset change sweeps over the region.
InselAir is planning more rapid expansion as the Curacao-based airline group adds six aircraft over the next two months for a total of 17. The additional capacity will mainly be used to expand the group’s new Aruba base, where InselAir has five routes, but further expansion in Curacao is also planned.
The group’s network will soon reach 20 destinations following the recent and upcoming launch of services to Georgetown in Guyana, Barranquilla in Colombia and Punta Cana in the Dominican Republic. Several more destinations are being eyed for 2H2014 which would extend the network to Brazil, Cuba and Ecuador.
The expansion follows growth of over 20% in 2013, when the group focused on growing existing routes from Curacao in response to opportunities created as local competitors cut capacity and exited. Traffic will likely again grow at least another 20% in 2014.
REDjet’s failure to execute a low-cost model in the Caribbean reflects the long-standing realities of governments in the region refusing to fully liberalise to allow any meaningful competition in the market.
The Barbados-based carrier began 2012 with ambitious plans to add up to eight new destinations and end the year with 14 points in its network potentially spanning the Caribbean, northern South America and possibly central America.
See related article: Lack of liberalisation in the Caribbean poses major roadblock to REDjet expansion
But REDjet’s ambitions to establish a true Pan-Caribbean airline vanished less than a year after its launch as the carrier claimed subsidised carriers undercut its fares, which REDjet during the lead-up to its May-2011 debut claimed were 65% lower than what rivals were charging.