Air Services Limited faces temporary shut down

Oct 01, 2013 News

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….as RUBIS suspends fuel supply to Ogle

One of Guyana’s leading local aviation providers, Air Services Limited (ASL), is facing a possible halt to its services following the immediate suspension of fuel supply to the Ogle Airport by major fuel supplier, RUBIS.
The fuel company stopped the supply of fuel after it discovered that the fuel it supplied to its into-plane provider at Ogle, Caribbean Aviation and Maintenance Services (CAMS) was comingled with other fuel that was sourced from another provider.
“We are suspending supply at Ogle with immediate effect until we are able to verify the integrity of the comingled fuel,” Rubis informed ASL in a letter yesterday.

“In the meantime we can offer supplies at the Cheddi Jagan International Airport. Please let me know if you wish to accept this as an alternative,” the RUBIS correspondence added.
At a hastily arranged press conference yesterday, ASL, through its General Manager Annette Arjoon-Martins, informed that its operations may be grounded indefinitely as a result of the development, since it will not be feasible to source fuel from Timehri for its fleet at Ogle.
“This development is the result of a dispute between RUBIS and CAMS. It has nothing to do with Air Services, but it obviously means our aircraft cannot get fuel from RUBIS and could be grounded until the dispute with CAMS is resolved.
As it is, ASL only has enough fuel to carry it through today and the first flights tomorrow.
It means that ASL will now have to ration its supply to accommodate its schedule.
“We do not want to interrupt our schedules and of course we will have to balance our charters too because those are our big customers,” the ASL General Manager explained.
While since 2011, ASL has developed its own state-of-the art fuel farm to supply its large fleet of aircraft at a competitive cost, it is still forced to go through CAMS to source fuel from RUBIS.
CAMS is owned and operated by the Correia Group of Companies, a competitor, which holds the monopoly on the supply of fuel to all other airlines operating from the Ogle Airport.
However, ASL secured a deal to have RUBIS supply its fuel but this is done through the tanks controlled by CAMS.
According to Arjoon-Martins, this places ASL at a disadvantage, since the Ogle Airport management is allowing CAMS to maintain a monopoly on the supply of fuel at the airport, by not permitting ASL to operate its own US$1M fuel farm.
“They keep shifting the goal posts on us,” Arjoon-Martins declared.
A few years ago ASL and the Ogle Airport management were locked in a bitter dispute over the supply of fuel when CAMS objected to ASL tankers bringing fuel into the airport.
The ASL General Manager informed that following RUBIS’s notice of interruption, CAMS wrote to her company indicating that it can supply ASL with fuel.
But on this point Arjoon-Martins said that “Air Services would be reluctant to re-engage with CAMS.”
From all indications, ASL prefers to wait out the crisis rather than purchase fuel from CAMS.
“In the past their prices were exorbitant, were continuously rising and they were never open to negotiation despite collective lobbying by ASL, Wings Aviation and Roraima Airways at that time.
Additionally, and more importantly, they also interrupted our fuel supply in August 2011,” Arjoon-Martins explained.
“We do not want to go back to the same company that cut off our fuel supply in 2011. That is the whole reason while we had our fuel farm investment in the first place, to become independent of having any supplier hold us to ransom,” she added.
Following the RUBIS move to suspend fuel supply, the situation at Ogle, according to Arjoon-Martins, could reach crisis stage.
“With a fleet of 21 aircraft serving every single corner of Guyana every single day, you could do the Maths and understand what that means to us,” Arjoon-Martins said.
Normally ASL services 70 locations in Guyana, using $20M in fuel per week.
With the possibility of a temporary shutdown of its operations, the mining sector as well as other commercial ventures that rely on the service will be severely affected.
“I consider this an emergency situation.  We serve all the regions of Guyana, including some of the big industries and we simply cannot entertain the thought of having to suspend operations much less to ground it,” Arjoon-Martins said.
She said that the development is a “perfect example of the hurdles for any aviation company who is at the mercy of a sole supplier of aviation fuel.”
“This is a national crisis as far as I’m concerned and I see no doubt why the powers that be will not also see that because of course air services contributes tremendously to national development and what I would want is for us to have a fast track mechanism to have our fuel farm operationalised and remove some of these unrealistic request, which in my opinion are being asked to delay our operation even further.”
Apart from the local commercial flights, the ASL Flight School will also be affected since the training aircrafts will also be grounded for the want of fuel.
She expressed optimism though, that in the interest of national development, the policy makers will intervene and end the monopoly on the supply of fuel at Ogle.
It is not to clear if the recent developments has had an impact on the operations of LIAT, but according to sources at Ogle, the regional airline did not land at the airport yesterday.
“They normally have a flight everyday but they did not come today (yesterday),” a source told Kaieteur News.

 

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