Antigua and Barbuda, as well as other countries in the region, is working to promote and attract foreign investment. What would you say is Antigua and Barbuda’s competitive advantage compared to other countries in the region and what are the areas where it can still get better?
Antigua is very unique in the Caribbean I think. In terms of the beaches, what it offers to the sailing community. Very often, the Caribbean product is typically sand and sun, and of course there is that in Antigua, but the opportunity to experience not just the sun and the sea but actually cruise the coast, it’s a very enjoyable way and it’s one of the special things that Antigua offers to the region. For me, coming from outside of Antigua, there are a lot of special areas of interest, like English Harbour. This is something special to the country. I don’t think Antigua has promoted itself enough as a destination even for the regional traveller to enjoy as a location. And the Antiguans are very friendly, but that is very typical of the Caribbean. I think, generally, the people are warm and easy to talk to. I know that the government has some important strategies for upgrading the tourism plan. I think we have been in the tourism industry for a long time and we believe that the Antigua tourism is in that phase that it has to be upgraded and certainly we will be looking forward to investments in this area as part of what will assist LIAT to play its own role because although we act like the organization most of our customers are regional. We play a critical role in moving tourists around the region and this is an important part of our revenue and we want to continue to do that. So the more tourists that come to the region, the better for the region and the better for LIAT.
Taking into consideration Antigua & Barbuda competitive advantages combined with the countries current strengths, which sectors do you believe offer the most attractive investment opportunities?
That one is difficult because the Caribbean is very driven by tourism and we still think that there is a lot of opportunities for growth and development in that area. Antigua in that regard is no different. So I would say that tourism is perhaps the most important critical area for investment. The industry is diversified and has many different segments, for e.g. there is certainly growth in the yachting and sailing segment. Tourism support services also has much room for growth. And because it is a tourism based economy and region, we still consider it to be fundamental to the growth in the region as a whole. I would say that perhaps this is the most important area for investment.
Until 2008, LIAT's services to Anguilla, Antigua, Dominica, St. Lucia, St. Kitts, Nevis, Montserrat and St. Vincent were code shared with Carib Aviation, which also used Antigua & Barbuda as its hub. Why choose Antigua and Barbuda as headquarters and how significant is this market for your portfolio?
Antigua as a hub has a lot of history. The original history of LIAT was centred around this section of the Caribbean and in that context it became a natural hub. As the airline grew our activities expanded more into the southern Caribbean’s and along the way Barbados and St. Vincent also invested financially more in the airline. In our experience the market is not static and the traffic path has changed over the years and we also know, observed that there is quite a bit volume of traffic into southern Caribbean. In this area we are close to Trinidad and we try to captive this market of course it is competitive, but looking at that in the point of view of market and the scoop that it covered within the region it has expanded beyond the hub of Antigua. So, Antigua is critical to the flow but the market base that we are serving is much wider then Antigua. As we look forward we have had discussion about expanding the network and some of those opportunities to expand in areas that have higher populations. We have talked about doing some flights to South America, to Brazil, threw Guyana; we have talked about going to Haiti, and of course Jamaica. But at the present time those destinations are not in our current network. As you may know we very recently competed of fleet transition that we have been focused on for the last three years and in that context we are focused on just trying to stabilize the operations on our current network but our business plan does suppose that we want to expand to the other destinations. For us however, the major object was to complete a few changes, for example, we have another aircraft coming in October. As we move forward we are looking to revise and improve our schedule in such a way that we can deliver a more reliable product to the market. We know that it is a big issue with our customers. Our focus it is to get that reliability in the schedule such that all our regional passengers and also tourists visiting can count on the schedule from island to island.
How many is your fleet at the moment?
Nine, we have nine aircrafts and the 10th is coming in October.
And those new routes that you have mentioned. Will they come from Antigua’s base?
Not necessarily, because the new routes in the southern Caribbean will probably be more from Barbados, but for Antigua, the routes will be to Haiti and there was some discussion about Cuba. So we are really looking for those opportunities because it is part of our business plan. There will be some additional aircrafts in order to be able to service more destinations.
Last year we witnessed the opening of the new terminal at the V.C. Bird International airport, which presents many opportunities for new airline partners to fly into the country. When we met which Mr Stanley Smith he spoke to us about Antigua becoming a transportation hub for the region, and therefore interregional connectivity will have an even bigger role to play, which also presents further investment opportunities in regional airline operations. How does LIAT intend to stay relevant within this growing and developing market?
We need to extend the fleet, but what is more important is that in the Caribbean there is a lack of alliances. So we are now working, we have got more relations with other Caribbean carriers, but what is important now is to go to the next stage where you are not competing at all. What is interesting with the clients from British Airlines or American Airlines is that very few passengers do one stop. They will do two island holidays or they will do two different trips. So, we have for example the BA flight tomorrow, 60 people of the 220 carried by that flight will fly with us to either Dominica, to St. Kitts or elsewhere. So that’s where we become really critical. What is also important is that we are hardly looking at what we do within the Caribbean because I think it is easier to rely on traffic from the UK, US and Canada. However, it is important to focus also on the Caribbean region, which is really what it is all about. It is about the Caribbean trying to pick up the richest tourists in the market.
The Caribbean Tourism Organization see the importance to promote the Caribbean as a region because very often the person looking to plan a holiday looks at the possibilities of going to the Caribbean and in that context one of the things that we want to work consistently is the idea of the multi-destination holiday. So, if the person travels to Barbados and then St. Lucia and then comes to Antigua and then to Dominica it will help to enhance the experience of coming to the Caribbean as a whole. Also, it will be beneficial to LIAT because it will play the bigger role in making sure that Caribbean experience is something that is beneficial and that will help to stimulate growth in all the territories. So, once we are able to improve our network and the reliability of the network we want to look and work to enhancing packages that will allow multi-destination programs to work more actively with the Caribbean Tourism Organization. That is certainly something that we would like to see happen. And LIAT has a very important role because that interconnectivity is the key component.
LIAT currently has a partnership alliance with: Virgin Atlantic, JetBlue Airways, PAWA Dominicana, and had former agreements with BWIA West Indies Airways and Carib Aviation. Does LIAT have any plans to reach out to other potential partners looking to fly into Antigua and how do you communicate to them?
We work also with British Airlines, Air France, Corse Air and others, but we have a lot of money that was spent on technologies which will allow us to have much more work.
Having changed the fleet, what we need to do at this point in time is to make some improvements in infrastructure that will allow us to expand these relationships and to make them more beneficial both for us and for the other partners. That connectivity with the major airlines is not on the right footing and we want to make sure that we do that investment entirely so we can take advantage of the relationships and growth.
Cargo services also play an important role within your business operations. How is it important is this segment for LIAT’s portfolio? And are you looking to expand to offer more services?
Cargo is important to us and we certainly want to do some additional investments in that area in the next, I would say, two to three years, we need to relocate it. What is happen in our fleet transition is that in changing the fleet we also had to make plans to exit an aircraft. So strategically what has happened is that we had to take a step back, and what we are doing now as part of reviewing our opportunities for grow, is to look at how we can best service that cargo market as we move forward and that will probably require dedicated aircraft of a different type. So this is an area of the market that we will have to reinvest in and to redevelop. For us, it has been a step backward but it is the step that we knew we were taking in the context of the future.
You’ve talked a lot about investment in the different areas to cargo and to expansion and improving the services. Where are all the funding come from?
Some of the funding has already been identified, it was identified as our fleet organization project and it had several different components. It was a combination of funds from the major shareholders and from the Caribbean Development Bank. So, there are some elements that have already been funded and we will access those funds for some of the projects that we are putting in place this year. As we move forward for the additional aircrafts we will continue to have discussions with both the existing shareholders and some other territories that we are trying to bring on board because our position and perspective on this is that LIAT is serving the entire region, we are connecting the region. It is also what makes the region work and frankly all the territories should be contributing to maintain that service. So that is the dialogue that is ongoing based on that aspects: we will continue to provide service as we are doing but we would like all the governments to contribute to this help in terms of development of LIAT.
Is there an opportunity for private investment?
Probably investment from India. I would think that there is an opportunity there, that we have found in the past within that discussion is that many private airlines are not that interested in LIAT network per say because it is not all profitable. We get quite a few demands of flights services, flights early in the morning, flights during a day, flights late at night and we try to service each territory in that way that will facilitate that connectivity. But the reality is that with the small populations that we have in these different territories those flows are not always strong enough to justify independent flights. We try to combine our services in such a way that overall they will result profitable and we have over the years dropped some routes because of that, and we are continuing to do that review. We are engaged in discussions with the territories about how they can provide some support. That support is not always forthcoming but we continue to work on it to try to encourage them to invest.
The private carriers want to come on specific routes where the value is such to justify the connectivity. There are many routes where we do have competition, because there is a specific perception that LIAT has no competition, but it is not true. There is something like 15 different airlines, which are actually competing in the LIAT network. Some of them are flying on the same routes that we are operating. We have for example British Airways; they are flying to Dominican Republic, so for LIAT we are not a monopoly. We are the dominant player but many of these smaller airlines have flight routes they consider profitable and where the passenger traffic will support a flight at specific times. So very often they will not propose a schedule of flights covering the entire week. They make a commitment maybe two or three times a week at specific times. We have the commitments with the territories to try to have the morning flights, flights during the day and flights in the evening. We don’t always do all of that but certainly for the major of territories we try to. So it is a bit challenging but we do have that competition within the network and we try to make our services competitive.
As you know innovation is crucial to the long-term survival of any company. What are the innovations that LIAT incorporate into its work?
I would say that LIAT is trying to bring its technology and infrastructure up to a level that will allow it to compete. We have probably been slow in doing that but we have made that commitment now. That is the direction we are going. This the only way that we will be competitive. So, a lot of the projects that we are referring to, as things that we have committed to, will allow us to put the airline on a much more efficient basis. So, it is not so much that we are introducing things that are entirely new. We are taking steps to bring the airline in line with modern airlines and technology running the business.
Tell us about LIAT’s target markets in Antigua and Barbuda and the region. Does the airline target predominantly business or leisure travellers? What is the ratio of your customer base?
We have a mix market. Our market is 85% regional and 15% external to the region. Of the 85% regional, it is really a mix of business and leisure and because we are providing that connectivity to the region what you find is that people combine business and leisure very easily. We have to go to a meeting, and it is an opportunity to connect with friends and family. We provide that connectivity in terms of friends and family visiting for an occasion, a wedding or a funeral. Groups will organize; especially for Easter we have a lot of that, in the summer, and especially at Christmas. You get groups who will organize across the region and compete. You get families who are taking holidays back to their home territory, because there is still quite a lot of mix in the population within the region. So, I might be from Barbados but I am based in Antigua so my family will come to visit me in Antigua.
We would like to expand our role in terms of number of international passengers that are moving between the islands and that is a component we would like work on and move forward because it helps to enhance that experience of the Caribbean within the region and that of a specific territory. But as I’ve said, we want to try to stabilize our network in such a way that that confidence can be there.
LIAT has a relatively uncertain reputation among both locals and visitors to and from the Caribbean Islands. Some residents of the Caribbean joke that LIAT is an acronym standing for "Lost In Antigua's Terminal" and "Leave Island Any Time." How do you try to change this image of LIAT and how would you like to see your brand perceived?
It is a big challenge for LIAT and we are working aggressively to change that image. Now, I talked about changing the infrastructure because we experience a lot about this issue (baggage lost, deleted flights). We are using a lot of manual systems in our operations, the old system that is not very relevant in today’s work. So our focus is to change those systems to provide the environment that will allow our employees to be able to manage operations more efficiently, to be able to deliver the bags, because of course this is impossible to do some operations, that we try to do, manually. So that is the key thing. We also have a customer service program that we have initiated for the airports. A lot of the customer services training has been entirely focused on the crew and not enough at the airport so now we have a customer service at the airport. The other area is communication and again we are working on that. The communication is also linked to the inadequacy of the systems because some of that information is being lead from point to point verbally. We are working on some issues that will allow us to see an improvement of the communication, but in order to improve that we will have to do that by improving the technology. Those changes require investment and this is what we have said, all the territories have an interest to invest. There are some other issues, which are more related to the schedule. Some of the issues within the LIAT network have to do with constraints that we are operating within across the region in terms of airport operating times. Some of those constraints are about managing the time in the airports and within the rotation we have to get to. What happens in the US territories is that for original airlines like ours, the US airlines are allowing local US based airlines to operate 24/7, because you don’t have those kinds of restrictions. We are operating in an environment, it is not a local space, and it is an international space so each territory has its own arrangements, different requirements, so that makes it difficult for us. When you put those airport limitations on our network, if there is a delay that did not allow us to reach that destination by the require airport closure time, we have to cancel the flight. Now, it is difficult for the passengers to understand why that cancellation is happening and in the past we have always communicated to them that this is the requirement from the airport. The nature of the network is such that that happens. We are trying to review the schedule to come up with something that we going to live within.
The biggest issue for us right now is to try to get all the territories to come on board and to recognize that they have an interest in that LIAT functions efficiently and that has a cost. There are some territories now benefiting from the LIAT network and they are not contributing. There are others who are contributing but it needs to be a giant commitment to improve the operations.
Corporate social responsibility (CSR) is an invaluable way for any company to give back to the communities in which they work. Is LIAT engaged in any CSR programs in Antigua and Barbuda?
We are engaged in quite a lot of small activities. Social clubs come to us for the assistance during an event and we contribute, again because we are the regional airline. Whenever they are regional activities they will come to us for support. Of course, we also contribute on some of the regional activities in commercial context when there is carnival we are sponsors. So somewhere there is a shared interest. Some direct community support is focused around some specific social clubs here in Antigua, but this is something we want to look at as we move forward because we need to make a longer-term commitment to one of the projects within the region. The other area where we make a significant contribution to the community is that, as you know we are in hurricane zone and sometimes different regions are affected. Last time Dominica was affected very badly and of course LIAT provides support trying to get not only the passengers but also the support supplies like water or food. A few years before we had Hurricane Thomas, which affected St. Lucia, and we had to shuttle passengers and supplies between the airports until it became stable. Sometime I think we were the only airline that landed in St. Lucia. The irony is that when those events occur it is assumed that LIAT will be there to provide the support, and we are always there to provide the support but many of those countries are not contributing financially. But we provide the support and we will continue to do that. So I would say that this is the biggest community activity that we have supported over the years.
And no matter what. LIAT has been around over 60 years and has never left anyone.
On a more personal note. You are currently the acting CEO, not for the first time, with much experience wearing many different hats within the company. You are the perfect person to ask how you foresee the future of this company over the next coming years?
For me LIAT is fundamental part of the fabric of the region. And I see and I’m hopeful that more of the governments will acknowledge that and they will come on board. Financially I think we are on the right path, we are doing some changes about the on-line technology so all operations will be on the more profitable footing. We continue to revel the profitability of the routes that we fly and we will take some decisions to remove the routes that are not profitable to the LIAT unless the territories will come on-board with support. So, looking forward I am pretty optimistic that we will take the decisions that we need to take to put the company on a profitable foot. But because I think the LIAT’s role is beyond just the economic contribution that we make I would like to see other territories on board to allow for us to provide that service beyond what we are doing.
The readers of HBR are some of the world’s most important and prominent leaders. What message do you have for them?
I think the Caribbean is a unique region with a high level of education with beautiful surroundings on all the territories. As a region it has a lot to offer. I think the education level is such that it will support investment in any area. And I think it will be useful to encourage business leaders to look beyond the usual and to look at what this region has to offer in terms of those education capabilities and in terms of the political stability as a region. These are features that can be supportive of investment opportunities for growth for major companies to look out for.