LIAT’S 2012 Strategy Plan Now BADLY Damaged in 2013

Submitted by Robert MacLellan
Ian Brunton, CEO LIAT

Ian Brunton, CEO of LIAT

On 28 August LIAT’s CEO, Ian Brunton, talked to Caribbean media and finally acknowledged in public some of the real facts behind the airline’s chaotic operations over the last three months. He also described LIAT’s worrying current financial position, in the same month that the airline has taken on a US$65 million loan from the Caribbean Development Bank to fund new aircraft.

However, it was reported that Mr Brunton has refused to have an investigation to hold people accountable for the recent chaos at LIAT. Instead, he said he will organise a “post mortem” (an unfortunate phrase) on what went wrong and use this to reward staff who have performed well during the crisis. Those who “dropped the ball” would be identified for “counseling or better training”.

This statement represents an unbelievable level of arrogance on the part of LIAT senior management and conveys gross disrespect for its customers! Ignore the widespread calls across the Eastern Caribbean for senior management resignations or dismissals at the airline. Instead, LIAT institutes some counseling and better training – presumably, for middle level and operative staff only? No personal responsibility accepted or culpability acknowledged on the part of LIAT’s Chairman, the CEO or the Director of Commercial and Customer Experience – all of whom have presided over three months of disastrous operations across the Eastern Caribbean and an equally disastrous public relations / communications exercise.

Ignore the huge inconvenience and, in some cases, trauma caused to a high percentage of LIAT’s customers consistently over three months. Ignore the great damage done by LIAT’s management to the general economy of the Eastern Caribbean and to prospects for future inward investment. Ignore the negative impact on the region’s reputation as an international tourism destination. Ignore the damage done to LIAT’s management / staff relations. Ignore the potentially fatal damage to LIAT’s own future viability.

Most people agree that the Eastern Caribbean desperately needs LIAT but, going forward, LIAT desperately needs directors and senior management who will take responsibility and who can drive a “low cost airline” strategy that will truly serve the region and not stagger from one financial crisis to another. Success at LIAT is not just about new larger aircraft, future success is about running a marketing led business, with higher passenger volumes and an efficient cost structure.

The latest LIAT management focus appears to be on better future complaints handling, rather than on more useful market research as to what LIAT’s current customers, and potential customers, need and how much they are prepared to pay. With that data, LIAT can strategise how to deliver the right service at the right price to their larger market that existed several years ago. This may involve the airline reverting to code sharing some routes with other Caribbean carriers because the LIAT route network, as currently operated, is not viable without a substantial increase in overall traffic. Across much of the world, airline passenger numbers are rising strongly but at LIAT they have dropped.

In the 2013/14 financial year, LIAT is increasing its already substantial debt by at least US$65 million dollars and yet Mr Brunton reported a 10% (US$30 million) decline in 2012/13 revenue against 2011/12 results. He further stated that company expenses, related to stranded passengers during LIAT’s recent busiest summer months, will have wiped out profits for that period this year. Clearly, this will have a harsh negative impact on LIAT’s 2013/14 results and will likely necessitate a significant early re-write of last year’s strategy plan and the related medium term financial projections for the airline.

The point is LIAT’S PROBLEMS ARE NOT OVER YET. A continuation of the current LIAT management style will not increase revenue, will not attract new equity investors and is not going to achieve the positive financial results necessary to cover the airline’s future higher levels of debt service, associated with funding the new aircraft. That vicious circle in LIAT’s historical business model needs to be broken now and, as recent events so clearly prove, this can only be achieved with fresh new expertise at board director and senior management level.

Notes.

Robert MacLellan is Managing Director of MacLellan & Associates, the region’s leading hospitality consultancy since 1997. He is a Fellow of the Institute of Hospitality, a Member of the International Society of Hospitality Consultants and has a Masters Degree in International Hotel Management.
For further information contact Robert:

(1) 758 285 4964 or robert@machospitalityconsultants.com
www.machospitalityconsultants.com
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90 Comments on “LIAT’S 2012 Strategy Plan Now BADLY Damaged in 2013”

  1. Common sense is not common September 17, 2013 at 3:18 PM #

    Agree Miller.I am hearing some are not happy with that choice.As major shareholder the government need to tell us more about how our money is being spent on this fiasco called Liat.

    Prodigal I feel embarass for you sometimes.You must be a very unhappy person.You seem to eat,and drink DLP.

    Like

  2. Prodigal Son September 17, 2013 at 3:31 PM #

    I expected you to respond just as like you did. Don’t feel sorry for me, feel sorry for yourself. My life is complete, it is awesome. I am so blessed!

    I forgot that no one can touch your wicked incompetent party.

    Like

  3. Gabriel September 17, 2013 at 3:39 PM #

    I have been giving my two cents worth on the long serving,tired,waste of time executive management of LIAT and the political inteference especially at the Antigua headquarters.As far as I recall and I saw the names of the Barbados Board representatives,Jean Holder was not a Barbados rep.There was a PS Mz Gabrielle Springer-Taylor and a banana farmer Trevor Mayers from the constituency of the dead king of St John.I cannot recall the third member .
    Barbados should not have put over a $100 million in LIAT.Never,never!!They will not get any ROI unless and until there is a political and economic union of these small Caribbean States and everyman pay according to his demand for services of the carrier.The Leeward and Windward Islands including Barbados is a grouping of mini nations divided by a common language and separated by an airline called LIAT.Battles are lost by armies which turn up late.Money is lost by LIAT run by an army of occupation which ensures the carrier turns up late.Our taxes are hard at work in LIAT.

    Like

  4. BAFBFP September 17, 2013 at 3:53 PM #

    How many ac’s there got in here … I pick up three already, and the one in Arizona ain’ even get back yet …

    Like

  5. Common sense is not common September 17, 2013 at 3:55 PM #

    Prodigal

    Did you see my DLP party card while you were busy working in the opposition office?

    It is fine to be supportive of a party of choice but you seem obsessed with anyone who does not fall for your BLP propoganda.

    My family and I are busy ensuring that we hold our own in these wicked economic times.Party cards are not for the likes for people like us unlike others who seem to breathe and have their being in party membership.If the cap fits ……..

    Like

  6. BAFBFP September 17, 2013 at 4:08 PM #

    Free market theory DOES NOT WORK in miniscule markets like the Caribbean. The most classic example of this is the result of the CSME experiment in Barbados:- Big fish swallowing up all of the other fish and domination by one or two power brokers that are quick to make bottom line decisions that literally f#ck countries up …!

    Like

  7. Prodigal Son September 17, 2013 at 4:16 PM #

    As a responsible person, you should not believe what CCC comes on to BU and says when he announced and you believe that I am a person who works in the Opposition office. I would be delighted if that person would come on BU to dispel the myth.

    As for you saying that I am intolerant of anyone who does not believe in the BLP, I can say the same of you, you are intolerant of anyone who does not believe in the DLP or who deigns to criticise this incompetent government. If you are honest, you would admit that the DLP is incompetent and lied to the people to win an election.

    Do you expect people to be happy with this? For your information, I am not a card carrying member of the BLP, I just support the party. So can I ask you to stop labelling me?

    Like

  8. David September 17, 2013 at 4:27 PM #

    Here we go again. Gabriel both political parties have been subsidizing LIAT. This is not a political issue per se. What are the options? We know that the market cannot reasonable support a pure free market scenario.

    Like

  9. Common sense is not common September 17, 2013 at 5:05 PM #

    Prodigal

    I am not going to be in any tit for tat with you,but you could cut the crap pretending that you are not Mia’s assistant Pat and that you are not a former candidate for St Joseph.

    I told you already that I admired a lot about you but I am getting turned off by your style of nastiness and rumour mongering.

    Support your party same as CCC and AC support theirs but please don’t allow others to make you into a petty,bitter individual.

    Remember politics has a very limited shelf life so make friends with all, cuss the Dees when you feel like, but be fair and reasonable and give them praise when they deserve.

    Or can you not find the strength to do that?

    See I can agree with Miller and with CC,I can agree with Gabriel and with AC,it is all about issues and not personalities Prodigal.

    Enough of that for now,have a good evening.

    Like

  10. millertheanunnaki September 17, 2013 at 5:15 PM #

    @ Prodigal Son | September 17, 2013 at 4:16 PM |

    Same thing here, Prodigal. The miller has been fingered for all sorts of people from Peter Miller to Peter Simmons to Kerrie Symmonds to OSA woman to Jerome X.Walcott to even Mia woman.

    The problem with them is that the intellectual tag team Prodigal & Miller is a thorn in their dangerous deceitful destructive lying incompetent backsides. We shall always blind them with the light of Truth.

    Like

  11. Prodigal Son September 17, 2013 at 5:24 PM #

    Amen, miller. You have my back and I have yours! It is a free Barbados and people are free to believe what they want!

    Like

  12. BAFBFP September 17, 2013 at 5:28 PM #

    Just don’ you be talkin’ Free market mumbo jumbo for essential services …!

    Like

  13. David September 17, 2013 at 5:39 PM #

    @Commonsense is not common

    How can you expect others to take you seriously if you yourself betray one of the tenets upon which we debate. BU is an anonymous blog for those who want to be.

    Like

  14. Common sense is not common September 17, 2013 at 7:28 PM #

    David/BU

    Your point is well taken.

    Like

  15. bimjim December 20, 2013 at 7:20 PM #

    I saw a comment above and had to respond to it. The comment was that an expenditure of such a size as the lease of the ATRs could not have been approved without the final decision of the Board.

    I agree with that, but I do not agree with the inherent assumption that the Board knew what it was doing in that approval process.

    Brunton was a pilot for BWIA and became a lawyer (don’t ask me how, when or why). It is my theory that by arrangement Brunton was “fired” from CAL and put out as bait for LIAT. The shareholders swallowed it, and he arrived at LIAT as a Trojan Horse with a mandate from T&T to do as much damage as he could so that Trinidad could buy it for a song and do us all the ultimate favour to “take the burden off our shoulders”.

    This theory is supported by the fact that the CEO position at CAL he was “fired” from on Nov 27, 2010 is still unfilled, and was only just advertised – almost three years to the day after he was “terminated” – my goodness, coincidentally just after he resigned and ran away from LIAT. and is now “available” again.

    (Take note: If Brunton returns to the CAL CEO position, I will claim that as living proof of the LIAT Trojan Horse Project.)

    So Brunton has the intelligence, knowledge and experience to know that you can make statistics prove anything, and that you can easily bramble a Board of ignorant self-made country people with almost any presentation if they had no clue what you were talking about in the first place.

    In other words, to the Board Brunton IS the expert…and they would, should and could have just taken his word for it. Certainly the “aviation expert” Chairman would not have known the difference.

    If there was a Board composed of intelligent aviation people who knew the difference between an aileron and a rudder, I would accept that here was an intelligent decision made after they had done their own research and were all genuinely satisfied it made sense.

    But the LIAT Board – the majority for Barbados, anyway – are all political appointees, self-made loyal Party men who may know their own business but diddly squat about aviation – except perhaps Trevor Mayers, who was involved in an ancient DC3 money-losing cargo operation Carib West which eventually went bankrupt back in the 1960s – and is totally irrelevant as far as LIAT is concerned.

    Did I mention another coincidence – that the same aircraft Brunton got LIAT to order are the ones CAL is operating now and replacing their Dash-8s with? My point is that if CAL were to take over LIAT, there would be a common fleet. How convenient.

    I have been around Caribbean aviation since about 1970, and I swear this is the first time I have even had the slightest feeling that LIAT is about to fail. My prediction – from the inter-island inside information that I know – is that LIAT will be irrelevant in about 5 years, maximum 10.

    I wish it were otherwise, but my sense of the future is seldom wrong.

    Finally, now that Brunton has scurried back to Trinidad to re-apply for the CAL CEO position, I wonder how long it will take for T&T or CAL to propose a merger, take-over or purchase of LIAT?

    Hmmmm…

    Like

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