Stop Exxon’s use of American Airlines exorbitant airfares - Ram

Stop Exxon’s use of American Airlines exorbitant airfares – Ram

Feb 04, 2019 News

Guyana should not allow ExxonMobil and any of its subcontractors for that matter, to continue using the exorbitant travelling rates of American Airlines.
In fact, the authorities need to disallow this ruthless practice during its cost audits because it is Guyana that will have to pay for these airfare expenses at the end of the day.
This viewpoint was proffered by Chartered Accountant, Chris Ram during an exclusive interview with Kaieteur News last night.

Chartered Accountant,
Chris Ram

His comments come in wake of an article carried by this publication yesterday with the headline, “ExxonMobil’s exploration…. Guyana is paying for American Airlines presence here.”
Ram said, “It is clear that the contractor (ExxonMobil) should not be using American Airlines. They must be made to use the most reasonable fares available and if the contractor insists on using the exorbitant rates, then we should disallow them from doing this in our cost oil audits. That is the assertive supervision we need to exercise when the contractor gets ready to claim for expenses.
“But I have another issue, in grating American Airlines permission to use the Guyana route, was any enquiry made about what their level of charges is going to be? It is not because the word American is in their name that we must say ‘Oh great! American Airlines is coming to Guyana.’ If they are simply coming to take advantage of a weak negotiating position that Guyana displayed during the signing of its contract with Exxon and to do exorbitant pricing against Guyanese travellers then that is clearly unacceptable.”
The tax advisor added, “At some point we have to start standing up to people who are treating us like we are just a backward third world country. But surely the person responsible must call on the oil contractors and say to them that this is unacceptable and we would not allow them to use airlines with such exorbitant charges because they are just going to turn around and try to claim for it.”
Kaieteur News also spoke with a representative of the airline industry in Barbados on this matter. The official indicated that the exorbitant prices being charged by American airlines for their business class tickets by far exceeds a first class ticket to China from Barbados and even to the UK from Barbados.
This newspaper also understands that Spirit and United Airlines have an interest in venturing into Guyana’s aviation industry, but it is yet to be confirmed if they have been granted permission by the local authorities.
It was last year November that US aviation giant, American Airlines, started flights between Guyana and the US, adding the important Miami to Timehri route.
It was widely thought at the time that the coming of flights from one of the biggest airlines in the world would help to bring prices down.
However, the presence of American Airlines has done everything but help to drive prices down.
From all indications, the prices of American Airlines tickets are as astronomical as they can get.
And the reason is American Airlines are targeting mainly employees and others related to the oil exploration operations currently ongoing in Guyana.
Guyana as part of its oil profit-sharing arrangement with ExxonMobil for the Stabroek Block is responsible for all oil exploration expenses including those for travel and accommodation. The travel expenses include the cost of air tickets for the staff of the oil companies.
American Airlines has perhaps the highest ticket prices for travel between Guyana and Miami. In some cases, the cost of a one-way ticket is as much as seven times higher than the cost of tickets to the same destination on other air carriers.
For example, a business class round trip flight to Miami via Caribbean Airlines between February 6 and March 6 cost approximately US$800 on other airlines plying the same route. On American Airlines, the same ticket would cost US$6,059.
Caribbean Airline Economy round trip ticket to the same destination on the same date is US$474.
For American Airlines the cost is US$3,179.
The ExxonMobil staff is flown home every 28 days on rotation. Reportedly, American Airlines, which uses an Airbus 319 aircraft with 130 seats, is the main carrier for the oil companies operating in Guyana. Local company Roraima Airways is handling the ground operations on behalf of AA.
Last Monday, the price for a one-way economy class ticket from Guyana to Miami from Caribbean Airlines, was US$295. Whereas, the price for the same ticket from Suriname Airways on the same route was US$285.
For American Airlines, it was more than double at US$731. Guyana was handed a pre-2015 exploration bill of more than US$800M by ExxonMobil. Later this year, it will be handed another bill for post-oil cost. Those costs include hotel accommodation, air travels, and other miscellaneous expenses.