Ramdeo’s arrest forces winding-up of EZjet

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Ramdeo’s arrest forces winding-up of EZjet

Unread post by bimjim » Fri Dec 14, 2012

http://www.guyanatimesgy.com/?p=9181

Ramdeo’s arrest forces winding-up of EZjet
– passengers urged not to cash refund cheques
Lakhram Bhagirat
December 13, 2012

Passengers issued EZjet refund cheques are urged not to have those cashed, since the failed airline has no money in the bank, according to acting Chief Executive Officer (CEO) Rosalinda Rasul. She also announced the demise of the airline.
    • Image
      EZjet owner Sonny Ramdeo
“I am urging those passengers not to go to the bank with their cheques… they should wait on the government to have their refund,” she said. “….we have no other option than to ‘wind up’ operations here.”

Rasul explained that passengers, who were granted refunds, were given post-dated cheques, dated December 14 (today), since the money was supposed to be made available by airline owner Guyanese Sonny Ramdeo by then. Ramdeo was arrested by the FBI on Tuesday evening.

The acting chief executive officer stated that it was really disheartening to witness the gradual demise of the airline, but it was all due to the lies and deception of Ramdeo. She was at the time making her final statement to the media at a conference.

She added that the airline undertook the refunding process, since it thought that was its obligation; however, she was later informed that the government is the one that oversees the process.
“Two days before we began refunding we realised that for us to get the bond the government has to be the one that oversees the process, and it was then we said that we will issue the post-dated cheques,” she stated.

Rasul explained that she contacted Ramdeo and told him of the barrier, and he said he would have arranged the money to have the passengers refunded. However, he did not honour his obligation.

Lies and deception

She attributed the demise of EZjet to the lies and deception of Ramdeo. “EZjet was fragmented; no one knew what was happening in the other divisions, only Sonny Ramdeo, the owner of the airline, knew what was happening in the company. Only he knew the entire financial position of the company,” she said.
    • Image
      Acting CEO Rosalinda Rasul
She noted that her management was restricted to the operations of the Georgetown office. “…we trusted Sonny and believed what he told us about the company. I was neither aware nor saw any signs that EZjet was in trouble… he never informed anyone, so there could’ve be any consorted effort or plan put together to save the airline,” she added.

The acting CEO stated that she became aware that the airline was in trouble after the lawsuit surfaced. She recalled that in early October she met Ramdeo in a restaurant in New York where he informed her that he was going to be absent for three months and she was to occupy the position as CEO.

She said she wanted to take the airline in a direction different from Ramdeo, because she suspected that he would not able to sustain it. She said one week after the lawsuit, many financial responsibilities were thrust on the Georgetown office rather than the New York location. She noted that it came as a surprise since they had to pay the bills and were not replenishing their resources as quickly as anticipated. Rasul revealed that she had to make a payment of US$240,000, which was their last payment before the airline began crumbling.

“….if I had known, I would not have paid that money. Before the suspension, I realised that if EZjet was going to sustain itself, there needed to be an immediate capital injection because it was obvious Sonny was not able to sustain it. Three weeks before the suspension, I began seeking investors; there was one particular investor that wanted to take over the airline, so I introduced him to Sonny and talks began. I really pushed this investor even to the point of begging him and on the 8th November when DOT (U.S. Department of Transportation) suspended the licence, we were 99.9 per cent completed,” she added.
Lawsuit

She said many people were interested in taking over the airline, but Ramdeo’s lawsuit drove them away. EZjet began experiencing problems late October when Ramdeo was sued by a United States hospital chain, which accused him of stealing more than US$5 million “through a sophisticated scheme of fraud and deception”.

The airline was licensed to operate non-stop between Guyana and New York, Toronto, and Port of Spain. It had its inaugural flight on December 16, 2011. The airline created a major shake-up with the low fares offered.

This saw carriers like Caribbean Airlines Limited (CAL) offering non-stop service between Guyana and New York and also lowering their fares significantly. Throughout its brief operation, EZjet complained about “unfair competition and lack of governmental support.

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 denied it owed Swift Air money, and said the reverse was true, since passengers were left stranded by the charter company. The DOTS suspended EZjet’s U.S. licence on the request of Swift Air; its licences to operate in Guyana and Canada were later cancelled by the Guyana Civil Aviation Authority and the Toronto Transportation Board respectively.

Following the cutting of the airline’s service, stranded passengers were irate as they turned up at the various airports to find out that their flights were cancelled. They were made to incur additional expenses to get to their various destinations.

Government stepped in and collaborated with CAL and Delta as they sought to bring relief to the stranded passengers. The airline kept mum on assisting those stranded passenger but later stated that it would be issuing refunds.

On November 30, the airline began tapping into its security bond and issued post-dated cheques to passengers.

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