Aviation fuel dispute… ASL in legal tussle with Ogle Airport Inc.
– calls for Commission of Inquiry
By Leonard Gildarie
A local charter company has called for a Commission of Inquiry of the Ogle Airport following a gate-ramming incident there last week.
Air Services Limited (ASL) also accused the current management of the Ogle Airport Inc. (OAI) of running a “monopolistic” family affair, and asserted that government and the Private Sector Commission should demand representatives to sit on the board, to ensure a level playing field.
On Thursday, last, ASL’s Managing Director, Captain Mazahar Ally, reportedly used a fuel truck to break open the gate of the airport after security locked it to prevent the vehicle from entering.
The airport management insists that ASL does not have permission to purchase fuel other than from a supplier right at the location.
ASL, on the other hand, says that it can save around $500,000 for every purchase or $15M monthly, if it imports the fuel itself. It accused the airport of getting worried because a company that has links with a board member will lose out on $80M in fuel purchases monthly, and says that no regulations prevent the purchase of fuel elsewhere, at a cheaper cost.
Legal proceedings have commenced to address the present unfair situation under the “Competition and Fair Trading Act”, the company said yesterday.
Last Thursday, as matters got heated, the airport ordered security not to allow any tankers belonging to ASL to enter the compound. ASL says it is the largest private aircraft company, operating 19 small planes in Guyana, and higher fuel prices would have resulted in customers feeling the brunt of it.
During a press conference yesterday at their offices at OAI, ASL’s Operations Manager, Annette Arjoon-Martins, made it clear that the company is trying its best to survive, despite being systematically strong-armed in its developmental plans. She also hinted that the gate incident was tantamount to the frustration of being locked out of the home by strangers.
“We are not here to sling mud or to deliver innuendo. We haven’t done so before; we’re not doing it now. All we are here to do is to provide you with the chain of events creating the present fuel controversy that has engulfed Air Services Limited at the Ogle Aerodrome.”
Stressing that the gate incident stems from a “continuum of unlawful policies by OAI to frustrate the expansion of ASL at the aerodrome”, the charter company spoke of many confrontations, including recently, over its application for land to facilitate its expansion.
“This latest one revolves around ASL’s right to purchase its own certified fuel independently which enables it to control its own fuel. For several years, ASL has been purchasing all its fuel from Caribbean Aviation Management Services Limited (CAMSL) which is owned by the Correia Group of Companies and is a sister company to Trans Guyana Airways which is ASL’s competitor.”
With the recent price increases and the fact that ASL purchased GY$82,825,311.77 in fuel from CAMSL in July 2011, the company said it encouraged CAMSL to sell their fuel to ASL at more realistic prices, but the fuel handling company refused to fix their prices in keeping with existing lower prices nationally, as the same jet fuel is sold at RUBIS Timehri for GY$323 less per gallon.
“Consequently, as nothing prevents a company from handling its own fuel supply, ASL then decided to import its own fuel on a trial basis, at a saving of G$400 per gallon. Using International Safety Organisation (ISO) containers, standard in the industry; the fuel is imported and transported in ASL fuel tankers which are approved by both OAI and CAMSL to handle fuel and have met all the insurance requirements.”
ASL insisted that it does not resell the fuel and has permission from the relevant agencies including the Ministry of Trade.
ASL also said that CAMSL management had issued instructions to cease sale of fuel to ASL immediately on Friday following the incident the night before.
“This was only rectified later in the day due to ASL contacting Mr Hutson Innis of RUBIS Barbados, the Ogle fuel supplier, and advising him that his agent (CAMSL), had refused to sell aviation fuel to its largest customer at Ogle, and that action would have been taken with the relevant authorities if it was not resolved.”
According to Arjoon-Martins, if ASL continues to purchase fuel from its competitor amidst the rising fuel costs, there will be more expensive airfares to the Guyanese residents, particularly in the remote and largely un-served locations.
“The emerging tourism industry will also be hard-hit, since its success rests largely on affordable airfares to the country’s natural attractions.”
Making its arguments for government’s involvement, ASL explained that the Ogle Airport development came into being as a government/private sector partnership, with over 400 acres of government land being leased to the aviation companies at Ogle for the sole purpose of the development of the aviation industry.
ASL pointed out that despite its being the largest operator at OAI it was, through internal manoeuvring, ejected from the board last year. It was emphasised that three members of a family now sit on that board.
“…as a result of a clear strategy to undermine the original concept of fair and equitable representation of the major aviation stakeholders, the present board of OAI is heavily skewed in favour of and by its domination from mainly one aviation company and its sister companies…”
“Mr Michael Correia who heads the Correia Group of Companies which owns CAMSL Correia Mining Company and Trans Guyana Airways which is the main competitor of ASL, is also the Chairman of the OAI which sets policy for the development at Ogle. This is a clear conflict of interest as a competitor is now exercising regulatory authority which is unacceptable, as Ogle is now being run as a private company, even though it is a public utility.”
Also at the press conference yesterday were ASL’s Chairman, Yacoob Ally, Safety Manager, Fazel Khan, and Adepemo Peters, Chief Security Officer.
The gate was still unable to be locked yesterday because of the damage.