The operations of domestic air charter service Air Services Limited (ASL) could be grounded by tomorrow after its sole fuel dealer Rubis West Indies gave notice that it would be suspending its supplies to the Ogle International Airport (OAI) over the comingling of its product.
ASL General Manager Annette Arjoon-Martins last evening announced at a news conference that the company had started rationing its fuel stores but will most likely have to cease operation by tomorrow.
She said Rubis communicated that it discovered that its into-plane provider at Ogle Airport Caribbean Aviation Maintenance Services Ltd (CAMS) received jet fuel from another supplier and the product was comingled with Rubis’ product in the storage tanks at Ogle. As a result, Rubis indicated that it was suspending its supply to Ogle with immediate effect until it is able to verify the integrity of the comingled fuel.
All the fuelling operations at OAI are conducted by the CAMS and Rubis West Indies. CAMS, which owns and operates a fuel farm at Ogle Airport, is the authorised agent of Rubis West Indies, which is the authorised supplier of aviation fuel products to Ogle Airport.
Arjoon-Martins stated that while the dispute is with Rubis and CAMS, ASL will ultimately suffer because it relies solely on the dealer to supply its fuel.
She added that while the notification came at approximately 1 pm yesterday, another correspondence was received shortly after from CAMS, which offered to supply ASL with fuel until the investigation is completed. Arjoon-Martins stated that ASL would not be purchasing fuel from CAMS owing to the various issues in the past and the cost of fuel. She noted that Rubis did also give another option to refuel at the Cheddi Jagan International Airport, and ASL was looking at the feasibility of that and the economic ramifications.
“Air Services would be reluctant to re-engage with CAMS. In the past, their prices were exorbitant, were continuously rising and they were never open to negotiations despite collective lobbying by ASL, Wings Aviation and Roraima Airways,” Arjoon-Martins stated.
She added that CAMS had also disrupted its fuel supply in August 2011, which ultimately led ASL to develop its own fuel farm so it can fuel its own aircraft without depending on the CAMS “monopoly”.
Arjoon-Martins explained that the fuel shortage would impact all of ASL’s businesses and the company had to seriously look at its various contracts and how it would go about rescheduling already chartered flights and contracts.
Arjoon-Martins was not able to explain if Rubis would be suspending its fuel supply to CAMS or why the suspension to investigate the co-mingling would only affect ASL and not CAMS’s clients.
She stated that the situation was just another hurdle that was being faced by the largest aviation company currently working out of the OAI. ASL has 23 aircraft, including planes and helicopters. She said that after the notification was received, the company did an inventory of current fuel supplies and it was decided that fuel would last through today but would most likely finish by midday tomorrow. Arjoon-Martins stated that the situation was promoting a monopoly by making the only viable supplier of fuel CAMS.
She also revealed that ASL could spend up to $20 million a week on fuel currently and that Rubis would provide jet fuel at approximately $900 per gallon and Avgas for approximately $1,200 per gallon. Arjoon-Martins recalled that prior to ASL ceasing its purchase of fuel from CAMS in 2011, prices could be as high as $1,300 for Avgas and $1,200 for jet fuel. She said the cost of fuel, which is 40 per cent of all aviation cost, was reflective in ticket prices and ASL needed to find an alternative supplier to maintain prices in the past.
Although ASL completed its US$1 million state-of-the art fuel farm at the start of the year to essentially cut out a middle man and to keep fuel costs low, the facility is not yet operational as the company is yet to get permission from the Ogle Airport Incorporated Board of Directors to begin operations.
Arjoon-Martins stated that there have been various “shifting goal posts” as ASL sought to get the fuel farm operational, including issues regarding the need to acquire insurance, which she said may not be a regulation in the airport operations manual. She said that on Friday she would be better prepared to elaborate on those issues, including why ASL had not gone to the Competition Commission sooner and if there are currently legal issues being looked at.