No easy way out for EZjet

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Web site: http://www.ezjetgt.com/
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bimjim
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No easy way out for EZjet

Unread post by bimjim » Mon Dec 10, 2012

http://www.guyanatimesgy.com/?p=8757

No easy way out for EZjet
– but officials optimistic about a return to the skies
By Lakhram Bhagirat
December 10, 2012 By admin

Despite looming scepticism about the return of failed airline, EZjet Air Services, officials are optimistic that the carrier will return.

EZjet is owned and managed by Guyanese Sonny Ramdeo, and began experiencing problems late October when he was sued by a United States hospital chain for fraud. The airline was licensed to operate non-stop between Georgetown and New York, Toronto, and Port of Spain. It had its inaugural flight on December 16, 2011, when Ramdeo had stated that he was the sole investor.

The airline created a major shake-up with low fares. This saw carriers like Caribbean Airlines Limited (CAL) offering non-stop service between Guyana and New York and lowering its fares significantly.
This development prompted government spokesman, Dr Roger Luncheon to say that the state would support any airline like EZjet.

However, throughout its brief operation, EZjet complained about “unfair competition and lack of governmental support”. It also lobbied to become the flag bearer of the country, but never submitted the necessary documentation with the relevant authorities, according to acting Chief Executive Officer (CEO) Rosalinda Rasul, during a previous interview with this newspaper.

Promise Healthcare and 11 of its hospitals sued Ramdeo, of PayServ Tax, in Palm Beach County Court, accusing him of stealing over US$5 million through a sophisticated scheme of fraud and deception. When news of the lawsuit and flight cancellations broke, rumours of the airline going out of service swirled, but the company, through its Facebook page, kept assuring passengers it was still in operation.

However, the airline’s operation licences were later suspended by the United States’ Department of Transportation and the Guyana Civil Aviation Authority, following a request by its charter company Swift Air, owing to alleged non-payment.
Govt and CAL petition

Since its collapse early November, EZjet has been accusing the government and CAL of contributing to its demise, coupled with “bad management” on its part. The failed airline has now taken its accusation of unfair competition to another level, targeting government in a petition which it is urging its passengers to sign to ensure a return to the market.

“In February of 2012, EZjet complained to the government of Guyana.

In EZjet’s complaint, it stated that Caribbean Airlines was taking reservations and selling seats on an Omni Air International (U.S.) B767 aircraft, operating to and from Georgetown, destined to New York and Port of Spain, during the four months period from 10 February 2012 through 13 May 2012, when more than sufficient seats are already available between Georgetown and New York,” the airline stated.

“… while it is recognised Caribbean Airlines historically served Guyana when our country had no national carrier and, accordingly, was then granted special privileges for Guyana service: EZjet, along with Delta Air Lines and Caribbean are operating flights between Georgetown and New York. These flights offered more than adequate seat capacity on this route.

In fact, since EZjet started flying, both Caribbean and Delta have been operating with additional empty seats on every flight. Caribbean is taking the course of a predator to re-establish its previous dominance,” EZjet said.

It said that CAL’s bold attempt to tempt passengers from its competitors and restore its once dominant market share should be challenged. EZjet accused the government of taking no action to protect the airline; rather it encouraged the predatory move to put EZjet out of business.

During the past nine months, EZjet captured 59 per cent of the New York market, which was previously shared by CAL (60 per cent) and Delta (40 per cent) – also the market grew by nine per cent. As a result of the competition, fares dropped to a record price of US$321 per roundtrip between Guyana and New York as compared to the historical low price of US$660.

“The government supported CAL’s efforts to put EZjet out of business, knowing that CAL is currently in violation of Caricom Multilateral Air Services Agreement, Article 14 and 15, relating to fair competition.

Item two of Article 14 required that the governments take all appropriate action within in their respective jurisdictions to eliminate all forms of discrimination and unfair competitive practices adversely affecting the competitive position. Item four of the same article also required the government to take into account the requirements of the public for transportation and the need for stability on the specific routes, and shall have as their primary objective the provision, at a reasonable load factor, of capacity adequate to meet the current and reasonably anticipated requirements for the carriage of passengers, cargo and mail on the specified routes,” the petition stated.

It added: “Without a subsidy and constant infusion of cash from the government of Trinidad, CAL cannot survive... they utilised those resources to put EZjet out of business.” EZjet’s demise also saw government naming Caribbean Airlines as the flag bearer of Guyana.

Accusations

The airline went out of operation early November after a payment dispute with its charter company Swift Air, which said EZjet owed it money. However, the airline continues to deny it owes Swift Air any money, and said rather the charter company owes EZjet money since passengers were left stranded by the company.

The airline had explained that the suspension of its service came after Swift Air took off from Port of Spain, Trinidad on November 7, leaving passengers stranded.

The airline alleged that Swift Air also forced it to cancel flights on November 2 and 3 after the charter company abandoned passengers at the John F Kennedy Airport, New York, and took another job flying the Boston Celtics, inconveniencing EZjet’s passengers.

“While Swift Air claims it has not been paid, EZjet believes Swift Air owes EZjet over US$800,000 plus relating to various charges, including using substitute aircraft when theirs was damaged, ground services, hotel stays for passengers, food and other amenities during delays caused by them,” EZjet alleged.

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