Nobody’s business if EZjet runs at a loss – CEO

Mar 10, 2012 News

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…company insists no links to Jagdeo, Ramroop

Low cost charter, EZjet, has said that it is nobody’s business whether the

company makes a loss or a profit.
During a press conference yesterday with local media, executives of the US-based company insisted it has no ties to local politicians.
The company also refused to acknowledge passenger figures which indicated that the charter which flies the New York/Guyana route is not so rosy.
EZjet started flying to Guyana on December 16, but airline officials questioned the source of financing of the company which is said to be owned by Sonny Ramdeo, a Florida-based Guyanese who said he invested his own money.
Revelations over the weekend indicated that Ramdeo, the Chief Executive Officer (CEO) and formerly of Windsor Forest, West Coast Demerara, still maintained a full time job as a payroll manager in a US health care company, has three other businesses. He has a US$348,000 mortgage on his Fort Lauderdale home.
Yesterday, Ramdeo flew in several of his executives to clear the air and during the press conference at Cara Lodge, denied that EZjet has links to former President Bharrat Jagdeo and his businessman friend, Ranjisinghi ‘Bobby’ Ramroop.
Also at the press conference were local airline industry officials and an official of the US Georgetown Embassy.
“EZjet has no affiliation whatsoever with any political parties and I want to make that abundantly clear,” Ramdeo said.
The charter company, which has been facing mechanical problems recently, is wet-leasing a Boeing 767-200 from Dynamic Airways, a Virginia, USA company.
According to Ramdeo, his operating licence in Guyana was granted after an economic study was done which justified the investment. The company stood in the line and waited its turn and was granted no favors, it was said.
The company was granted permission and started selling tickets in late November.
US sales
Ramdeo insisted yesterday that the US sales alone justified the expenses of EZjet. He used part of his mortgage to fund the startup of the company. This was to the tune of US$1.5M ($300M).
In the process, the former investment banker said he had to utilise the proceeds from his investments funds, stock options from the bank where he worked and his 401K, a retirement savings account.
The US1.5M was used to pay security deposits, bonds, for the aircraft.
The CEO insisted that the flights have been paying for themselves. “The difference between us and the competitors is that they are scheduled carriers…we are not.”
To protect passengers, ticket funds are paid into an escrow account in the US and not released until the passengers arrived in Guyana. On the Guyana side, the monies are held in a Scotiabank account.
“The intention is to build a national carrier for Guyana,” Ramdeo disclosed. In December, the company flew 2,200 passengers; January 4,200 and in February 7500, clear indications that things are looking up.
Asked about passenger figures which were available to Kaieteur News and which indicated an average of 90 passengers each way in the month of January, the CEO insisted that the figures were incorrect.
Regarding having a mortgage on his Florida home which, taking a risk to invest such a hefty sum on what is considered one of the riskiest businesses in the world, Ramdeo was of the opinion that it has no bearings. Rather, it was an opportunity that was capitalised on, an opportunity that is benefitting Guyanese because of cheaper airfares.
“…And if you truly believe in a business that you can make work when you have done enough homework and research, then you can mitigate the risks that are out there. It is a worthwhile investment. Sure there are investors that take those measures (and) those that don’t.”
No bearing
“The fact that I have a US$348,000 mortgage has no bearings whatsoever on a business idea. The fact that I did not pay off my mortgage tends to lend to the fact of what if I do pay off my mortgage, take the money and pay it off and then what?”
The official was upset after learning that the newspaper was in possession of the passenger figures.
“Well, sir, I am not sure where you got your flight manifest from or anything like that, but I can assure you that those documents are confidential but in respect to that, we are not allowed… no airline releases their manifest to the public (because it is) consumer protection.
“It is a violation of the law and as such that manifest is confidential. We stand by the information that we have presented on our passenger accounts.”
But then he said that EZjet had forecast a loss and passenger traffic with current performance exceeding expectations.
He noted that other airlines have schedules, but EZjet is able to reschedule and consolidate flights to ensure losses are at a minimum.
The charter is also buying most of its fuel in the US at a cost of between US$2.92 and US$3.35 per gallon, far cheaper than the US$5 it is selling for in Guyana.
Chief Operating Officer of EZjet, Richard Lee, stressed that the cost of operating charters is dynamic and depend on a number of factors every trip. The charter is focusing on the low season and minimizing costs and the mid-year and other high season will take care of itself.
Currently, Lee said, EZjet is concentrating on capturing the market.
No loss
“We never said we operated at a loss. We forecast an allowable amount and have exceeded our expectations.”
Yesterday, Ramdeo was unwilling to speak on specific figures saying it is no one’s business.
“As Richard (Lee) said, (it is) no one’s business. We do have full cost but the price of our charter is our company business… no one else. That is our company business if we losing money or not. If we are making or not, that is our internal discussions. No we are not losing money.”
Last week, Ramdeo, speaking to Kaieteur News during a taped interview, said that his company was leasing the jet for US$74,000 inclusive of crew and the plane itself. Rough calculations had put the fuel cost and the plane costs to around US$150,000. With passengers’ figures available to Kaieteur News indicating a 41% flight load, there was the conclusion that the charter was losing money hands down, bringing into question, how in the first place the investor found it feasible.
Ramdeo declined to have the tape played and said he knew what he had told Kaieteur News.
He has a full time job and three other businesses.
He also said that he has a number of investors from two health care companies willing to invest if the need arises.

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