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Brutal business environment caused GAC/GA 2000 to fail

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Brutal business environment caused GAC/GA 2000 to fail

Unread post by bimjim » Tue Nov 03, 2009

http://www.stabroeknews.com/2009/letter ... 0-to-fail/

Brutal business environment caused GAC/GA 2000 to fail
By Stabroek staff
November 3, 2009

Dear Editor,

In a letter which appeared in SN on October 28, Mr. Bisram concluded that the collapse of GAC/GA 2000 was due primarily to poor management and political interference.

Further, he claimed that had its lame duck NY Station Manager been given a free hand to run things and his advice and those of his NY travel agent buddies been heeded the airline would have been rescued from its ultimate demise.

Most airlines in the past several years have been operating in turbulent weather. Air Jamaica, LIAT and Caribbean Airlines would not have survived had it not been for the injection of large Government subsidies.

Worldwide, Air India, Japan Air Lines, British Airways and American Airlines among others have been accumulating large operating losses despite the fact that these airlines have some of the best management teams in the industry. Recently, Delta Airlines merged with Northwest Airlines probably hoping that the economy of scale will return it to profitability.

The major reason for these losses is because the airline industry is highly competitive with too many airlines chasing a dwindling revenue base and with their high operating costs particularly for fuel it is extremely difficult for them to be profitable.

Therefore, it is inconceivable that Mr. Bisram and others felt that GAC/GA 2000 could have survived this brutal environment if it had good management and no political interference while operating two planes with high overheads and other costs. The Government of Guyana understood this after North American and Universal Airlines ceased their operations and wisely declined getting into the airline business despite advocacy from various quarters.

Finally, I was perplexed that Mr. Bisram, who claimed that his advice and recommendation could have saved GAC/GA 2000, lost money on purchased tickets. It is sad that he did not know that the major credit card companies would have covered his losses if he had paid for his tickets using their cards.

Yours faithfully,
Charles Sohan

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