Chinabankrolls $150 million upgrade of Guyana’s international airport

By Larry Luxner, June 17, 2013, Source

Kaieteur Fallsis the world’s tallest single-drop waterfall. (Larry Luxner)

Cheddi Jagan International Airport is about to undergo a dramatic transformation that will enable Guyana’s only air link to the outside world to receive larger, heavier aircraft — boosting direct passenger traffic to and from Europe and North America.

The $150 million project, to be financed mostly through a $130 million loan from China’s Export-Import Bank, will be finished by 2015. The idea is to turn the now-sleepy rural airport — located 25 miles south of Georgetown — into a busy regional hub that could eventually link northern Brazil and the Caribbean with Africa.

“The biggest challenge we’ve had over the years with CJIA is the length of the runway and the size of our terminal building,” said Ramesh Ghir, CEO of the Cheddi Jagan International Airport Corp., which oversees CJIA. “If we were to process three flights at the same time, the terminal building would be filled, and we’d have overflows. This leads to inefficiency; you cannot process passengers in a timely manner this way.”

Trans-Guyana Airways small plane prepares for takeoff. (Larry Luxner)

In 2012, the airport handled 543,000 passengers, a 16 percent increase over 2011 volumes; this followed a 7 percent increase the year before. That means traffic at CJIA is growing at twice the regional rate of 8 percent a year, and more than three times the worldwide annual growth rate of 5 percent.

Much of this jump in air traffic is linked to a boom in the Guyanese gold and diamond mining sector, as well as increasing offshore oil exploration and rising numbers of overseas Guyanese coming to visit friends and relatives back home.

To cope with more demand, CJIA’s runway will be lengthened from the current 7,500 feet to 10,500 feet. Likewise, the new passenger terminal will measure 14,000 square meters, twice the size of the current 7,000-square-meter terminal. It will also have eight boarding bridges to protect passengers from the elements; the current terminal has none. One additional parking position may also be dedicated to cargo.

Flags of Haiti, Guyana, Brazil and other countries fly over Rahaman’s Fruit Stall parked along Church Street in the Alberttown district of Georgetown, Guyana. (Larry Luxner)

Tourism Minister Mohamed Irfaan Ali says his country’s biggest tourism challenge is bringing down the cost of flights between Guyana and the rest of the world.

“Regional transport still remains very expensive and uncompetitive. At one time, you had to pay $395 for a round-trip ticket to Trinidad,” Ali said. “True, the cost of fuel is a major problem, but one of our good prospects is our proximity to South America and even Africa. We can become what the Panama Canal did for maritime traffic. Guyana can become a hub, and that’s why investing in this new airport is so critical.”

CJIA began life as a U.S. military base in 1941, opened to commercial traffic in 1946 and renamed Cheddi Jagan International Airport in March 1997, following the death of Guyanese independence hero and late President Cheddi Jagan. The current terminal building was built in March 1952 and was last renovated in 2008 — the same year Delta Air Lines launched nonstop service between New York JFK and Georgetown. The idea was to make it easier for the 130,000 people of Guyanese descent living in the New York metropolitan area to visit their families in Guyana, especially during holidays.

Delta nearly always had full flights going down and back,  but the Atlanta-based airline  suspended its Guyana service effective May 6.

“We don’t know why they’re pulling out. They have never engaged us,” said Ghir. “We were just advised, not even officially but only informally by the airline’s representative in Guyana.”

Robeson Benn, Guyana’s minister of public works, said Delta’s 84 percent average payload and increased passenger growth “are contrary to the statement of significant declines in passenger loads” issued by Delta’s public affairs office.

“We have noted claims by Delta elsewhere of higher fuel costs and of a Guyana passenger profile which is biased toward the low end of the market with respect to fares,” Benn recently told local reporters.

Guyanese-American tourists visit Kaieteur National Park. (Larry Luxner)

Ghir, conceding that Guyana does have “significantly higher jet fuel costs” than its competitors, said state oil entity Guyoil is in the process of setting up its own fuel farm at CJIA, with the goal of reducing fuel costs. Guyanese authorities are also trying to attract other airlines to make up for Delta’s loss, among them Aeromexico, Copa Airlines and Gol, a low-cost Brazilian carrier.

“We’re negotiating with one airline we think will make a significant contribution [to replace Delta on the New York route], but our current runway is too short for the type of aircraft they use,” said Ghir, though he declined to identify the airline publicly.

“Not only that, but transatlantic flights direct from Europe cannot land at CJIA at present, hence the need for a longer runway,” Ghir explained in a recent interview. “The largest aircraft we can take right now is the Boeing 767. When we finish the expansion, we’ll be able to receive 747s. Our objective is to become a hub for the region, attracting flights from Africa that would stop here and go on to North America and vice-versa, as well as receive direct flights from Europe.”

Ghir added: “At the moment, Barbados and Trinidad are seen as regional hubs, but we push adventure tourism, and there’s a huge market for that in Europe. If we could make the cost of direct flights more reasonable, more people would visit Guyana.”

Asked if the local government would follow the example of the Dominican Republic, Argentina, Chile and Ecuador in expanding CJIA as a build-operate-transfer concession, Ghir said no.

“It’s a government-owned airport but it’s being operated as a semi-autonomous agency — and our model has worked for us over the years,” he said, noting that revenues rose from G$171 million ($855,000) in 2001 to G$1.2 billion ($6 million) last year.

“We’ve increased our income five-fold over the past decade,” he said, predicting that CJIA “will see 6 to 9 percent annual growth once the terminal is completed.”