The Tribune

By MORGAN ADDERLEY

Tribune Staff Reporter

madderley@tribunemedia.net

BAHAMASAIR yesterday commissioned a new Boeing 737-790NG jet — an $11.4m investment with a seating capacity of 138 and a flying range of over five hours.

Prime Minister Dr Hubert Minnis delivered the keynote address at yesterday’s commissioning ceremony, where he said this new acquisition will “play an important role in the expansion of Bahamasair’s international service.”

Dr Minnis noted the airline’s flying range places the entire continental US within non-stop service of Nassau and congratulated the airline on this feat.

However, he also spoke to the realities of Bahamasair’s finances.

“The $11 million-dollar investment in the acquisition of this new aircraft will bring the airline’s fleet count to nine: four jets and five turbo props,” Dr Minnis said in his remarks.

“As we continue our work to revitalise and to expand The Bahamas economy to work for all Bahamians, I reiterate the importance of Bahamasair becoming more profitable.”

Before he began his formal speech, the prime minister said: “There has been a lot of talk about downsizing, dismissal, et cetera. Let me state categorically: there will be no dismissal, no downsizing.

“What I would say though: I expect increase in performance and increase productivity and the $15m subvention, I would love to see that decrease by $2m every year.”

During his speech, Bahamasair chairman Tommy Turnquest noted the airline receives an annual $15m subvention from the government. While he said last year the company did experience revenue increase, it still experienced a $21m loss — adding it is “unreasonable” to expect the airline to generate a profit.

“Bahamasair in fiscal (year) 2018 had revenues of $89 million, an increase of approximately $14 million over the previous year,” Mr Turnquest said.

“Regrettably we were not able to greatly reduce the company’s net loss, and still had a loss of $21 million. It is clear that we must focus more on cost containment and control.

“Given the mandate of Bahamasair as the main air transportation link for the islands of The Bahamas, servicing less profitable routes where Bahamians live; keeping airfares at a reasonable cost for Bahamians as well as keeping the fares of our international competitors reasonable; and developing a cadre of Bahamian professionals in the airline industry; it is unlikely and unreasonable to expect Bahamasair to make a financial profit.

“Nonetheless, we must justify the annual subvention that we receive and keep it to a bare minimum based only on those factors that accord with the government’s priorities.”

Mr Turnquest noted in 2016, Bahamasair borrowed $120m to facilitate the purchase of five new ATR turboprop aircraft.

“Concurrent with the purchase of the new ATR aircraft, the airline sold its aged turbo prop Dash-8 fleet for $12.1 million. It is essentially these sale proceeds that have been used to fund the purchase of this next generation more fuel-efficient Boeing 737-790 jet for $11.4 million.”

He added the new jet has 18 more seats than its “sister jets”.

“It is my hope and expectation that this new aircraft will be used as a positive tool in the further development of our tourism product.

“This new aircraft should be used to develop new markets for the Bahamas, and once developed to the point where larger, legacy carriers are prepared to operate those routes, we will be willing to move on to new destinations.”

He added this addition will help the airline improve its on time performance, fleet servicing reliability and therefore customer service.

“We also expect to see more innovative changes, such as check-in kiosks, ‘cashless’ procedures, and a move towards becoming paperless, all with a view to reducing and controlling costs,” he said.

Tourism and Aviation Minister Dionisio D’Aguilar addressed comments made by both Dr Minnis and Mr Turnquest in an interview with the press following the ceremony.

When asked his thoughts on Dr Minnis calling for an annual subvention decrease, Mr D’Aguilar replied: “It will be difficult to achieve that goal, but we will endeavour to do so.

“What this new aircraft will allow us to do is improve efficiency, on-time performance, and therefore grow our customer base. In addition, what it will allow us to do is to service those markets that do not have non-stop, direct service.

“If you look at where we don’t have nonstop service…New Orleans, Chicago, year-round, Cincinnati — if you look at these secondary markets that are not serviced very well by nonstop service, this is where Bahamasair can step in and improve airlift to the country,” Mr D’Aguilar said. “Because that’s going to have to be our marketing plus over the other airlines.”

Regarding a potential move toward a cashless system for the airline, Mr D’Aguilar said: “I don’t know exact date, but that’s definitely a goal. Nothing is more frustrating to me as minister (than) to go into that airport and see that line down the door, round the corner and up the street, because we’re still using a very archaic system of check in.

“The time has come, other airlines are doing it, using kiosks to improve that overall experience by the customer. That’s the way the world is going and we need to move with it.”

The aviation minister also addressed Bahamasair’s struggles in the past with delays due to planes breaking down.

“When Bahamasair loses a plane, we have to wait for that either to get fixed or we have to scramble around or (charter) a plane. And that leads to a degrading of the customer experience.

“So hopefully with this added capacity, we will be able to mitigate the time when an aircraft goes down and we need to go to plan B. So…the growth in the number of planes will mitigate that horrible customer experience which you all saw around the Christmas time.”