Domestic airfares driven by actual costs of fuel, maintenance, insurance, skilled personnel – operators

See full statement from the Aviation Operators Association of Guyana:

The domestic aviation operators of Guyana have recognized the concern expressed by His Excellency the President, Dr. Mohamed Irfaan Ali, with regard to the cost of hinterland air transportation.

In accordance with those concerns, we have reviewed these costs, which, we have shared over the past several months in numerous and constructive meetings with the Government. These meetings have included discussions with the Honourable Ministers responsible for Finance and Aviation. During those meetings, the industry’s cost structure was examined in considerable detail.

The domestic aviation industry has always regarded itself as a partner in Guyana’s national development. We remain committed to working collaboratively with the Government to ensure that the people of Guyana continue to benefit from safe, reliable, affordable, and sustainable air transportation.

Our airlines have spent decades investing in aircraft, infrastructure, training, employment, and safety. Modern aircraft suitable for Guyana’s operations are expensive. For instance, the capital repayment for a Cessna Caravan is over US$40,000 per month or about US$700 per flight hour and these costs are regardless of whether the aircraft is parked or flying. A Technam P2012 Traveler costs approximately US$3.2 million while a Cessna Caravan costs approximately US$3.8 million, and the HAL 228 approximately US$10 million.

Aviation insurance premiums are generally some 300% higher in Guyana than for comparable operations in the United States and are amongst the highest in the Caribbean region. This is because insurance companies assess Guyana as a high operational risk, flying in conditions of remote aerodromes, a tropical environment, limited emergency infrastructure and landing and take off in short unpaved runways. Insurance is, of course, mandatory.

We acknowledge and appreciate the Governments substantial investment in continuously upgrading hinterland aerodromes across Guyana which have significantly improved safety, reliability and operational efficiency. Nevertheless, our aircraft must still operate on laterite runways and gravel strips in the remote mining and village aerodromes, requiring higher maintenance costs than, for instance, operating in the Caribbean and the USA.

We have demonstrated to the government that domestic airfares are driven by the actual costs of providing safe and reliable air transportation, including aviation fuel, aircraft maintenance, spare parts, insurance, financing, regulatory compliance, and the cost of skilled personnel.

We wish to point out that the domestic aviation market is 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.

The comparison between the prices charged by the domestic aviation operators for similar journeys in the Caribbean clearly show that our prices are below those charged in the Caribbean and show that our domestic operators are not profiteering. It is important to recognize, too, that our domestic operators fly in vastly more challenging conditions than those in the Caribbean.

The domestic aviation sector remains committed to finding practical solutions that reduce transportation costs without undermining the safety and long-term sustainability of the industry.

We also remain willing to participate in an independent review of the economics of domestic aviation so that future policy decisions can be guided by objective data and a shared understanding of the industry’s operating realities.

In our meetings with the Government, we have suggested that the Government consider a targeted transportation assistance programme, such as a voucher system to support:

*Schoolchildren
*Medical referrals
*Pensioners
*Low-income residents of hinterland communities.

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.