Guyana 150 Million Airport upgrade and no International carriers

Guyana, a Developing Country with a vast interior doesn’t have a national carrier and is spending about 200 million dollar to modernize and extend the runway of its international airport.  And without a realistic master plan, the country hopes to become an aviation hub in Northern South America. Interestingly, Guyana is struggling to attract reputable international carriers.  Adding to the woes of Guyana’s aviation industry which is non existent, was the decision to award Caribbean Airlines (CAL) flag carrier status which caught everyone by surprise. It was a hasty decision shrouded in secrecy and lacked transparency. So where is the justification to modernize and expand Guyana’s international airport, CJIA and naming CAL Guyana’s national carrier?

This could be the moment for the government of Guyana to get back into the airline business through a joint venture with Surinam Airways (SLM) or Liat but this may never happen because CAL is now Guyana’s national carrier.  Guyana granting CAL flag carrier status and Trinidad’s fuel subsidy to CAL is now unfolding and has caught the PPP Regime by surprise.

There are all sorts of speculations as to why Delta Airline is leaving Guyana. The government of Guyana denies that it’s the flag carrier status granted to CAL. Delta claims that it is low passenger load and CAL’s subsidized fuel that led to its decision to end its service to Guyana.  At the same time, Minister Irfan Ally said to the press that Guyana is keen to take up the subsidy issue. Strangely, why would that be an issue for Guyana? It’s the fuel subsidy thatCAL receives that keep fares low for Guyanese.  However, that will lead to other carriers such as Delta and Surinam Airways leaving the Guyanamarket soon.

Caribbean Airlines operates 39 weekly Boeing 737-800s flights fromGeorgetown, including 36 flights to Port of Spain and three flights to Barbados, five Boeing 767-300 non –stop flights to New York and 3 Non-Stop to Toronto, taking about 75% of the Guyana market since the demise of Red Jet. CAL is   poised to take about 80% of the market when Delta pulls out of Guyana in May. Considering this and the large fuel subsidy that CALreceives from the Government of Trinidad, it’s hard for small airlines such as Fly Jamaica, Red Jet or Surinam Airways to survive the Guyana market.

CAL is accused of driving airlines out of the Caribbean. Chief Secretary of the Tobago House of Assembly Orville London speaking on the issue of Tobago’s tourism industry this week said he was not comfortable with the role Caribbean Airlines (CAL) was playing. He said that “CAL was using its subsidies from the central government to introduce predatory pricing on routes into T&T, deterring foreign airlines from bringing people to Tobago.” This could very well be the reason why Delta is leaving Guyana and SLM maybe next.

In my previous letter to Stabroek News, dated December 25, 2012, I asked the following: “CAL may very well do as it pleases because the Government of Guyana will now protect the North American routes and the POS-GTBridge. What agreement did the two parties sign? How does this affect Delta and Surinam Airways, and future carriers plying the North American routes? What recourse does the government have if CAL disappoints the Guyanese people?” Well one thing is for sure, Delta is terminating its service to Guyanaand CAL is yet to station aircrafts at CJIA connecting Guyana to Brazil and Lethem.

A Developing Country like Guyana with a vast interior needs a national carrier even if that means servicing domestic and regional routes only. The PPP Regime rants about their growing tourism industry. One wonders how many local Guyanese can afford to fly domestically.  However, CAL had promised the PPP Regime that they would service at least Lethem from what information was shared with the media. This hasn’t happened yet. And locals can’t afford to fly with private domestic carriers unless their families who are visiting from North America pay for them. Thus, it’s an empty promise that the PPP Regime at Freedom House is serious about opening the country’s frontiers.

I had asked, “Were SLM and Delta consulted before this agreement with CALwas made? The PPP/C regime begged SLM to return to Guyana. How does this affect SLM’s plans to expand into Northern Brazil, New York andToronto from Guyana?” It is very clear now that Freedom House kept SLM, Delta and LIAT in the dark about   granting CAL flag carrier status. Now how embarrassing it is that the PPP Regime approached SLM to service the New York route that Delta will drop. Really, does this administration consult or think before it acts?

Suriname according to some economists and the agencies, Moody and Finch, is poised for a serious economic take off and this could have been an opportunity for the Guyanas to forge an alliance with SLM. Surinam Airways already exist and it’s more reliable than the fly by night’s carriers that often fly the skies of Guyana. SLM has three equipments, two Boeings 737 and an Airbus 340. SLM does not have an aircraft to service New York non-  stop from Guyana and is looking to get rid of its Airbus 340 and add two Boeing 757,  but that’s not possible right now since the lease on the airbus terminates in 2015. SLM is having difficulty plying one aircraft on the trans-Atlantic route to Amsterdam.  As well, there are frequent delays on SLM’s flights from Guyana to Miami, Cayenne, Belem and Paramaribo because the government often charter one of the Boeings 737-300 for overseas trips. According to information out of Suriname, they are looking to acquire an additional Boeing to fly regional routes and future expansion into Northern Brazil.  Paramaribo will definitely need some sort of incentives from Guyanaif they are to connect Guyana to New York.  What did President Ramotar promised SLM in Haiti?

In addition, the future of Fly Jamaica, the new upstart airline that plans to fly to Guyana is very uncertain. Guyana is and will not be a tourist destination in the near future.  Further, there are no migrant workers who travel back and forth between Guyana, Toronto, Miami and New York, thus, reputable air carriers such as JetBlue may not fly to Guyana. The Guyana load is seasonal and the country has little tourist infrastructure to be marketed as a tourist destination. Further, and above all, because of high crime rate, violence and constant political turmoil in Guyana, tourism is unlikely to take off. Guyanese going back home are not tourists.