Latest update March 24th, 2025 7:05 AM
American Airlines tickets and ExxonMobil… Cost oil must reflect competitiveness – Jagdeo
By Abena Rockcliffe-Campbell
Should there be a change in Government, Guyana would not willingly pay for the charges incurred by ExxonMobil for the use of American Airlines services. This is as it relates to instances where that airline charges several times the fare of other airlines for the same service.
That is the position of the People’s Progressive Party/Civic Opposition as articulated by its leader, Bharrat Jagdeo.
Jagdeo made his party’s position known as he responded to questions yesterday at the weekly press conference held at his Church Street Office.
Jagdeo told the media that “every cent” that the Government of Guyana has to pay, in the cost oil mechanism, must be for services that have been competitively procured.
He said that that is the principle that should be followed by every Government and is definitely the principle that will be held and followed by a People’s Progressive Party/Civic Government.
Jagdeo stressed, “There should not be preferences for individuals or companies.”
The former President acknowledged that there may very well be cases where the principle of competitiveness may have to be set aside.
Opposition Leader, Bharrat Jagdeo
He said, “There may be occasions where you might not be able to look at competitiveness alone because it may be something of a technical nature, with a specific technology or so. I am talking about if you have to get a company to build an FPSO (Floating Production, Storage and Offloading unit) ; you cannot just give it to anybody because that is a very technical job.”
However, Jagdeo said that the same cannot, by a stretch of an imagination, be applied to airline use.
Jagdeo said that something as basic as air transport “to move people from one destination to another, such services must be competitively procured.”
Last November, 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 certain American Airlines tickets are as astronomical as they can get.
And the reason is, American Airlines is 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. 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.
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