Dear Editor,
The recent opening up of the aviation sector in Guyana has led to enormous benefits to the nation as well as to passengers – an increase in airlines coming to Guyana resulting in an increase in revenues to the government, reduced fares to passengers, and a boost to tourism. Readers would recall the government’s past effort to protect the state airline, Guyana Airways, which suffered enormous losses and was sold in 1999. For decades, competitors were not allowed in the market and Guyanese became exasperated by lousy service and high prices from an airline that had poor management and that eventually went bankrupt. It was bad government policy to protect poor service. The government woke up from its failed policy last year and freed up the aviation sector. Free market is the right decision for the airline industry. Whereas before December there were only two carriers, today there are four carriers and two more are trying to enter the market by late March in time for cricket and the busy Easter season.
Congrats are in order for those airlines that recently began service to Guyana. Travel Span should be applauded for taking advantage of the government’s liberalization policy by beginning scheduled service from N.Y last November.
Another carrier has successfully followed suit with charter operations. The airlines as well as passengers have benefited from the opening up of and increased competition in the airline sector. There is a dramatic reduction in fares, better service as well as an expansion of service.
With the service of Travel Span and others, there has been an increase in arrivals compared to last year for the corresponding period and with that the concomitant increase in spending of money by overseas-based Guyanese who visited their homeland. This has contributed to job creation and higher growth rates. The government also benefits with an increase in the collection of departure taxes from passengers.
Today, passengers benefit with lower fares, more seats, and a choice of carriers from the air competition. As an example, after Xmas one airline was charging $200 round trip plus taxes. This was matched by another carrier and two other carriers followed suit by sharply reducing their fares. So competition works. But those of us who study the aviation industry know that $200 and $300 fares are impractical today; airlines are bound to lose money at those low fares. But to fill their aircraft and reduce losses and or to stay competitive, airlines engage in “predatory faring” hoping to drive low cost competitors out of the market. Once this is achieved, they can use their monopoly power to raise fares to recover money lost during an earlier period. Airlines would like to eliminate competition to corner the market. This will not be good for Guyana. It is in the interest of Guyanese to maximize the number of carriers that ply the route.
Travel Span should be applauded for initiating their new scheduled service. Since the terrorist events of 9/11, airlines have faced enormous problems with security and rising fuel costs and losing a lot of money.
Running an airline is a risky proposition. Those carriers that enter the Guyana market are performing a yeoman service. Guyana is a seasonal market meaning people fly mostly during holidays and the airlines suffer heavy losses during the off peak periods. Revenues collected don’t match the enormous expenses.
Guyana also poses serious drug risks; carriers have suffered enormous fines from the FAA in the recent past. There is also a risk with people seeking to smuggle illegal immigrants into the U.S. .
In spite of the risks and losses, Travel Span and others carry on with operations and Guyana benefits. More people go home and more money is spent. It is estimated that every passenger to Guyana spends an average of U.S $1200 in the country. So the economy is flooded with foreign currency. Jobs are created – Travel Span and the other carriers employ a lot of people to run their operations and there is a spin off from visitors spending money.
Since the country benefits from the operation of Travel Span and other carriers, the government should consider assisting against risks as other governments do with their carriers. Travel Span, in particular, as a Guyana carrier, should receive encouragement from the government to expand operations. The management of Travel Span has fifteen years experience operating flights and passengers say it offers a reliable service.
The government and passengers should show their appreciation to the airline for filling a void since the collapse of Universal in August 2005 by offering various incentives (tax breaks, decreased landing fees, discounts on fuel, etc.) to encourage the carrier to increase flights and to expand operations to Toronto and Florida.
Yours faithfully,
Vishnu Bisram
