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US denies CAL, Fly Jamaica requests to fly direct GT/NY route
The US Government has denied applications by Caribbean Airlines Limited (CAL) and Fly Jamaica Limited to conduct direct flights between Georgetown and New York.
Fly Jamaica and Caribbean Airlines have been denied permission
to operate direct flights between Guyana and the US.
The US Department of Transportation (DOT) in an order made Monday denying the two airlines, said that both companies failed to justify that the operations would serve the public good, one of the criteria used in assessing applications.
With a large number of Guyanese living in the US, Guyana had badly wanted the direct flights. Currently, CAL has to pass through Trinidad, while Fly Jamaica, partially owned by Guyanese pilot Ronald Reece has to in-transit in Jamaica.
Guyana is one of more profitable routes for CAL, which is owned by the Trinidad Government.
Air fares have been climbing in recent months, forcing Government to summon CAL to explain.
The ruling by US would be a hard blow for the airlines, especially Fly Jamaica, which started flights to Guyana last week. However, the airline has to fly from New York to Guyana to Jamaica.
In July, the US airline industry and its largest pilots’ union, on behalf of Delta and other carriers, moved to block the two airlines in their application to the DOT, claiming unfair competition, including fuel subsidies from CAL, among the reasons.
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 and Tobago and Jamaica, respectively.
Airlines for America, in its filings, argued 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 and 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.”
According to the US decision Monday, the DOT has historically viewed such requests as extraordinary and has granted such authority only when the circumstances presented on the record in individual cases show compelling public interest considerations.
Among other things, the applicant will have to show a need for the service; that there would be a negligible impact on U.S. flag carriers, and the proposed operation is limited in scope.
“Against that background, we have reviewed the applications of CAL and Fly Jamaica and determined that we cannot make the necessary public interest finding.”
Regarding concerns of ALPA and A4A that fuel subsidies to CAL; the US authority said it has been advised through diplomatic channels that these subsidies have already ceased “or will soon cease. We will continue to monitor this situation.
There is nothing to stop CAL from continuing its current services over Port of Spain-Georgetown-New York and Georgetown-Port of Spain-New York routings, nor will this action preclude Fly Jamaica from continuing its Georgetown-Kingston-New York services.”
Last year, two low-cost airlines- 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 later granted the airline flag-carrier status.
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