Regional aviation sectors may improve as Caribbean Airlines subsidy ends

PARAMARIBO, Suriname -- The recent announcement that, from October, Caribbean Airlines (CAL) will no longer receive a Trinidad and Tobago government fuel subsidy -- if it is indeed true and not a hoax as some observers have suggested -- may benefit the Guyana and Suriname aviation sectors in particular.

CAL’s monopoly over Guyana’s skies has allegedly kept other airlines from entering the Guyana market and state-owned Surinam Airways (SLM) has often complained about CAL’s fuel subsidy as unfair competition.

In what may or may not be a related coincidence, just after the announcement of the removal of CAL’s fuel subsidy, SLM and the government of Suriname are now discussing a US$200 million modernization and expansion plan for the state-owned airline.

The government is fast forwarding the transportation sector and that’s good news for SLM. The government of Suriname envisions a new-look Surinam Airways transporting tourists and business people, in addition to the ethnic market, as the local tourism sector takes off and the economy continues to grow.

SLM’s plans to fly to JFK New York, via Georgetown, Guyana, are also progressing and it is expected that that could happen by year end, according to SLM officials. In addition, SLM will soon increase its frequently on the Georgetown /Miami route from two to three weekly flights.

The Suriname carrier, which has been in existence for over 50 years, also plans to expand into northern Brazil, and the Caribbean. There are also discussions to connect Guyana and Suriname with neighbouring cities in Brazil, Colombia and Venezuela, especially that Georgetown and Paramaribo are seeking continental integration with South America now that they are members of UNASUR and MERCOSUR.

SLM is already transporting people from the Far East, Europe, Miami and the Caribbean through its Paramaribo hub to Guyana and French Guiana. Many French Guianese use SLM to fly to the Caribbean, Miami and Belem. Flying out of Cayenne with Air France and Air Caraibes is very expensive and many French Guianese use Suriname’s Johan Pengel International Airport. With planned modernization, which may bring reliability, expansion of routes, newer aircraft, and better service, passengers will have more options.

A development that made news a few days ago was JetBlue’s announcement that it will commence operation to Port of Spain, Trinidad, in July 2014. This could very well be related to the removal of CAL’s fuel subsidy. At the same time, it could be a trade off; CAL wants to add more non-stop flights between Guyana and JFK and eliminate the Port of Spain stopover. A lobby group, Airline Pilots Association (APLA), representing some US airlines, has filed a complaint with the US Department of Transportation (DOT) opposing CAL’s application to add more non-stop flights between JFK and Guyana.

APLA also opposed Fly Jamaica’s request to commence non-stop flights between JFK and Guyana since Fly Jamaica is not a Guyana carrier. As it is a legitimate challenge, in late September Fly Jamaica will begin service to Guyana from JFK via Kingston, Jamaica, while it awaits a response from the DOT. However, Fly Jamaica has secured Canada’s approval for non-stop flights to Guyana. And with the removal of CAL fuel subsidy, there may be some horse-trading in the making.

Guyana and Suriname have both been investing a lot of money to modernize their airports. Guyana is spending about US$150 million to build a new terminal and extend the runway at the Cheddi Jagan International Airport to accommodate larger aircraft, while Paramaribo’s Johan Pengel Airport is undergoing an additional $70 million modernization to make that airport a regional hub.

Guyana, however, is still plagued by the constant smuggling of drugs on international flights originating from that country, which airline insiders say is one of the main reasons keeping airlines from adding Georgetown to their network. As well, the high cost of aviation fuel at the Cheddi Jagan International Airport is also an obstacle to attracting reputable airlines to Guyana.

Original Article:   http://www.caribbeannewsnow.com