Gov’t studying feasibility of getting back into airline business

Apr 11, 2010 News

The government is studying the feasibility of getting back into the airline business, Head of the Presidential Secretariat, Dr Roger Luncheon has said.

He said the project would involve fashioning a regime that would attract investors and the travelling public.

Dr Luncheon said that government’s re-entry into the industry would depend on the financial and economic feasibility of such a move.

He said that discussions are now focused on what it would take for the government to finance such a venture, including the cost of acquiring a plane and whether it would be registered in Guyana or not.

“Guyanese may very well prefer to be travelling with a Guyanese-owned airline, almost like a niche. Some amount of competitive advantage creates some momentum and expectations that we have that this thing is feasible, but it generally calls for quite a bit of investment,” said Dr Luncheon.

In doing the feasibility study, he said the government would have to determine how to avoid the flaws that led to the failure of the previous two airlines— Guyana Airways and Guyana Airways 2000.

President Bharrat Jagdeo, in early March, said that his government has not ruled out getting back into the airline business. The announcement came as the government lashed out at what Jagdeo called “unconscionable” fare increases by Caribbean Airlines.

Caribbean Airlines is the main regional and international carrier out of Guyana, but it is the fare to destinations in the Caribbean, mainly Trinidad and Barbados, that the government is mostly outraged about.

Jagdeo said that what Guyanese are being asked to pay to go to Trinidad and Barbados is sometimes more than what it costs from these destinations to go to the United States.

Caribbean Airlines, Jagdeo noted, has argued that their fares are lower to the US because of the competition in these islands for flights to the United States. If that is the case, Jagdeo said, the Guyana Government could operate a service to Trinidad and Barbados.

The government was once engaged in the airline business, but when leasing one aircraft and employing 500 workers with a US$10 million subsidy was no longer feasible, the airline was closed.

He said that the country has done better over the years and in a discussion with his government Ministers about the fare structure of Caribbean Airlines, he did not rule out the government getting back into the airline business.

The government had previously announced that it was looking to increase competition in the airline industry following moves by Caribbean Airlines to increase fares.

President Jagdeo last year met with senior officials of Caribbean Airlines who then promised both a review of the fare structure as well as the quality of service the airline is providing.

However, those promises evidently did not materialise.

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Gov’t studying feasibility of getting back into airline business

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