BRIDGETOWN, Barbados (CMC):

LIAT, the inter-regional airline, will soon be freed of some of its financial obligations at a time the cash-strapped airline is making plans to unveil an overhauled route schedule in September, Barbados' Minister of Tourism Noel Lynch has announced.

Lynch said the Leeward Islands Air Transport's (LIAT) major shareholders, Barbados and Antigua and Barbuda, have agreed to guarantee payment to leasing company Bombadier Services Corporation, freeing LIAT of an annual US$1.2 million fee which is paid into a holding account pending the return of two leased Dash 8 aircraft in good condition.

"This fee is itself a burden on a carrier which is already struggling," Lynch told the Barbados Parliament yesterday, noting that the agreement with Bombadier would also release US$7 million which LIAT had already paid into the account.

TURNING AROUND OPERATIONS

Lynch said the airline was making good progress in turning around its operations and had seen an increase in passenger loads over the last quarter, even though the average fare take was down by US$10 per trip on account of excess capacity and strong competition, principally from Caribbean Star and Caribbean Sun.

He said the progress was being made despite some unscheduled expenses such as the overhaul of two engines at a cost of US$600,000 each and the acquisition of two air conditioner units with a price tag of US$250,000.

SEPTEMBER PLANS

Lynch, seeking parliamentary approval for the guarantee to Bombadier, said the airline would be introducing a market-driven major overhaul of its routes and implementing a plan to improve reliability by the end of September.

"The new operating schedule proposed is going to substantially reduce LIAT's operating cost, really raise the capacity and improve substantially the punctuality of LIAT. This thing about 'leave island any time' and other meanings that were attached to the LIAT acronym will be things of the past.

"The changes will move the business operation from an operational base to a marketing-led base for the first time and it is very important to LIAT," he added.

He justified the continued economic support to LIAT, saying the carrier played a major role in the country's tourist industry and was pivotal to the success of the movement of people under the CARICOM Single Market and Economy.

The new operating schedule proposed is going to substantially reduce LIAT's operating cost.