A group of Greek investors have indicated an interest in operating a new airline out of Guyana but the high price of aviation jet fuel is a concern, President Bharrat Jagdeo says.
“We have a proposal from a group of investors out of Greece and other places,” Jagdeo yesterday said, adding that “they’ve offered the government some free equity in the new airline.” He was at the time responding to a question at an informal press conference at the International Conference Centre.
“We’ve made it clear we’re prepared to give tax concessions for domestically based airlines…so you would get a tax holiday for example-but the big concern has been the price of aviation jet fuel here, “ Jagdeo said. “It’s over US$5 per gallon, when you can buy that for US$2.10, US$2.35 in New York. So it makes an airline that is based here simply not competitive if they have to refuel here,” he added. “If we can bring that price down, it makes it very attractive to have a home-based airline.”
Jagdeo said it was with this situation in mind that he raised the issue about importing aviation jet fuel while he was in Venezuela recently. He said if GuyOil could import this fuel, it would help reduce the cost significantly. He noted that even if GuyOil does not make much of a profit doing this, there would be several other benefits. He identified cheaper air travel, the earning of revenue from air departure taxes and a boost in the tourism industry. Jagdeo said that the airline would fly to North America and the Caribbean and he said that the investors were talking about having three aircraft operating from here.
In March of this year, the President indicated that he did not rule out the possibility of the state re-entering the airplane industry in order to break the monopoly held by Caribbean Airlines. According to him, there is a need for services to be appropriately priced so as to ensure that people get value for money.
However, the establishment of a local airline service to serve the Guyana/North America routes by the authorities may take a few years to materialize as the local aviation body would have to upgrade its operations significantly.
The Guyana Civil Aviation Authority (GCAA) structure and operations were audited by the Caribbean Aviation Safety and Security Oversight System (CASSOS) to identify the requirements which would bring it up to standard where the granting of a licence by the United States authorities is concerned. The United States will not allow any airline to operate between Guyana and airports there, unless the local body meets certain international standards. Currently, Guyana falls in the Category 2 rating of the US Federal Aviation Administration (FAA) and is among 22 nations which fall within the category alongside Belize, Nicaragua and Haiti.
A category 2 certification implies that a lower safety level is maintained within the state, which would result in severe restrictions on the current operations of the state’s flag carrier in respect of flight operations to the United States.
Other consequences of such a classification are a limit to the country’s growth potential in the air industry; severe restriction on the expansion of the flag carrier’s service; and suspension of service growth to and from US markets.
