By RESHMA BAAL Monday, February 13 2012

MINISTER of Transport Devant Maharaj says he has taken the threat of litigation against State- owned airline Carribean Airlines Limited (CAL) by regional carrier Liat seriously and is awaiting a pre-action protocol letter.

Speaking to reporters following a ceremony at the Piarco International Airport last week, Maharaj said he could not comment further on the lawsuit threat. At a meeting last week, St Vincent and the Grenadines prime minister Ralph Gonsalves, who is chair of the stakeholder governments which operate Liat, said CAL has given the airline “unfair competition” due to its expanding services.

The meeting had been called to discuss the deteriorating situation of LIAT and what could possibly be done to turn the airline around, including cash injection, improving its cash flow problem and peace on the industrial relations front.

Gonsalves said Liat lost US$46 million last year, US$26 million more than in 2010.

As a result, Gonzalves said Liat would seek legal advice saying CAL was conducting its business by providing subsidies and coming onto Liat’s routes.

“They pay just US$50 a barrel for aviation fuel. We pay US$110, US$120. Obviously that can’t be correct. I have no problem with CAL coming on our routes, none whatsoever. The competition is fine but the competition has to be on a level playing field,” Gonsalves said.

Gonsalves claimed the unfair competition was in contravention of a Revised Treaty of Chaguaramas and Caricom’s Common Air Services Agreement.

Gonsalves, who also has responsibility for air transport within Caricom, revealed he had been mandated to take these concerns to Prime Minister Kamla Persad-Bissessar, in an effort to find a solution. He did not disclose whether he planned to ask Persad-Bissessar to extend CAL’s fuel subsidy to LIAT as part of a possible solution.