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BASSETERRE, St Kitts (CUOPM) -- LIAT’s newly-appointed chief executive officer, Captain Ian Brunton, has described 35 percent of the airline’s 112 daily flights as “social (uneconomic) routes”.

“LIAT cannot continue to meet the cost of these social routes,” Brunton told the state of the industry conference of the Caribbean Tourism Organisation in St Kitts last week.

The airline operates the intra-regional routes in the Caribbean going as far north as Puerto Rico and the Dominican Republic and Guyana and Trinidad and Tobago in the south, also flying into the US and British Virgin Islands and the French Caribbean, Guadeloupe and Martinique.

Ian Bertrand, former CEO of BWIA from 1979-1993, in his presentation at the conference, expressed shock that such a large percentage of flights are subsidised.

“This is madness. I don’t know of any business which can survive in such circumstances,” Bertrand said.

What is more, the airline is owned by only three of the 11 CARICOM governments -- Barbados, St. Vincent and the Grenadines and Antigua and Barbuda -- and seven non-CARICOM territories benefit from the service LIAT provides. Those non-CARICOM territories are: United States Virgin Islands, the Dominican Republic, Puerto Rico, Curacao, Aruba, Guadeloupe and Martinique.

Without saying which markets are uneconomical, Brunton says the routes are in and out of eight countries.

“We intend to approach those markets to provide support on the uneconomic routes,” says the former CEO of Caribbean Airlines.

“If the support is not given, we shall have to wean out the flights,” Brunton told ministers and directors of tourism from the Caribbean at the CTO discussion on the Challenge of Regional Transportation: Where are the Solutions?

Bearing the costs of uneconomic social routes is not the only problem faced by LIAT. High operating costs, fees and taxes on the industry, stifling regulations and security challenges, competition and a steady fall-off (20 percent) in intra-regional travel over the last five years as a result of the international recession that goes back to 2008, are significant elements of LIAT’s problems.

So, too, are thin and fragmented markets, limited economies of scale, high employee costs, coupled with aggressive trade union activity.

In addition, Brunton says “finding the capital to replace an aging fleet, even if the 30-year old planes are still working well,” is also a major challenge.

The LIAT CEO wants “to expel the myth that LIAT is gouging customers”.

The cost of a ticket, he says, is made high by factors outside of the control of the airline. Airport fees and other forms of taxation (66 in all) account for between 30 and 50 percent of the fare, says the airline’s CEO.

The LIAT base fare, insists Brunton, is competitive with other international airlines on the basis of miles travelled to a destination.

He admits, though, to delays and at times less-than-required efficiency in customer service.

The CEO says 34 percent of the delays in September 2012 were caused by industrial action on the part of the representative unions and 39 percent due to technical problems.

Brunton, who came into the job in August 2012, projects a turnaround of the airline’s fortunes in 12 months. The basis for the turnaround is hinged on a number of factors.

One is for “Caribbean governments to find innovative ways to increase the volume of passengers rather than imposing high fees and charges,” says Brunton.

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Ron Massaro:

My wife and I were going to fly up to St Martin from Antigua on our Holiday in January. The roundtrip airfare was $436.00US for both of us but the fees and taxes added another $300.00US . The total of $736.00US for a 20 minute flight. How is that reasonable! No wonder why passengers have fallen off.

Sean Anthony:

Captain Brunton, no disrespect meant but aren't you a "for profit" organization? If you are, no one is "benefiting freely" because you are generating revenue. Now if your cost structure is such that you cannot make a profit on a full flight then maybe you should look internally. Attacking your customer base and threatening to pull out of markets will only alienate you even further from the ones with the revenue to bring you back to profitability. I do understand your need to stop flying unprofitable routes but to say non-caricom countries are benefiting from LIAT flights is like saying "a doctor benefited from the medicine he prescribed me." Indirectly he does benefit because I went to see him (revenue) but I benefit most by getting better (your needed passengers). Yeah, yeah I know bad analogy but you get my drift, eh?!?! May I please ask what is your complete plan to bring LIAT into the black?

Tyrone Hodge:

I understand that LIAT's primary purpose is to make money and for the life of me I can't understand why for example during the summer months when all of the caribbean islands are having their festivals, they don't add extra flights. don't you think that would add much needed revenue? I'll give you an example. I was in Anguilla, and for days LIAT had the same two flights and that was it. I sat in that airport hoping against all odds to get out to St. Thomas. It was impossible. This has always been the case. If you don't book way in advance, you're out of luck. You would think that with American pulling out of Anguilla, that LIAT would have picked up the baton and run with it. No such luck. Once upon a time LIAT was the only game in town, and it's because of their lackadaisical service that other carriers have encroached on what was once their domain. I bought a ticket in Anguilla to go to St. Thomas and the amount of surcharges were amazing. You ask what's the fare and they tell you then when you pay you are hit with all of these surcharges. I kidded the clerk once when I found out that I was paying a fuel surcharge. I quipped, "not only do I have to pay the grounds crew, but you want me to gas up the plane too?" Needless to say, the clerk didn't think that was funny. I agree with the previous post. You don't want to antagonize your base. These are the folks who are going to get you into the black and ultimately pay your salary.