Business

CAL, Fly Jamaica denied US rejects Fly Jamaica, CAL bids for direct Guyana-New York flights

Friday, October 04, 2013    

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THE US Government has denied applications by Fly Jamaica and Caribbean Airlines Limited (CAL) to offer direct flights between Georgetown, Guyana and New York.

"By this order we deny the requests of Fly Jamaica Airways Limited, a foreign air carrier of Jamaica, and Caribbean Airlines Limited, a foreign air carrier of Trinidad and Tobago... for extrabilateral authority to conduct seventh-freedom combination turnaround services between New York, New York (JFK), and Georgetown, Guyana," the US Department of Transportation (DOT) said in its ruling this week.

The regional carriers filed appications for the route in July, declaring that there was underserviced demand for direct transportation between the two locations.

Both airlines already offer services between Georgetown and New York services, but no direct flights. CAL provides a New York-Georgetown service—  with Georgetown as an authorised intermediate/behind point — on two flights; a Port of Spain-Georgetown-New York routing, and the other flight via Georgetown-Port of Spain- New York.

CAL cited its market share and load factors on its current flights in its application, contending that if permitted to operate "seventh-freedom turnaround" New York-Georgetown services, it can eliminate the unproductive Port of Spain-Georgetown segment, allowing it to increase its frequency, market share, and load factors, while potentially reducing fares on the New York-Georgetown route. The airline, which stated that it has been granted flag-carrier status from Guyana, also noted that its proposed service would not impact US carriers, as there is currently no US carrier offering a similar service

Fly Jamaica in its application, also asserted that there is sufficient demand for New York- Guyana services and that no US carrier currently serves the New York-Georgetown market. The airline added as well that it has been designated as a flag carrier of Guyana.

However, DOT served its denial on Monday, stating that it could not make the public interest findings neccessary when considering foreign air carrier requests for extrabilateral authority. In considering foreign air carrier requests for extrabilateral authority, DOT said that it weighs various criteria specific to the type of extrabilateral request, as well as any other factors that are germane to a particular case.

"With respect specifically to requests for extrabilateral seventh-freedom turnaround service, we have historically viewed such requests as extraordinary and have granted such authority only when the circumstances presented on the record in individual cases show compelling public interest considerations," the ruling said.

According to DOT, the Open-Skies Agreements that it has with both Jamaica and Trinidad provide rights for licensed carriers of both countries to conduct fifth-freedom services with full traffic rights on all segments, but it noted that such rights are already being exercised by CAL, to transport Georgetown-New York traffic on its existing two flights, and Fly Jamaica, which has begun serving the Georgetown-New York market on a one-stop basis via Kingston, Jamaica.

"In light of these existing Georgetown-New York services and the lack of a showing by the applicants on the record that there is a truly demonstrable need for additional Georgetown-New York services, we are unable to find that the CAL and Fly Jamaica seventh-freedom turnaround proposals satisfy our public interest test for the type of extraordinary authority at issue," DOT said.

The Air Line Pilots Association (ALPA) and Airlines for America (A4A) had both filed objections to the applications of Fly Jamaica and CAL, urging DOT to reject the requests.

Both groups argued that the airlines' requests were extrabilateral and that CAL's operations are being subsidised by the government of Trinidad and Tobago, asserting that such a foreign subsidy would impede the ability of US carriers to compete.

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