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[LIAT] Editorial: A flying dolly house

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[LIAT] Editorial: A flying dolly house

Unread post by bimjim » Mon Jun 12, 2017

http://antiguaobserver.com/a-flying-dolly-house/

[LIAT] Editorial: A flying dolly house
June 12, 2017

We are going to hold our noses, clasp our hands in prayer and venture into the very murky water that is LIAT. We do not predict a pleasant journey but to make it as comfortable as possible, we are going to try to stay above the stench of insults being hurled back and forth and instead, focus on LIAT as a business.

To achieve our goal, we must start with the most obvious question: what the heck is going on? We would have loved to start with “what does LIAT mean to the Caribbean?” or “can we survive without LIAT?”, but those questions have been trumped by the current state of affairs.

One of the last salvos in the war between the pilots and the airlines was a move by the airline to seek an injunction to force the pilots to fly. You know things are bad when you have to ask the court to force your workers to do their job. It is obvious that we have reached a stage in the relationship between LIAT management and the pilots (via the Leeward Islands Airline Pilots Association (LIALPA)) where they seemingly cannot even get into a room and discuss things in a civil manner to effect a resolution. They now need a judge to force one side to comply with the wishes of the other or lawyers to go into battle to force resolutions..

We do not want to take sides in any of this because we do not know all the details but in the real world, someone or ‘a few someones’, would have already been fired for letting this business get to this point. We are literally seeing LIAT crumble before our eyes and no one is held accountable. How is this possible? If this were a sports team, somebody would have long been shown the door for allowing things to fall into such disarray.

Not so with LIAT. And the only reason we can think of that explains this oddity, is politics. LIAT is run just like any other taxpayer funded entity that does not have a profit motive and people are not held accountable; no matter the state of affairs.

Here we have a business that has a virtual monopoly but cannot turn a profit. Heck, forget profit, LIAT cannot even break even. Year after year, taxpayers are asked to dip into their shallow pockets to fork over gobs of money to LIAT. In return, they are offered expensive tickets to travel within the Caribbean to increasingly fewer destinations with greater inconvenience. All the while suffering delays or cancellations, with notifications being delivered by increasingly unsympathetic airline representatives.

Meanwhile, the shareholder governments sit idly by and allow the catastrophe to continue as they foster a ‘business as usual’ culture. Upon reflection, the first heads that should roll are the politicians. Clearly, they have no idea as to how LIAT should function. At this point, we would venture to say that they do not even seem to know what they want of the airline.

There is more than enough blame to go around when it comes to LIAT but unless and until there is a plan and people are held accountable to execute that plan, we will continue to play ‘dolly house’ with this very important Caribbean asset. Just to give you an idea of what we are talking about. On October 7, 2016 we ran a story that was headlined “LIAT to hire CEO in three months”. Eight months later and Julie Reifer-Jones is still the Acting CEO while LIAT continues its search for its third CEO in five years – it was four years when we published the story.

Who is responsible for securing a new CEO? Back when the story was written, Reifer-Jones said, “The position was advertised and we’re using an external agency to assist in that recruitment … I would assume that, hopefully, an appointment should be made in the next three months at least.” After viewing former FBI Director James Comey’s testimony, we know what the word “hope” means but at this point, we would be splitting hairs to go down that road. We also know that good people are hard to find but 14 months to find a replacement CEO is a bit much – Evans resigned in April 2016!

LIAT is obviously a rudderless ship. Harsh words? Yes, but better than the “fatal descent” description from the LIALPA president, Carl Burke – at least we still have the ship afloat. How long will it remain afloat before it hits some rocks? We do not know. What we do know is that the inevitable end to the “fatal descent” may be coming soon if someone does not grab the yoke and forcefully pull the company out of this dive.

Right now, anyone who is carrying on like it is business as usual should be sent packing. There is no room for nostalgia or politics. LIAT is too close to the brink to allow the insanity to continue any longer. The taxpayers of the region are fed up with having to throw more good money towards a bad cause and they deserve better.

Ernest Hemingway wisely cautioned that we should “never confuse movement with action”. In the case of LIAT, there is a lot of action with little movement. It is more akin to ‘spinning top in mud’ and we all know how productive that is.

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Re: [LIAT] Editorial: A flying dolly house

Unread post by bimjim » Mon Jun 12, 2017

Let us not forget that these losses have been going on, with rare exceptions, for over 40 years. Which means that the various incompetent political appointees have been running LIAT at their pleasure - unaccountably - for over 40 years.

Let us ALSO not forget that not a single annual account - audited or not - has been made available to the overloaded taxpayers who bear the financial burden in the same 40 years.

As one of those poor taxpayers my first question is, "What are they hiding?".

My second question is, "Why - generation after generation of politicians, their appointees and management - this is not only allowed to continue but is apparently deliberate?"

All of the faces change, but the same stupidity (or institutionalised stealing?) carries on.

At taxpayer expense, of course - better known by the politicians as that stratospheric tower of money immediately next to the LIAT bottomless financial pit. Well, they don't have to carry it very far, and it makes it easier to get rid of the whole tower every year.

Unless hundreds of $millions are being stolen, in which case it is far past time to cement over the hole and have an audit of LIAT's books to see who has profited from the "LIAT free bank" and put them in jail where they rightly belong.

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Re: [LIAT] Editorial: A flying dolly house

Unread post by islandflyer » Sat Jun 17, 2017

It begs the question - what now?

Do we deliberately shut down LIAT, which stops the massive bleeding but also terminates hundreds of loyal, dedicated workers, and delivers a critical blow to many of the small island economies who rely on the airlift that LIAT provides (inefficiencies accepted)?

Or do we have a 'hostile takeover', where private industry either wrests control from government, or control is voluntarily surrendered to private industry, to do what could not be done over 40 years of "expert" management - turn LIAT into the premier inter-island transportation system that it was destined to be?

Or is there something else?

I personally don't think there could be a happy medium. Politicians have gotten too complacent and comfortable with the status quo at LIAT, and to mess with that would threaten to expose a lot of what they prefer to have hidden. But it is also painfully clear that to do a Fruendel (i.e., to do nothing) is fast becoming an unpopular option. One the other side, what private entity or investor would opt to involve themselves in the morass of the Kremlin (is that still what they call LIAT HQ?) with at least 4 governments braying their own versions of the truth and pulling in different directions? Any serious executive - or even the half-baked jackasses that roam freely in this part of the world - can see this horse is virtually dead, yet the johnnies (sorry, that should be 'jockeys') keep beating it to the undefined finish line.

My totally unsolicited and uninformed opinion is this:
- establish a new entity made up jointly of private and government inputs, including foreign investment by way of operating capital.
- set up a Board of no more than 10 persons; 8 from private industry, 2 representing the regional governments. Of the eight, no less that 6 must be well experienced in airline operations at the most senior levels, and as multi-disciplinary as possible. The rest of the bunch can dabble in tourism or other areas where airline operations has a significant impact.
- seek an international airline partner to provide unbiased external guidance.
- transfer the most valuable assets from LIAT to the new entity (aircraft, working equipment and critical core staff like engineers and flight crews).
- shrink the LIAT network by at least 30%, and staff by at least 50%. Dispense with any feelings of nostalgia with respect to location of HQ or Operations bases or Maintenance centres - however take into account any potential benefits from using existing facilities and structures.
- establish some key business deliverables: the entity must be at break even in the third year, and record profits from that point forward; and management performance targets. Also define the system of penalties for not reaching those targets.
- Hire your key Management personnel with significant and relevant experience in operating a small dynamic regional airline; if talent must be sourced from outside of the region, so be it.
- When feasible, review the aircraft fleet mix used with a view of improving operational efficiency (dispatch reliability, adequate seats available, etc.) and growth potentials.

and finally,
- get out of the way.

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Re: [LIAT] Editorial: A flying dolly house

Unread post by bimjim » Sat Jun 17, 2017

In the last month I have been making my annual (waste of time) effort to put the word CHANGE before the shareholder Prime Ministers. Once again I sent them I sent them a detailed proposal with the state of the airline and a list of suggested actions which kinda mirror yours but staying in taxpayers hands.

If LIAT lost even only $50 million a year for the last 40 years (and many years it has lost double or triple that much), the amount that taxpayers have come up with is staggering - roughly two BILLION US dollars. Or four BILLION Barbados dollars. Or five and a half BILLION EC dollars. Now ADD the US$100 million they spent on the new ATRs.

If the shareholders put it in private hands what does the taxpayer get back? Nada. Zilch. In fact, no private buyer is going to even look at the airline unless the taxpayers keep ALL of the debt, so if anyone believes selling LIAT is going to make the debt go away, better think again.

I did a telephone interview with an Antigua newspaper this week during which they asked me if I thought LIAT should be privatised. They seemed a little shocked that I said no, but I went on to say that LIAT's problem is not that it is a money-losing proposal, but that a number of factors - all political - were preventing LIAT from realising ANY of its vast potential.

What we do know is that as shareholder Chairman, The Comrade regularly interferes with LIAT. The Comrade represents about 11% of the ownership, so instead of looking at it that SVG only gets 11% of the profits, I think we should look at that situation as SVG only has to pay 11% of the losses. So if Ralphie and his Comrades can make LIAT lose US$100 million, then Barbados has to find US$51 million, Antigua has to find US$34 million - and SVG only needs to find US$11 million. To put it one way, it's a steal of a deal for Fat Ralph.

So much for the HoGs having their "friendly" cooperative and planning summits in CARICOM. I have been saying for some years now that these things produce nothing but laughter, and they don't keep any agreements they sign anyway. HoG Summits are another scam on the taxpayers, yet another excuse for these "leaders" to enjoy 5-star food and lodging at our expense.

What we do know is that the Board Chairman has experience (I am not at all even sure about the qualifications) in tourism, zero in aviation. He has been there so long he resigned 9 years ago and the shareholders are yet to find a replacement who is just as incompetent.

Now that 1970s DC-3-copilot Colin Mayers is no longer there, NONE of the rest of the Board have a whisper of a fraction of a breath of a clue about aviation or airlines. Ask any one of them where you could get a bucket of slipstream and he would be at great pains to find out.

Management? Don't make me laugh. LIAT is being steered by a hotel book-keeper who got there because she is a friend of the Board Chairman, no other reason. She has zero qualifications in managing an airline, and her total sum experience to take the airline forward is that she has observed how LIAT operates.

Using THAT knowledge, just how far should we expect LIAT to travel into the future? I suggest half an inch forward for every 100 miles down.

The rest of executive management are almost as bad. Most of them rose through the ranks and LIAT is all they know. Innovation or doing things the weay some aother airlines does them is 100% out of the question - how would they know? The burning phrase I heard when I was there is "We have always done it this way, and we will always do it this way." Given that approach to management, I give you three guesses as to how LIAT will be managed by this bunch in the future. Go on, take ten guesses, I'm feeling generous.

About 1990 LIALPA had been negotiating with LIALPA for TEN years to renew a ONE-year contract and getting nowhere when the Association took a sick-out. It was later estimated that this cost the airline about US$10 million in lost revenue and untold lost customer loyalty. Now add in the lost US$2 million in salaries of senior management and pilots sitting across the table from each other for those ten years wasting time getting nowhere.

BUT LIAT MANAGEMENT DID IT AGAIN - TWICE. Even if the costs were the same each time, we are looking at approaching US$50 million for no good reason other than the politically appoimted Board and management always was - and still is - incompetent.

The faces change, but the BS remains the same. It is simply the way LIAT does things, they don't know any better.

Another example of this current management is the recent industrial action due to the ATR72 squabble. Management came to an agreement with LIALPA, then refused to carry it through. Instead of sitting down and sorting it out with LIALPA - you know, as they are EMPLOYED and PAID to do - instead they bypassed normal, civil discourse and sent it direct to the Antigua Industrial Court - well known for dragging even the simplest of grievances out for between five and twenty years.

See, "We have always done it this way, and we will always do it this way." Right. Well, it's the laziest way, isn't it?

Nobody learns anything, nobody changes anything. CHANGE is not a word they like to hear inside LIAT management. Why? Because they themselves do not know any better. They do not know anything else. And while the politicians and Board keep sending in political appointees who have no qualifications or experience in aviation, that knowledgebase actually keeps getting less and less.

I live in hope, but I know I am wasting my time. But you never miss the water until the well runs dry.

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