The Tribune

By EARYEL BOWLEG

Tribune Staff Reporter

ebowleg@tribunemedia.net

THE Bahamas Air Navigation Services Authority and the United States Federal Aviation Administration signed an “historic” Air Navigation Services agreement yesterday which is expected to bring in around $300m in fees over the next ten years.

The occasion signifies The Bahamas’ ability to have management over the country’s airspace and charging fees for airspace users. While giving remarks at the signing, Tourism and Aviation Minister Dionsio D’Aguilar called it an “historic day”.

“Never before in the history of an independent Bahamas has anyone paid anything to the government of the Bahamas for the use of its airspace. Today, that changes,” he said.

The Tribune has repeatedly drawn attention to the issue alerting our readers to the fact that millions of dollars of aviation fees have slipped through the country’s fingers.

Mr D’Aguilar noted the associated air traffic control services fees came into effect on May 1 this year. The fees cover planes arriving and departing the country as well as aircraft flying over.

He explained: “Based upon the fact that the provision of such air traffic control services attracts a fee in almost all jurisdictions of the world, on 1 May 2021, all airspace users that land and take off from Bahamian airports and fly within Bahamian airspace will now pay a fee of $1 per arriving and departing passenger plus a flat fee of $10 up to $61 for each flight depending on the maximum take off weight (MTOW) of the aircraft. The aircraft that weighs less will pay less and the aircraft that (weighs) more will pay more.

“Also, prior to 1 May 2021, all aircraft flying over the Bahamas, not landing or taking off in the Bahamas, but simply flying through our sovereign airspace paid the FAA directly $61.75 per 100 nautical miles. After 1 May 2021, the airspace users will pay the government of the Bahamas from $8.50 to $51.60 per 100 nautical miles based upon the maximum take off weight (MTOW) of the aircraft. Once again, the aircraft that weighs less and travels a shorter distance will pay less and the aircraft that weighs more and travels a longer distance will pay more.”

However, the country does not have infrastructure nor the capacity currently to provide air traffic control services above 6,000ft in the sovereign air space. Thus, under the signed agreement, the FAA will provide that service on the Bahamas’ behalf for the next 10 years, with an automatic 36-month extension if the Bahamas wishes to renew at the 10-year period.

The FAA will not charge BANSA for the continued provision of air traffic services within the portion of Bahamian airspace for which the FAA currently provides air traffic service.

“Upon entry into force of this agreement, 1 May 2021, the FAA will end its collection of overflight fees for this airspace,” the minister said. “The FAA will continue to provide air navigation services in the sovereign airspace of the Bahamas free of charge.”

BANSA will pay the FAA a small fee of $80,000 per annum for the provision of data, the details of what airspace users flew through the sovereign airspace in a particular month. In turn, the data will be used to assist in billing and collection of the fees.

Mr D’Aguilar noted that typically when people purchase an airline ticket, all of these fees are embedded in the price.

“There’s an organisation called IATA, the International Air Transport Association, which is like the Chamber of Commerce for all airlines and all of the fees go to IATA and then IATA then takes that money that you’ve paid for your ticket and breaks out between some goes to the airport. Some goes in government taxes. Some will go in these fees and that is how monies are settled in the aviation sector. The fees will be built into your tickets and when you purchase a ticket you will pay for those fees.”

Mr D’Aguilar said an annual injection of tens of million of dollars is anticipated due to the fees.

He said: “We’ve obviously had our consultants looking at the traffic flow and based on the fee structure that we would have designed and we’ve put in place, we reckon in the first year it should be between $20-30 million and then obviously right now we’re in a depressed aviation sector. COVID-19 has significantly impacted the aviation sector and we envision overtime this growing to $30-40 million. So, I’d like to say over the next 10 years we’re signing today a $300-350 million deal today.”

The minister said officials “do not envision late payments,” pointing to the collection system that already exists in the commercial aviation sector.

“You know when you buy the ticket, the money goes to IATA and IATA then sends it to us. “So, once we tell IATA that JetBlue flew from Fort Lauderdale to Nassau and based on the weight of the aircraft it incurred this fee, based on the number passengers it incurred, they bill JetBlue…they collect the money from JetBlue and at the end of the month or whenever we send the bills or respond the money will come from JetBlue.

“Now, there is general aviation. You may have a private plane, jump up, and fly within the airspace. So that’s a bit complex…. a bit more management to collect those fees. “(Certainly), the vast majority of users in the airspace will be the commercial aviation sector for which there’s a long established very robust collection system. As you can imagine every provider in this sector—airports, Bahamas government taxes, now the aviation charges—all of that is incorporated into the ticket and comes into IATA..… So it’s like a 99 percent collection rate.”

Asked how the fees will impact ticket prices, Mr D’Aguilar indicated that depends on several factors.

“The fee that we’re collecting is based on the maximum take off weight of the plane and the number of passengers. So the airline will bill that into a ticket—pennies, 30-40-50 cents. “Maybe a dollar. I don’t know specifically because obviously each aircraft will attract a different fee…..but what we try to do is in basing the fee on the maximum take off weight of the aircraft well obviously in our jurisdiction most of the aircraft are not very heavy. So they will attract lower fees.”

Mr D’Aguilar noted the significance of the arrangement, explaining that back in 1952, Great Britain met with United States and Cuban officials in Havana where it was decided that the provision of air navigation services over what is now the sovereign airspace of the Bahamas would be divided between the FAA from the United States and its equivalent, ECNA from Cuba.

United States Charge d’Affaires Usha Pitts also spoke of the agreement’s importance.

“…..All the other more important things that we forget about that airspace management allows us to do which includes economic investment. We have cultural exchanges. We have a lot of educational exchanges,” she said.

“We sometimes take for granted the fact all of this aviation management leads to the fact that both our countries benefit mightily from our communication.

“This agreement of course cements our cooperation for the next ten years….. and it also begins the process by which the Bahamas can take greater ownership of their own airspace,” Ms Pitts noted.

In February, Parliament passed a compendium of aviation bills, one of which set up the necessary infrastructure so that the country can monetise its airspace.

Discussions surrounding the management of Bahamian sovereign airspace have been ongoing for the last 25 years.