Fly Jamaica, CAL applications in U.S. limbo

Aug 09, 2013 News

…Delta reveals fuel subsidies, excess tax caused pullout

Almost three months after pulling out from Guyana, one of the biggest airlines in the United States is reportedly claiming that unfair operations of Caribbean Airlines Limited (CAL) are among the main reasons for its withdrawal.
The disclosures are part of the claims made by the US airline industry and the largest pilots’ union, on behalf of Delta and other carriers, in filings to block planned flights by two regional operators on the Georgetown/New York route.
According to papers filed by Airlines for America (A4A) and the Air Line Pilots Association (ALPA), the two carriers — Caribbean Airlines and Fly Jamaica — are not entitled to serve a route between the U.S. and Guyana because they are based in third countries — Trinidad & Tobago and Jamaica, respectively.
Initially, Delta had claimed that the route was unprofitable, a statement that was disputed by the Government. The Georgetown/New York route is the busiest from Guyana.
Last year, two low-cost airline- Redjet and EZjet folded- leaving only CAL and Delta to ply that route. In February, Delta announced that it was pulling out in May, leaving only the Trinidad-owned CAL. This was after almost five years in Guyana. The announcement had taken Guyana by surprise.
The Government, to entice CAL to keep its fares down, has granted the airline flag-carrier status which would have allowed it to fly directly between Guyana and the US.
Fly Jamaica, partly owned by Guyanese pilot Ronald Reece, and based in Jamaica, has also applied to the US to fly the route.
The applications are being considered by the US Department of Transportation (DOT).
According to a Travel Weekly report, at issue is a pending application by CAL to drop the unprofitable short segment of its Trinidad-Georgetown-New York route and operate strictly between the U.S. and Guyana.
Airlines for America said in a legal pleading that the two applications raise “serious and troubling issues for consumers” and for the industry, which traditionally takes a bilateral approach to international routes. That means the traffic right between Country A and Country B is generally reserved for the airlines of those countries rather than carriers from third countries.
Airlines for America said Caribbean Airlines’ third-country operations are responsible for “forcing the cancellation” of Delta’s Guyana service and added that so-called “doing business issues” such as fuel subsidies from Trinidad & Tobago and “excessive taxes” in some countries make it difficult for U.S. carriers to compete.
In such an environment, A4A said the Transportation Department should be working on “clearing away” these impediments rather than granting special favours to the region’s carriers.
In the same vein, ALPA said neither of the Caribbean carriers “can point to any compelling U.S. public interest that would be served” by their proposed operations, especially since “a U.S. carrier has just surrendered its service in the market.”
Guyana would be badly affected if the DOT refused to allow CAL and Fly Jamaica to operate the route.
Currently, with the presence of only CAL, there have been concerns with passengers complaining about high air fares out of the country.
Government officials are set to meet with CAL’s executives today.

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