Opening the Skies

Aug 15, 2010 Editorial

It has been almost six months since the idea of a government-backed airline was broached at the very highest levels of our administration. Responding to what was perceived to be arbitrary and unilateral negative moves on prices and regulations by the present carriers – not to mention the perennial shortage of seats during the summer months – the President intimated that Cabinet had discussed the modalities that would deliver a viable national airline. We are now in the middle of the busiest travel period of the year; we are once again in the unfortunate position of having no available seats. But no word on the new airline.
Obviously, these matters cannot be accomplished overnight. The President revealed after his lightning visit to Venezuela that he had raised and received encouraging responses to his inquiries of sourcing jet fuel at concessionary rates from that country.
It appears that for carriers refuelling in Guyana, the price of jet fuel places an unfair burden vis-à-vis their competition – most likely Caribbean Airlines, then wholly owned by the government of T&T. While we agree with the thrust of introducing more carriers into Guyana, we have to subject such government interventions to the strictest possible scrutiny.
First and foremost we have to look, not only to our experience with airlines, but towards that of the region and even wider afield. Airlines in general are very volatile businesses: over the last few decades we have seen the disappearance of some of the most prestigious and world renowned names – PanAm and TWA come immediately to mind. Regionally BWIA, the flag carrier of T&T, had to be privatised, downsized then nationalised again – all the while with the government of T&T infusing untold millions into its operations. This is the Caribbean Airlines of today.
Air Jamaica, the flag carrier of Jamaica, serving one of the most popular tourist destinations of North Americans, was thought of as a particularly strong candidate to buck the trend.
But after being subsidised to the tune of US$1 Billion over the years it was forced to go on the block after the Jamaican government itself ran into financial straits and went a-begging to the IMF. Caribbean Airlines bought them out and truncated its routes – many of which had made no economic sense but had only served narrow jingoistic sentiments. Such is the danger of the vanity of small states insisting that owning an airline is one of the modern symbols of nationhood.
The story of our own state-owned Guyana Airlines, its privatised successor Guyana 2000 and the ill-fated Universal Airlines – all of which left Guyanese literally holding the bag – hardly needs retelling but bears a lesson for us today. The lesson is that it is impossible to run a viable airline over any extended period to service our country, when it can only utilise at most, one aircraft.
Even if that aircraft is owned (a la Guyana Airways) or leased (wet or dry – a la the successors) aircraft are mechanical objects that will inevitably develop mechanical problems. And during the busy periods, when alternative crafts cannot be sourced easily, this will inevitably prove to be fatal to operations as schedules suffer from a domino effect. While cheaper jet-fuel might help deliver greater profits it will all disappear in the red ink that flows from being forced to subsidise irate stranded customers.
So what’s the solution? One option has been on the cards for decades but has not been played because of short-sighted, misplaced nationalism. All the experts have pointed out the necessity for and the advantages of one airline – owning multiple craft – for the region. With the acquisition of Air Jamaica by Caribbean Airlines – and granting the Jamaican government a 16% share in the corporation and its designation as the flag carrier for Jamaica – we have been forced by necessity along that path.
It is now over four years that Caribbean Airlines has applied to be the national flag carrier for Guyana – and fly directly to the destinations we designate, such as NY and Toronto. Maybe we should give them a shot and at the same time give regional integration a shot in the arm?

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