The Aviation Operators’ Association of Guyana Inc (AOAG) today denied that domestic carriers were profiteering from hinterland travel and proposed a government-funded voucher programme for vulnerable passengers.
Its statement followed renewed concerns by President Irfaan Ali about domestic airfares and their effect on the cost of living in hinterland communities.
According to media reports, Ali told residents during an outreach at Santa Rosa in the Moruca sub-district last week that he was disappointed that the government’s investments in aviation infrastructure had not resulted in sufficiently lower fares.
“We are very disappointed in the aviation sector because we have not been able to get the corresponding returns on the investment that we are making in prices,” the President was quoted as saying.
Ali said transportation costs were contributing to the higher prices paid for chicken, beef and other necessities in riverine and hinterland communities. He proposed establishing a community-operated cargo service between Charity and Moruca to transport food and other goods at more affordable rates.
The issue also has relevance to the MV Barima ferry disaster as critics have said that air fares have consigned the poorer classes to travelling under harsh circumstances on the sea.
Responding to the President’s concerns, the AOAG said domestic operators had reviewed their expenses and presented detailed information on the industry’s cost structure during several meetings with the government. These discussions, it said, included ministers responsible for finance and aviation.
“We have demonstrated to the government that domestic airfares are driven by the actual costs of providing safe and reliable air transportation,” the association said.
It identified fuel, aircraft maintenance, spare parts, insurance, financing, regulatory compliance and skilled personnel among the principal expenses borne by carriers.
According to the AOAG, the capital repayment on a Cessna Caravan exceeds US$40,000 per month, equivalent to approximately US$700 per flight hour. It said these payments continued whether the aircraft was operating or parked.
The association said a Tecnam P2012 Traveller costs approximately US$3.2 million, a Cessna Caravan around US$3.8 million and a HAL 228 approximately US$10 million.
It also said aviation insurance premiums in Guyana were generally about 300% higher than those for comparable operations in the United States and among the highest in the Caribbean.
The AOAG attributed the premiums to insurers’ assessment of Guyana as a high-risk operational environment because of its remote aerodromes, tropical conditions, limited emergency infrastructure and short, unpaved runways.
“Insurance is, of course, mandatory,” it added.
The association acknowledged the government’s substantial investment in upgrading hinterland aerodromes, saying the improvements had enhanced safety, reliability and operational efficiency.
It maintained, however, that aircraft continued to operate from laterite and gravel strips at remote mining and village locations, resulting in higher maintenance expenses than those incurred in the Caribbean and the United States.
The AOAG said the domestic aviation market was highly competitive, with several private operators competing daily for passengers and cargo.
“As a result, there is little difference between the prices of the competing airlines,” it said.
It contended that comparisons with similar Caribbean journeys showed that Guyanese domestic airlines charged lower fares despite operating in more challenging conditions.
“Our domestic operators are not profiteering,” the association declared.
The AOAG said it was prepared to participate in an independent examination of the economics of domestic aviation so that future policies could be informed by objective data.
It cautioned that measures intended to lower fares should not undermine safety or the industry’s long-term sustainability.
The association said it had proposed a targeted transportation-assistance programme involving vouchers for schoolchildren, pensioners, patients travelling on medical referrals and low-income hinterland residents.
“This approach would provide direct assistance to those who need it most while preserving competition, encouraging continued private investment, and maintaining safe, reliable air services throughout Guyana,” the AOAG said.
In January, the Department of Public Information reported that Ali had challenged airlines to reduce fares following the commissioning of the $799.7 million concrete airstrip at Paramakatoi.
The President said airlines had frequently identified poor airstrip conditions as a major contributor to their operating and maintenance expenses. With the improved runway, he argued, the resulting savings should be passed on to passengers.
“We are giving them enough time to adjust their cost,” Ali was quoted as saying. “Because we will not just sit by and not allow the benefit of these cost savings to be transferred to the people.”
DPI had said the government intended to monitor the situation to ensure that residents benefited from its investment in hinterland aviation infrastructure.
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