2001). As part of a plan to privatize its financially distressed national airline, the government of Guyana, on January 28, 1999, lays off 128 Guyana Airways Corporation workers. With the airline $10 million in debt, Prime Minister Samuel Hinds indicates that the search for a majority strategic investor is being intensified. Under the leadership of privatization unit director Winston Brassington, bids are invited from outside groups, due on February 16.
The government, on February 1, wins a bid to return its damaged B-757-28A to ILFC ahead of the end of its November lease without early return penalties. The wet-lease arrangement with North American Airlines remains in place and can hopefully be maintained until privatization, now on a fast track, can be completed.
On February 2 and 5, respectively, the aviation departments of the U. S. (FAA) and Canada (Transport Canada) suspend GAC’s authority to operate into those North American nations. Although it cannot operate its own planes to Miami, New York, or Toronto, it can continue to “wet-lease” flights.
Seven bids are received by the 2 p. m. deadline on February 16. The remainder of the month will be taken up with consideration of the bids by the four-person privatization unit. Director Brassington indicates that negotiations with the bid winner will be conducted in March, with the process, hopefully, concluded by April 1.
By February 17, the situation is so desperate that the airline does not have sufficient cash to pay for its two-weekly wet-leased flights to New York. The airline temporarily suspends selling passenger tickets, but will help to return home by other carrier those passengers it has brought into the country.
The ILFC B-757-28A departs on a February 18 ferry flight to Alabama for a certification check, freeing the debt-ridden airline of its $260,000 monthly lease. Just after departure, thick black smoke and fire is seen coming from the right engine. The aircraft must return to its point of origin where, after a check by representatives of Rolls Royce, it is determined that a new engine will be sought.
Also on February 18, the timetable originally established for consideration of privatization bids is dramatically boosted when the seven requests are presented at a special government cabinet session chaired by President Janet Jagan. Rather than wait another week, the decision is taken to award 51% majority share-holding to Aviation Investments Incorporated (AIC), a 12-member group led by the Aircraft Owners Association of Guyana (AOAG), which is the only local bidder. Under terms of the agreement, the new owner will be given a rather free hand, including the right to retrench all 184 remaining employees if so desired.
In its February 22 issue, The Stabroek reports that a three-man team from AIC will take over operations. The carrier’s new chairman will be Yesu Persaud, while the next president will be Anthony Mekdeci, the nation’s former director of civil aviation. It is also reported that the new owners will immediately pump $1.8 million into GAC and appeal the FAA’s suspension of its authority.
A new Rolls Royce engine for the grounded B-757 arrives from the U. S. on February 26 and is installed by five U. S. engineers.
The main parliamentary opposition, The United Front, voices support on February 27 for the decision by the government to accept the bid of AIC. The ILFC B-757-28A departs Guyana on February 28 for Alabama, where it will undergo a certification check at PEMCO.
On March 1, the 184 remaining GAC employees receive letters of termination; all will receive severance packages and the entire matter will be discussed at a government cabinet meeting on March 3.
Capt. Rodwell A. Paul, who had piloted the B-757-28A, and who along with all other employees has been terminated, joins with former Engineering Manager Lyndon Chance and Marketing Manager Hugh Denbow on March 2 establish a ground-handling business, Timehri Aviation Services, Inc., at Cheddi Jagan International Airport. Some 25-30 former GAC employees are expected to be hired.
Having missed a chance to bid on the airline, the Guyana Association of Airline Professionals offers its congratulations to AIC on March 3. The next day, it is reported that the consortium and the government, which have been in negotiations, expect to seal an arrangement within a few weeks.
On March 11, Roy Hughes, president of the Clerical and Commercial Workers Union, is officially notified that the new ownership will terminate all remaining workers on April 1, paying them 30 days wages in lieu of longer notice.
A senior government official tells The Guyana Chronicle on March 12 that negotiations for a joint partnership in GAC are in their final stages and should be completed within a week. The newspaper also learns that the FAA has given GAC a three-month extension from March 5 to allow for the “reorganization of the company.
Discussions drag on longer than expected, but finally, on April 12, the nine-member consortium of Guyanese businesses is able to clinch 51% controlling interest. It is noted that the $1.8 million paid by AIC for the majority stake will be plowed back into the creation of a new airline, which will be named Guyana Airways 2000 Incorporated (GA 2000 Inc.). AIC will absorb $3.3 million in debts from the predecessor organization, but will abandon its uneconomical domestic operations.
Simultaneously, President Mekdeci indicates that two aircraft will be leased and tickets sold in order that services might commence in May. A workforce of 30 will be employed, growing to 150 by year’s end. GA 2000 Inc. is formally registered on April 16 and the privatization process with the government is completed on April 23 when Finance Minister Bharrat Jagdeo closes out the remaining details.
The board of directors for GAC 2000 is approved by the cabinet on April 27. Yesu Persaud from Aviation Investments is chairman, with Stanley Ming, Vic Oditt, and Michael Correia. Representing the government are Winston Brassington, Carole Hebert, and Gita Raghubir.
Simultaneously, CEO Mekdeci reports that the carrier’s first flight will be made on May 27 from Toronto-Guyana-New York (JFK) with an Airbus Industrie A300B4-622R from an as-yet unnamed leasing company (which will turn out to be Nordstress Australia, Pty.).
Plans are confirmed on June 12 to start Toronto service within five days; however, the scheduled launch must be scrubbed on June 17 because Canadian regulatory authorities have not yet finished processing an approval for Nordstress, the Australian concern from which the Airbus has been leased.
After considerable delay, the leased, former China Northern Airlines Company, Ltd. Airbus Industrie A300B4-622R, wearing the carrier’s new red, golden orange, and blue livery, undertakes the reborn company’s first roundtrip service to New York (JFK) on July 9, continuing on to Toronto.
In September, the U. S. DOT amends the carrier’s exemption authority to include service to Santo Domingo, St. Lucia, Grenada and Haiti as intermediate points on its New York route. Plans to inaugurate twice-weekly return service to Miami on October 29 must be rescheduled.
Miami finally joins the route network on November 14, giving GA2000 seven nonstops per week into North America, including five to New York and Toronto. The Stabroekreports five days later that the airline is now boasting that so far it has transported more passengers in this peak Christmas season than it ever had under its Guyana Airways Corporation banner and that it has yet to leave any baggage behind.
A strategic alliance is entered into with SLM (Surinam Airways,
N. V.) at the end of the year. Under terms of the agreement, the two carriers will now share facilities and ticketing to Barbados, Trinidad and Tobago, and North America.
Rumors begin to circulate in early January 2000 that the reborn carrier is in significant financial difficulty. Shortly after New Year’s, Chairman Persaud and several members of the board of directors meet with Guyanese President Bharrat Jagdeo to discuss the airline’s progress. On January 10, Persaud and other executives travel to Trinidad and Tobago for what are termed “exploratory” talks with BWIA West Indian Airways, Ltd. On January 12, The Guyana Chronicle suggests that the airline had lost $800 million during the second half of 1999 and that several of its key officials may soon be leaving.
With public concern over the fiscal state of GA2000 rising, President Jagdeo holds a news conference on January 13 to discuss his meeting with airline officials. He takes pains to indicate that, while losses had been sustained, they were nowhere near as deep as those suggested by the newspaper report of the previous day. Larry Singh, the carrier’s operations director and a shareholder, resigns on January 18. After only three months, the Miami service is withdrawn in late January at the same time that CEO Anthony Mekdeci resigns his office.
Even though it is very expensive to operate, plans are announced in early February for the renewal of the wet-leased A300B4-622R from Nordstress, with the option to alter that charter to a dry-lease after six month’s service. By this action, the international regulations necessary for company to continue claiming the title of Guyana’s flag carrier will be met. Demerara Distillers, Ltd. Human Resources Manager Nowrang Persaud is seconded to the airline as acting general manager to help it engage in a certain amount of restructuring, during which the services of a number of employees are terminated, reducing the workforce from over 200 to 140. Bridge financing is also sought to help the airline make its way through what has turned out, in fact, to be a difficult period.
To cut costs, the decision to request the Nordstress Airbus is scrubbed and on March 8 Chairman Persaud discloses that another deal with the Australian lessor will, instead, allow introduction of a smaller wet-leased Boeing 757-200 by April. The dry-lease arrangements made for the Airbus are carried over to the new aircraft. Delivery of the Boeing is delayed; as late as April 19, AirlinersonLine is suggesting that Guyana Air 2000 may have changed its mind about replacing the Airbus with a B-757 because the larger aircraft is still operating the company’s flights to New York (JFK) and Toronto.
On May 9, the B-757-23A, painted in Guyana Airways 2000 livery, finally arrives at Cheddi Jagan International Airport under the a six-month wet-lease agreement announced earlier, complete with the option to convert to dry-lease within six months after Guyanese flight crew become available. The Boeing enters service on May 13, allowing return of the Airbus.
Former BWIA West Indies Airways, Ltd. executive Thomas Scarlett becomes the new CEO July 1, allowing Nowrang Persaud to return to Demerara Distillers, Ltd. Speaking at the formal news conference held in Georgetown to introduce the new leader, Chairman Persaud reviews the challenges of the first year, the anniversary of which will be celebrated in just eight days. The opportunity is taken to announce that GA2000 is positioning itself to increase its share capital to approximately $15-$20 million and will soon announce a new marketing strategy.
Return frequencies between Guyana and North America are boosted in August to eight per week, six to New York (JFK) and two to Toronto. Meanwhile, eight local pilots who earlier flew the GAC B-757, have been hired and sent for a refresher course so that the current wet-lease arrangement may be changed over to dry-lease in October.
GA 2000 will cease operations on August 2, 2001.
World History
