GA2000 says it's not in crisis
TOP brass of Guyana Airways 2000 (GA2000) yesterday confirmed the airline was experiencing "difficult times" but claimed it was "not in crisis". Board Chairman, Mr Yesu Persaud acknowledged that Chief Executive Officer, Mr Anthony Mekdeci and Operations Manager, Mr Larry Singh are due to leave the company at the end of the month. He said they had indicated intentions of leaving before and Mekdeci will remain a consultant, while talks were continuing with Singh. The firm is looking for a new Chief Executive Officer, he said. Persaud dismissed reports that GA2000 lost some G$800M last year, saying the losses were "not even five per cent" of that figure. He confirmed board members recently met President Bharrat Jagdeo to raise a number of "operational issues", including linkages with BWIA and other airlines to overcome the problems. The Chronicle understands GA2000 had approached the government, which has a 49 per cent share in the airline, to guarantee a US$2M loan but this has been ruled out by the continuing economic restructuring support programme with the International Monetary Fund (IMF). The losses suffered did not mean "we will stall" but the airline has to find funds, Persaud said at an afternoon briefing at the Georgetown office complex of the Demerara Distillers Limited. GA2000 called the briefing for editors as a result of the Chronicle's page one lead story yesterday that the airline was reportedly in serious problems. Mekdeci and Singh were there. Persaud said the Guyana Government has indicated that it was willing to reduce its shares in GA2000 and the airline can go public and raise funds overseas. The Board Chairman said GA2000 can survive "and it will", acknowledging "we are going through difficult times as a result of market conditions..." GA2000 "is here to stay", Persaud declared. While it has recorded "exceptional performance" since it started flying around mid-July last year, lower than expected fares and unanticipated higher fuel prices, among other factors were responsible for the losses, officials said. Persaud said the losses "would not be horrendous" but admitted that GA2000 would have to cut costs. He announced that the airline would be discontinuing its flights to Miami and that plans for a second aircraft have been deferred. The traffic just was not there to justify a second aircraft, he reported. Mekdeci also announced that the airline would have to increase its fares. Cost-cutting measures being discussed with BWIA include ticketing arrangements and code-sharing which allows passengers with GA2000 tickets to get on flights of other airlines. Persaud said "linkages" negotiations were also under way with Air Caribbean and talks are to be started with Air Jamaica and LIAT. He said GA2000 was also waiting on Suriname Airways to begin similar talks. The talks with BWIA are expected to be concluded "within a few months", the Chairman said. He said GA2000's share of the market was now nearly 60 per cent. Also at the briefing were other board members, Mr Winston Brassington (the government representative), Mr Hilbert Shields and Mr Vic Ouditt. Mekdeci Tuesday said he has a contract with GA2000 which runs until the end of the month but was not sure whether he would be renewing it. "I'm thinking about it," he told the Chronicle. The Chronicle understands that Mekdeci sold his shares in GA2000 late last year. Aviation Investments, a consortium led by the Aircraft Owners Association of Guyana (AOAG) won a bid last year for 51 per cent ownership of the national carrier, Guyana Airways Corporation (GAC). The ailing GAC was put up for privatisation after incurring continuous expenses, forcing it into severe financial problems. The government divested the cash-strapped GAC which had debts estimated at US$10M, US$6M stemming from problems with the corporation's leased Boeing 757 aircraft. GAC was forced into stopping all its international flights in February last year and nearly 200 employees were sent home because of a "wet lease" arrangement engaged by the ailing airline. The rest were later retrenched after the divestment of the airline. After winning the bid out of seven offers, AOAG stressed that its intention was to recapture the airline's dominant position as a national flag carrier.
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