Fuel cost, maintenance, insurance, skilled personnel drive domestic airfares – operators

…suggests Govt put a voucher system to support vulnerable groups

Days after President Dr Irfaan Ali expressed disappointment with the domestic aviation sector for failing to meaningfully reduce airfares, operators on Tuesday issued a statement defending the current prices, noting that the costs are driven by a range of factors, including fuel, aircraft maintenance, insurance, and the expense of employing skilled personnel.
Last week Wednesday, President Ali said, “We are very disappointed in the aviation sector because we have not been able to get the corresponding returns on the investments that we are making.”
However, the Aviation Operators Association of Guyana (AOAG) said the domestic airfares are driven by the actual costs of providing safe and reliable air transportation, including aviation fuel, aircraft maintenance, spare parts, insurance, financing, regulatory compliance, and the cost of skilled personnel.
In fact, the association noted that the domestic aviation market is highly competitive, with several private operators competing daily for passengers and cargo. As a result, it said there is little difference between the prices of the competing airlines.
The association explained that “the comparison between the prices charged by the domestic aviation operators for similar journeys in the Caribbean clearly shows that our prices are below those charged in the Caribbean and shows that our domestic operators are not profiteering. It is important to recognise, too, that our domestic operators fly in vastly more challenging conditions than those in the Caribbean.”
The local operators also highlighted that they have spent decades investing in aircraft, infrastructure, training, employment, and safety. They explained that modern aircraft suitable for Guyana’s operations are expensive.
“For instance, the capital repayment for a Cessna Caravan is over US$40,000 per month, or about US$700 per flight hour, and these costs are regardless of whether the aircraft is parked or flying. A Technam P2012 Traveller costs approximately US$3.2 million, while a Cessna Caravan costs approximately US$3.8 million, and the HAL 228 approximately US$10 million,” the AOAG highlighted.
They noted too that aviation insurance premiums are generally some 300 per cent higher in Guyana than for comparable operations in the United States and are amongst the highest in the Caribbean region. They said this because insurance companies assess Guyana as a high operational risk, flying in conditions of remote aerodromes, a tropical environment, limited emergency infrastructure and landing and take-off on short unpaved runways.
Notwithstanding, the operators said they acknowledge and appreciate the Government’s substantial investment in continuously upgrading hinterland aerodromes across Guyana, which have significantly improved safety, reliability and operational efficiency, but “our aircraft must still operate on laterite runways and gravel strips in the remote mining and village aerodromes, requiring higher maintenance costs than, for instance, operating in the Caribbean and the USA.”
The operators said they remain committed to finding practical solutions that reduce transportation costs without undermining the safety and long-term sustainability of the industry.
They also remain willing to participate in an independent review of the economics of domestic aviation so that future policy decisions can be guided by objective data and a shared understanding of the industry’s operating realities.

Vouchers
Moreover, while acknowledging the burdens the current airfares have on vulnerable groups, the association revealed that it had suggested to the Government the implementation of vouchers to support schoolchildren, medical referrals, pensioners, and low-income residents of hinterland villages.
The association said this approach would provide direct assistance to those who need it most while preserving competition and encouraging continued private investment.
Earlier this year, nearly all the domestic airlines had announced a reduction in the rates for flights to locations with new airstrips.
However, the local operators subsequently increased their airfares back in April after aviation fuel prices skyrocketed in the global market due to the Middle East conflict.
The AOAG explained that over the past several months, they have had numerous and constructive meetings with the Government, where the industry’s cost structure was examined in considerable detail.
Back in November 2025, President Ali had pointed out that the local aviation sector is financially capable of lowering domestic air transport fares to hinterland locations by as much as 15 per cent.

Commercial arm
During the National Toshaos Council (NTC) Conference last year, Vice President (VP) Dr Bharrat Jagdeo announced that the Government was contemplating investing in a commercial arm of the Guyana Defence Force (GDF) in order to compete with domestic airlines that continue to exploit consumers.
The VP had also noted that sometimes, there are middlemen who would charter flights from airlines and charge even higher prices – another issue that needs to be addressed.
Nevertheless, the AOAG emphasised that the domestic aviation industry has always regarded itself as a partner in Guyana’s national development.
“We remain committed to working collaboratively with the Government to ensure that the people of Guyana continue to benefit from safe, reliable, affordable, and sustainable air transportation,” the association noted.