Liat plans to decide on future fleet this year

Miami
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Caribbean regional carrier Liat is looking at acquiring Dash 8 Q400s as part of a new study into future aircraft alternatives.

Acting chief executive Brian Challenger tells ATI the Antigua-based carrier has initiated an evaluation of new turboprops and plans to hire a consultant to help it evaluate its options.

Liat currently operates 15 Q300s and three Q100s. The carrier is keen to renew its ageing fleet over the next few years but Challenger says its options are limited because Bombardier has stopped producing turboprops with less than 70 seats.

Challenger says one option being examined is to acquire a mix of Q400s and second-hand Q300s which are newer than its current Q300s. Under this option, Liat would keep its three Q100s for cargo operations and very thin passenger routes.

He says the youngest Q300s currently available are eight years old, providing an improvement over Liat's current Q300s. According to Flightglobal's ACAS database, Liat's Q300s are now 14 to 19 years-old.

Switching the entire fleet to ATR 42/72s is also being looked at but Challenger says Liat will most likely stick with Dash 8s.

"Financing is an issue [for ATRs]. We don't have the same relationship with the French government as the Canadian government," Challenger told ATI on the sidelines of last week's Low Cost Airlines World Americas conference in Miami.

He adds Liat also prefers not to switch to a new aircraft type because any transition would require operating a mixed fleet for a few years.

The Chinese government also is offering Liat Xian MA60s through government-to-government channels. "The China government is very keen on making aircraft available," he says. "The financing wouldn't be a challenge but support issues are high. It's really unlikely we'd go that way."

He adds another challenge for the MA60 is the aircraft has not yet been certified in the US or the Caribbean. He points out public confidence in Chinese-built aircraft is also low.

Challenger expects a fleet decision will be made this year. While Liat in recent years has initiated several evaluations of new aircraft alternatives, the carrier's executive team says this time it really needs to make a decision.

"Our fleet is ageing," says Liat chief financial officer Julie Reifer-Jones. "We want to complete an assessment this year. As part of that assessment we are looking for opportunities for financing."

Further adding to the urgency, Liat's Q300 leases will be expiring over the next few years. Challenger says Liat has two Q300 leases expiring later this year and another two leases coming up next year. He says some of Liat's Q300 leases will likely be extended temporarily.

Liat currently connects 22 destinations throughout the Caribbean with most flights operated using 50-seat Q300s. While some routes can potentially support 70-seat Q400s, Challenger says switching to an all-Q400 fleet is not an option because it has several routes which can only be sustained with 50-seat aircraft or smaller.

Challenger says routes which could potentially be up-gauged to Q400s include Antigua to Barbados, Trinidad, the Dominican Republic, Puerto Rico and Guyana. Reifer-Jones says Liat could also potentially use Q400s to launch new flights, with Jamaica and Cuba possibilities, but network opportunities for Liat depend on how the dynamic Caribbean market shapes up following the Caribbean Airlines-Air Jamaica merger.

Challenger would not say how many Q400s would potentially be required and whether Liat would opt to acquire new or second-hand aircraft, explaining the consultant which Liat is now looking to hire will help it make some of these determinations. Challenger's predecessor, Mark Darby, told ATI in November 2008 that Liat could potentially use three to four Q400s but most of the carrier's Dash Q300 fleet would need to be replaced with similarly sized 50-seat aircraft.

Challenger says 50-seat aircraft remain the ideal aircraft size for most of Liat's routes. He says 37-seat aircraft are also needed for very small markets such as St Kitts and Nevis.

Liat owns its three Dash 8 100s, which according to Flightglobal's ACAS database are 19 to 21-years old. Liat is now in the process of converting one of its Q100s into a freighter. Challenger says Liat will consider converting a second Q100 into a freighter but it plans to continue to operate its third Q100 on its thinnest passenger routes.