Air Services explains hinterland flight prices

Apr 20, 2020 News

Captain Emil Jahan

Domestic operator, Air Services Limited (ASL) has refuted claims of hike in prices for flights to Regions 7 and 8.
This comes as a result of several reports in sections of the media and social platforms.
In a statement made by the operator, on its social media page, the company said: “There has been several reports circulating on social media and some sections of the media that all of the prices for ASL’s weekly scheduled regional flight services to Region 7 and 8 have increased, however, this is not true.”
The company explained that contrary to the reports, it has put measures in place to assist customers in those regions.
This includes waiving all passengers’ cancellation and date change fees and increased the allowable free baggage weight for all passengers traveling on the scheduled regional flights.
Some charters and shuttle prices have been substantially reduced, and the price per pound for freight on regional flights from Georgetown remains unchanged.
Also, during this time of crisis, ASL said it is providing free tickets for certified sick passengers who are in urgent need to travel to Georgetown for medical reasons.
The company expressed deep concerns over the recent press release by the Guyana Civil Aviation Authority (GCAA) as labeling some air operators as unscrupulous.
In fact, details were provided to the regulator recently.

GCAA Director-General, Lt. Col. (Ret’d) Egbert Field, A.A

According to ASL, such description has the potential to tarnish the credibility of businesses operating in the Aviation Sector.
As a result of the pandemic, ASL insisted that it is committed to continue safely operating sustainably.
According to a press release from the GCAA over the weekend, “the Government’s removal of the Value Added Tax (VAT) on domestic travel until June 30, 2020 and the significant reduction in fuel price should negate any increase in the cost of domestic air travel.”
Responding to this statement, ASL said, “Even though VAT was temporarily removed from all domestic air transport by GRA (Guyana Revenue Authority) for the next three months, this has no impact on prices for the majority of hinterland communities because those locations were already exempted from VAT.”
One good example the company used to illustrate its argument is that in Region 8,-Karisparu, Orinduik, Itabac and Chiung- were affected by the GCAA Directive, which suspended passengers’ movement among other communities.

ASL’s Cessna 172

Those locations form as part of a strategic route air operators use in serving the region because they connect to many satellite villages.
Many of those areas were already VAT-exempted.
Mahdia, Kaieteur, Karisparu along with Itabac were recently added to the VAT exemption list, but amongst them only Mahdia and Kaieteur would benefit from VAT exemption immediately.
“VAT remains in place for aviation fuel which accounts for a significant portion of operating costs; and on Aerial Agricultural Application service (crop dusting service) which the company’s sister company AG Air Inc provides to rice farmers.”
Also taking into consideration that fuel prices were reduced, ASL’s Captain Emil Jahan, a spokesman, explained to this publication that while “aviation fuel prices went down, what must be considered is that fuel suppliers had a large batch of high priced fuel in their stockpile prior to the slump in oil prices, and therefore, until that batch in the stockpile is run down and replenish with lower priced product, then only the benefits of low fuel prices will impact ticket prices.”
He added that since the borders have been closed to scheduled international flights and there is an almost 30% drop in domestic air travel there is a drastic decrease in aviation fuel consumption in Guyana. There is a high volume of aviation fuel in stockpile, which was sourced at high prices in the system.
All of these factors and other market forces attached to operating at 50% aircraft capacity have caused ticket prices to temporarily go up on the regional flight services.
However, what one must consider is that some of the spike in prices are temporary and once things stabilize, prices will further go down.

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