Mounting local concerns about refunds as LIAT faces closure
By Kamal Haynes, BVI News Staff
With the financially strapped regional airline LIAT facing the likelihood of being liquidated, many stranded customers with credited accounts have been left in the dark on how or if they will be refunded.
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company cannot pay its obligations when they are due.
BVI News interviewed two persons in the territory who have been affected by these latest developments by the regional airline.
Concerned about refund
The first person, a Long Trench female expat who requested anonymity, said she is quite uncertain as to how she will return to her home country, Barbados.
She said that after COVID-19 had affected her employment status here in the BVI she had made the necessary arrangements to make her way back home.
“I’m concerned that I may not receive a refund as I would’ve booked my return flight with LIAT, which was my sure way home,” she stated.
“The airline’s liquidation will definitely affect me as not many regional airlines fly directly between Barbados and Tortola. This would require me to spend at least $500 or more to book another flight out of the territory,” she added.
Savings running low
As a former supervisor in the local hospitality industry, she said living in the territory was becoming increasingly difficult, especially with no available commercial flights departing Beef Island due to the borders being closed.
“It’s not a favourable situation as my contract was terminated due to COVID-19 and my work permit cancelled. However, I still have expenses and responsibilities. As long as I am here and with no active income, I have to rely on my savings which are running low.”
Not qualified for unemployment benefits
Following advice from the Immigration Department, she has been in pursuit of employment to help herself manage financially until flights resume to the territory.
“I am actively seeking employment. However, I’m often advised that I am overqualified. With regards to the unemployment programme, I do not qualify as I was not in the territory long enough. Therefore, I am a long way from home, unemployed with expenses and no way out,” she explained.
More than $400 credited on LIAT
In the meantime, a Road Town resident who also requested anonymity said he is extremely worried about whether he will be able to recoup his more-than-$400 airfare that was credited to his LIAT account after the airline had cancelled the vacation flight he had booked.
“I had planned to take my vacation in Barbados in the month of April and I would’ve booked a round trip in March, which cost me $429.70. After COVID-19 was declared a pandemic and started affecting various islands in the region, LIAT announced the cancellation of all flights and credited my account with the money for the ticket,” he said.
“At first I was looking forward to the resumption of their flights after many borders in the territory had started reopening, but after several postponements of their resumption of flights, then hearing the news of a possible liquidation of the airline, that’s where my worries started,” he added.
Account on Webpage no longer available.
The Road Town resident, who told BVI News he was still gainfully employed, said he had decided to browse his account on LIAT’s website but was caught by surprise when he saw that everything had been removed.
“I decided that I would go and see what flights were available, but was met with an unusual message from the site and nowhere to possibly log in. At first, I felt that the site may have been down temporarily due to it being updated. But after revisiting couple days after following the news of it facing liquidation and seeing the same message, that was when it hit me that my money may be lost.”
“I called LIAT’s hotline but was told that the webpage would be back up within a week, but even after a week had gone, nothing of the norm had returned to the page,” he further said.
Customers left in the dark/Indefinite suspension of flight
Meanwhile, in a Friday July 10 publication on LIAT’s Facebook page, the regional airline made an announcement that further left their customers in the dark.
While confirming that the company was facing the possibility of being liquidated, LIAT made no mention of whether customers will be refunded or whether flights will ever resume.
“While the Board and shareholders have considered numerous proposals to safeguard the survival of LIAT, the COVID-19 crisis has created unprecedented challenges. These challenges have led to options which include a proposal to liquidate the airline,” the statement read.
It added: “Further information about LIAT’s future will only be available after LIAT’s next Annual General Meeting which has not yet been scheduled. As a result, we deeply regret that we are unable to provide any further information to assure you but promise to update you as soon as a decision has been made.”
LIAT is, therefore, asking all customers to continue to monitor their page for all future updates.
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To my knowledge, often times when a company is liquidated, there is an order in which creditors are made whole. Further, for the hard and deep financially strapped companies, they may only get pennies on the dollar, if any. The outlook for many LIAT creditors look bleak. LIAT 1974 Ltd does not have assets to make creditors fully whole and neither does the owners, eg, Antigua and Barbuda, Barbados, Dominica and SVG, the major shareholders that hold 90% plus of shares.
Moreover, given the unemployment situation caused by COVID-19, government should make airlift arrangements with expats home countries for those that want to and to, to repatriate.
The best outcome for LIAT, regional air connectivity, and creditors is for LIAT to liquidate and restructure and be operated in a more managerial effective and efficient manner. This may mean fewer daily flights to many destinations. As a means of raising capital, LIAT should consider becoming a publicly traded company.
First understand this. The Negros do not ever refund money once they have it. There is no such ting as Consumer Protection. This was a negro run airline and kiss your money goodbye.
I wonder when we getting back a refund from them phony white men for the BVI Airways Plane.
Dem people scammed the dumb negro. They laughing at all da way to de bank mon. De scammers got scammed
Don’t bring your racist, (trump wannabe), mindset here. We don’t need that kind of thinking in times like this. Piece of trash.
You are a crude racists.
You are existing in a bygone era.
You can never adopt to the new world of Brown skinned people.
Last, underand this, whites and white businesses do not give back anything.
Sadly, you are hoplessly lost in an antiquated mental frame of racial inferiority.
First you go on calling someone a racist… and then you go on making racist remarks.
You are fighting fire with fire. Probably not so wise.
Here you are posting racially inflamatory, degrading and racially denegrating and stereotypical comments about “negroes,” and want to get angry and threaten lives when they respond back.
Well, any time fireman, bring it on.
They went/came without passports or land. Today, they want compensation for land they stole from the indigenous people they met there. Are you familiar with that mentality. Are you one of them?
Regrettably, it looks highly likely that regional airline LIAT(1974) will be liquidated. The recent differing views coming from a few major shareholders seem to make it more likely. This will be a blow to the much needed regional integration effort. During the fledgling West Indies Federation (1958-62), a regional leader quipped that, “one from ten leaves nought.” The Federation quickly disbanded soon after the quote. In LIAT’s case, two from four may indeed too be nought.
Moreover, in a liquidation, a company’s assets are distributed among creditors. However, typically a liquidated company usually don’t have the assets to pay creditors in full so creditors often get paid less than the full amount owed. LIAT does not appear to have the assets to pay creditors in full. Which creditor gets paid first?
The order of payment depends on type of creditors. Secured creditors, eg, bond holders gets paid first. Next is unsecured creditors, including employees. Stockholders generally are paid last.
The way forward for LIAT is to liquidate and re-emerge as a new entity. A liquidated, restructured, leaner and effectively-led/managed/operated LIAT with a new vision/mission and staffed with eminently/best qualified members can deliver value for the region, its people and regional air transport.
Now they bawling when they created a bad name for the airline. “Leave Island Any Time” is out! Now be happy.
Liat always out of money because of unefficient staff. If they leave your luggage behind (staff fault) they does have to pay your travelling expences to go to get your luggage (unecessary expenses on liat) also lost luggages they refund you. Many times the cancel flight and had to put clients in hotel and provide food (unecessary expenses). They also had mixed up tickets and flights causing them to provide accommodation and food for affected clients.
My company bought a ticket to Trinidad (for $930!!!) for me to attend a conference in March. When we saw the COVID-19 situation getting worse, we cancelled my attendance. The day before the conference itself was cancelled, lol! LIAT gave me a credit to use within 1 year. But if LIAT no longer exists, how will I use that credit? I am wondering if the new restructured company will honour LIAT’s obligations. Waiting to find out.
Anyone that has Liat tickets or credits would best be prepared to get nothing back. They are bankrupt and have no assets.
Well the customers should have a court ordered seizure one of their aircrafts. Lol.
aircraft are owned by banks. The aircraft cannot be seized,
Chances of customers getting a refund from so be to be liquidated LIAT are almost nil. Customers will be at the bottom of the list of creditors. First will be the shareholders, employers, the leasing companies that own any of the aircraft and any banks, credit unions etc. That said, by the time all these creditors are paid, there will be little or nothing left for customers who booked flights prior to COVID-19.
Secured creditors have first priority to proceeds from sold assets. If there is anything left the unsecured creditors which include persons with flight credit split up any remaining which may be cents on the dollar. If the company is sold they may have a better shot at retaining the vale of the credit versus liquidation bankruptcy.
I’m also a single mother who living in Antigua and I booked 4 flights at the over cost of $5000 dollars EC and it unfair that my children is not with me and I worked so hard to save my money to get my children with me and no one is telling me anything about my money. LIAT was not giving ticket on credit I had to pay.so I need to know what is happening.
Liat board of directors needs to reconsider its decision of living us in the dark. For instance if I have to travel from slu to sxm liat will take me to Antigua and the smx on the same ticket. But with those 6 airlines replacing liat none cannot and will never be able to comply with liat routes
It’s just so interesting how monies are already secured for a new entity. So it’s possible to take care of atleast the customer who are stranded those who have to return to their home lands atleast.
That is just unacceptable and disrespectful to customer who invested their earning . Something must be done. Liat should make arrangements to atleast issue out vouchers that can be used via other airlines or utilize the three owned aircraft and get people home. They have money and if we sit and do nothing and don’t pursue the matter ofcourse we will get nothing in return.
Poor management brought liat down . Some body just wanted much more than they know the should earn caring less about the future impact that we are being faced with today.
don’t see a refund but will remain positive, if my money is lost then I’m sure God will make a way for me to get a flight on who ever is heading my way. Thos current situation is challenging and many are left without help. God help us all.
The shareholders saw it coming, instead of being honest enough to customers and say it’s over, they’re making it appear as though there is still hope.
But if they think that ripping us off is cool it’s not funny. Many of us are stranded, unemployed, unsupported etc, how do we get home?.
Tell us what to expect from here on, do you think we’ll be obligated to fly with whatever new airline coming on board as a replacement.
Think about putting measures in place to get us to our destinations, since you already have our credits.
I want my refund also. It’s a hard pill to swallow in these difficult economic times.