Too many airline operators on GT/NY route?
Danger in flooding the market is not one to be ignored- President
By Abena Rockcliffe
The possibility exists that Guyana will soon review its open skies policy. President Donald Ramotar has acknowledged that there is a danger in flooding the air travel market. He added that that danger will not be ignored.
Open skies is an international policy concept that calls for the liberalization of the rules and regulations of the international aviation industry—especially commercial aviation—in order to create a free-market environment for the airline industry.
Airline owners who serve the local market have been complaining about the number of carriers entering the market to fly the same route—Cheddi Jagan International Airport (CJIA) to John F Kennedy (JFK) airport in New York. There are four airlines that fly the CJIA-JFK route and another is on the way.
Guyana has a small market that has had numerous setbacks due to airline failures. Civil Aviation Director General, Zulfikar Mohamed, explained that there is nothing to stop Guyana from flooding the market.
About two weeks ago, following concerns expressed about the market flood, President Donald Ramotar met with some aircraft operators.
During a press conference he hosted at State House, yesterday, Ramotar was asked about the concerns raised by aircraft operators who met with him.
The Head of State did not mention the concerns raised but said that Guyana’s open skies policy is what allows for such a situation to exist.
He said that people usually have much to say about allowing competition “but when they get competition they complain.”
The President said that the number of carriers now on the market had successfully addressed the problem of fares being too high.
The Head of State however said that the “danger” which comes as a result having too many carriers on the market is not one to be ignored. “We don’t want to over saturate the market.”
The JFK/Guyana route cannot sustain five airlines—Caribbean Airlines, Travel Span, Fly Jamaica, Dynamic and Copa which is scheduled to come on-stream soon.
The President suggested that the market may regularize itself as competition will force innovation. “This forces the airline to be more creative and go other routes maybe go south.”
Experts say that open skies is a good policy for large passenger movements in bigger economies that can sustain multiple carriers.
It is a consensus that competition is good for any economy, “but too many seats chasing after too few passengers will result in failures and market contraction,” said one stakeholder.
In 2007/2008 there were four carriers Caribbean Airline, North American Airline, TravelSpan, and Constellation. North American Airlines and TravelSpan pulled put due to heavy losses and Constellation failed.
Travel Span returned to the local scene last December.
Operators are saying that there are bound to be failures or airlines taking exit strategy, which has become a pattern. “Undoubtedly there will be short term gain with low prices, but rest assured there is a long set back and damage to passenger growth.”
It is being said that government should continue to encourage airlines to operate routes that are in need of developments, but not those that are being effectively serve such as JFK to Guyana.
Copa is set to come on stream this July. The Panama-based airline will begin operations with flights twice weekly, on Tuesdays and Fridays, to Panama City, Panama, and passengers would have the leisure of booking connecting flights to a number of other destinations such as Montreal, Canada, Fort Lauderdale, Florida and New York.