Sir Richard Branson wants to invest in and expand LIAT, a troubled Caribbean airline. Is Virgin Caribbean around the corner?
Leeward Islands Air Transport, or LIAT for short, may be seen as more of a public utility than a profit-generating airlines. The airline is jointy-owned by seven Caribbean governments, though the four below own about 95%:
- Antigua & Barbuda
- St. Vincent and the Grenadines
The airline is headquartered at V. C. Bird International Airport in Antigua and has a fleet of 10 ATR aircraft, providing essential air service in the region.
But the airline loses money. Consistently. And even as LIAT has become far more operationally reliable in recent years, its reputation among locals and visitors is not great.
Branson, who lives on Necker Island in the British Virgin Isles, has offered an initial $7 million investment in LIAT. Lionel Hurst, a senior Antigua and Barbuda government official, told the Caribbean Broadcasting Corporation:
He has proposed investing USD7 million, he would wet-lease several aircraft, jets, and they would very likely fly from Fort Lauderdale International to maybe Jamaica, Haiti, down into Antigua, Barbados, maybe even as far south as Trinidad and Guyana. The whole idea is to enlarge LIAT rather than collapse LIAT or making it a smaller entity.
So right away, an expansion. Hurst explained that absent an expansion, LIAT would never be profitable:
There just isn’t sufficient number of passengers and other kinds of possibilities to make LIAT profitable within the Caribbean and many of the countries that now utilize LIAT services are showing some reticence in providing LIAT with the resources it needs from time to time. So we have to look at another to make LIAT work and Branson stepping in would be such a way.
Branson does not strike me a passive investor and I can see him wanting to leave a mark in his own backyard. My prediction: more expansion for LIAT.
I’m not expecting LIAT to acquire wide body jets and start flying to Europe (Virgin Atlantic already has that covered), but making the carrier a more robust regional option with expanded U.S. presence would be an interesting move. American Airlines’ defunct San Juan, Puerto Rico hub has still left a gap in the region and I do not underestimate what Branson might have in mind.