Editor’s Note: This article was written prior to the recent announcement that David Evans had been hired as LIAT’s new CEO. Will the change at the top make a difference? The rot goes deep, as this article by Tomas Chlumecky shows…
As LIAT continues to drain tax payers money, is it not time for the tax payers to ask for action and accountability from their politicians?
As an Airline Consultant, I thought I have seen it all, but LIAT is a very special case indeed. Experience shows that companies in decline MUST replace some of the people responsible for the decline, these people lead the company to its current position and are incapable of the mind set needed to make fundamental changes to the strategy they so blindly believed in that created the crisis in the first place. They may not see it, but they block any real changes because they are bent on defending the dying cause, therefore they need to go!
When will the Board realize that the Chairman of LIAT, Dr. Jean Holder and once again Acting-CEO and CFO Mrs. Julie Reifer-Jones are failed leaders that have led LIAT to where it is today? Any reasonable Board by now would have requested their resignation.
Recently LIAT blames the “summer meltdown” on its inability to sell its DHC-8 aircraft because they do not have the records for the aircraft up to date! One year after ordering the ATR’s and knowing full well they needed to sell them with records up to date, just the fact the records are not up to date is NOT acceptable. If they flew with records not up to date the then ECCCA needs to step in investigate. Just horrible management.
Next, the people of the EC are being told the new ATR’s are more economical and that is why LIAT went out to buy and lease 12 ATR’s. This is non-sense. The 8 ATR-72’s will cost about $US1.4 million lease payments per month! The 4 ATR-42’s being purchased cost $US 74 million at list price, so what LIAT did was substantially increase it lease obligations and debt at a time it has little money, pays salaries late and cannot even keep its maintenance records up to date.
These financing costs will add significant costs to operating costs to its fleet, well beyond the DHC-8 fleet, CASM (cost per available seat miles will go up) way up. The argument that the ATR’s are more efficient is wrong. I have compared block fuel burns per trip for each aircraft and found that LIAT is NOT telling the truth to the taxpayers of the EC :
- ATR-42-600 (48 passenger seats) burns 1,246 lbs (pounds) of fuel on a 200nm (nautical mile) trip and 1,727 lbs on a 300nm trip.
- ATR-72-600 (68 passenger seats) burns 1,363 lbs on a 200nm trip and 1,894 lbs on 300nm trip.
- Yet the “old” DHC-8-300 (50 passenger seats) burns 1,214 lbs on a 200nm trip and 1,678 lbs on a 300nm trip.
- The speeds of the 3 aircraft are very close DHC-8-300 max speed is 327 miler per hour (mph), while the ATR-72-600 is 316 mph and the ATR-42-600 is 345 mph, no major difference.
- The DHC-8-300 is on a per trip basis more fuel efficient because it uses the lower powered engines (PW125) while the ATR’s use the PW127 engines with more more power and thus more fuel burn.
Someone needs to STOP the lies coming from LIAT’s Management. The airline went out and got 12 brand new aircraft worth $US 256 million when it did not need to. When you don’t have the money, you make do with what you have. Airlines are no different. They say the DHC-8-300 aircraft were too old. In fact they are only 20 years old which is fine for aircraft. Air Canada uses 64 of the same aircraft as LIAT and their average age is 25 years old. They will not be replaced anytime soon, so why the lies about fuel efficiency and old aircraft? Who gained from the ATR deal? It sure was not LIAT or the taxpayers!
With the the added cost of lease payments, financing charges, training costs, new spares inventory the savings on maintenance costs, the new ATR’s will not come close to offsetting the added costs. Therefore the ATR will cost MORE than the DHC-8-300! So LIAT’s CASM (cost per available seat mile) will increase, thereby increasing breakeven passenger loads and making a bad situation even worst.
Too many people are talking about things they do not understand – and the LIAT babble is mostly just propaganda for those at the top who themselves have NO idea what they are doing.
Why was it so important to change the fleet under Capt. Ian Brunton when there were so many other areas LIAT needed to change first; like customer service, reliability, maintenance, revenue management, cost control, employee reductions, addressing the 39 “social” routes. Something is not right about any of this. It smells of absolute mismanagement and may at some point require investigation for possible wrong doing.
Lastly, 850 employees for 12 aircraft, is ridiculous! 71 people per aircraft? Today Westjet Airlines in Canada has 8,000 employees for 113 aircraft (105 B737’s and 8 DHC-8-Q400), that is 71 employees per aircraft as well! That is too many people on the payroll for the business LIAT does. There is no need to have more than 50 employees per ATR, therefore 600 employees is sufficient. 250 LIAT employees need to go if this airline is ever to be self sufficient.
The current leadership is killing LIAT; making so many mistakes, yet covering up the truth and hoping they can deceive those who know little of aviation. I only want to see a vibrant LIAT with a future, and I am sure this is what the taxpayers want as well. It’s time for the politicians to do what they are paid to do, which is to serve the interest of the people.