Aviation sector contributed $20B to GDP for 2015 – study

– as foreigners spending cash a major boost to economy

By Jarryl Bryan

A study which was commissioned by the Guyana Civil Aviation Authority (GCAA)

has revealed that the aviation sector contributed some $20B or 3.2 per cent of the national Gross Domestic Product (GDP) for 2015.

The report was done by UK based Oxford Business Group at a cost of US$50,000. According to GCAA Director General, Retired Colonel Egbert Field, the study will be used as a bench mark to continually assess the performance of the sector, in order to make improvements.

“We decided to engineer a study that would assess the impact of aviation over the past two years, so that we could set a bench mark for future studies knowing the part aviation plays in the whole economical realm,” he said.

“The GCAA is responsible for the safety and security of our travelling public. But we are also involved in the economic side. It provides as much as 3.2 per cent of the gross domestic product and provides jobs for over 12,000 individuals.”

Oxford acquired much of its source data for analysis from the Bureau of Statistics. Giving a breakdown of the figures, Director of Air Transport Management Saheed Sulaman stated that the sector created 900 jobs in training and transport.

He also noted that 2,010 jobs were indirectly created. Combining direct and indirect employment, Sulaman said that over 3,000 such jobs were created. In addition, the monetary value of aviation on sectors was analysed and split.

According to the study, the direct impact on sectors amounted to $1.6B, while the indirect impact was $3.8B. The induced impact, Sulaman revealed, was $1.3B. Altogether, Sulaman said this amounts to $6.8B. Then there is the labour income, which the Oxford Group worked out to be $3.3B.

Foreigners

Besides the important role that aviation plays in providing support for gold mining and other sectors, the report concludes that the aviation sector is integral to tourism. According to the report, it is responsible for creating over 8,000 jobs. The study noted that there were over 200,000 arrivals for 2015, with Guyana earning $2B from travel tax for that year.

“Practically all foreigners coming to Guyana travel by air. In excess of 80 per cent of tourists come to Guyana via air,” Sulaman said. “Every foreigner, of course, spends money in the economy and this was captured in the study as part of the 3.2 per cent impact of the GDP.”

“In terms of what a foreigner spends, they’ve estimated a sum of US$25 per visitor per night. To come up with that figure, they found an average of all visitors. They’ve also quantified the impact of tax revenue, an estimated $2B in revenue.”

The US$25 per tourist is a conservative number aimed at making up for the number of Guyanese who may be returning visitors staying with family rather than hotels. However, the country has over the past year witnessed a large influx of Cuban nationals who shop in bulk in the city.

This was seen as a welcome development, due to the sloth in the economy and reduced spending from local consumers. However, aviation magnate Gerry Gouveia had opined that these numbers are reducing and that Guyana would have to work to attract the Cubans back.

Last month, Guyana Times spoke with several owners of major retail and wholesale outlets along Regent Street on to get an understanding as to whether in fact there are fewer Cubans shopping in Guyana.

While some claimed that there has not been a decline in Cubans shopping here, a majority of the business people said they have noticed the decline over the past month or two.

A prominent businessman on Regent Street, who deals in apparel, told this newspaper that there were still many Cubans who shop at his store. The businessman, who had requested anonymity, admitted that Cubans have been helping to boost profits for his company and they have indeed been keeping other businesses afloat, given their heavy influx over the past several months.

Another businesswoman also told this newspaper that she was convinced that the declining numbers given by Gouveia might be accurate since the number of flights bringing Cubans to Guyana have been significantly reduced. In addition, she is seeing fewer Cubans on Regent Street and in other shopping areas in the city.

It was in November 2016, that EasySky Airline reported that it was taking 300 Cubans to Guyana each week to conduct business, mainly to shop large quantities of clothing, electronic and other items.