The Tribune

• Multiple new charges to pay for $80m upgrade

• Private aviation 'furious' over 10 days' notice

• Airport operator says: 'We're open to dialogue'

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Private aviation operators yesterday voiced fears that the industry faces "death by a thousand cuts" amid a furious reaction to the imposition of multiple new fees to pay for Bimini's $80m airport upgrade.

Rick Gardner, a Bahamas 'flying ambassador', told Tribune Business that "ultimately the losers will be Bahamians dependent on tourism" if price-sensitive private pilots desert the island for other destinations after Bimini Airport Development Partners, the private sector consortium charged with transforming the island's airport, unveiled a host of new charges to help pay for their investment.

The consortium, in an April 26, 2024, notice to private aviation operators obtained by this newspaper, revealed that it plans to introduce the new fees on May 6 with many set for a further increase come June 1, 2025. Many in the industry complained that the ten-day notice period is far too short, while asserting it was "pretty brazen" to impose the charges "without a penny being invested".

"This notice is to serve as an announcement concerning the change of management at South Bimini International Airport," the notice read. "Effective May 6, 2024, Bimini Airport Development Partners (BADP) will assume the management, operations and development of the airport.

"BADP will begin immediate improvements of the airport to modernise and expand the facility, improve airside and navigational infrastructure, procure equipment and enhance services and processes. As a part of our endeavour to provide world-class services we will be continuing and implementing various rates and charges for all general aviation private operators and passengers."

The principal that the customer/user pays to finance airport upgrades such as those planned in Bimini is well established, with Lynden Pindling International Airport (LPIA) in Nassau a prime example. The fees levied on commercial airline, charters and private aviation, plus their passengers, will be used by the Bimini consortium to both repay the debt financing for the upgrades and generate a return on its investment.

However, the scale and breadth of the fees, coupled with the relatively short notice, has shocked Bimini homeowners who possess private planes as well as other observers. Tribune Business was yesterday told that the negative reaction is such that some are now threatening to sell their properties and/or no longer fly to the island, preferring to take the Balearia ferry instead.

One Bimini home and plane owner, speaking on condition of anonymity, said that prior to May 6 incoming private pilots and operators were faced with paying a $50 Customs processing fee, along with the $29 per passenger departure tax and a security fee that is around $10 per person. While these charges remain, the BADP group is adding a host more.

These include, according to its April 26, 2024, note, separate passenger facility and passenger processing fees. The new passenger facility fee is pegged at $20 for domestic passengers, and due to increase to $25 per person come June 1, 2025, while that for international passengers has been set at $40 per head and is set to rise to $45 next year.

As for the passenger facility fee, that will start at $5 for domestic and $10 for international passengers, rising to $6 and $12 per head, respectively, in 2025. There is also a $1 per head "passenger levy", plus a new $25 "pent handling fee" that will rise to $25.50 in 2025.

BADP's notice also sets out a variety of landing, terminal and aircraft parking fees that it plans to charge. The landing fees, set to be based on the type of plane involved and its weight, start within a range of $20 to $115 before increasing to between $30 to $135 next year. Terminal fees, meanwhile, which are based on aircraft seat capacity and turn, start at between $14.76 to $51.67, and rise to $15.20 and $53.22 in 2025.

Aircraft parking fees are to be determined by length of stay, with the daily "tie down" rate set at $30. This latter price is particularly exercising Bimini homeowners who told Tribune Business that, in the absence of any discount for residents, this would translate into a monthly cost of between $900-$930 if they kept their planes at the airport for so long. And, with 10 percent VAT, the ultimate cost would be $990-$993.

Several homeowners asserted these rates make Bimini extremely uncompetitive when compared to the same fees charged by airports in Florida and Georgia. One referred to a Georgia airport where the parking fee was as low as $25 per month, while those at Fort Lauderdale Executive Airport were said to range from $230 to $325 per month.

Ken Rorabaugh, president of the Royal Palm development in south Bimini, told Tribune Business: "If they enforce these fees I'm going to sell my plane. I can't afford to keep it here. I've got 90 homes in our development, and at least 20 people have private planes. They come in on the weekend. They are still working in Florida and fly in on the weekend.

"Everyone is pretty upset about it. I'm making arrangements to get my plane out of here by this weekend because it's [May 6] coming up so fast and I don't want to get stuck with these fees." Another source, speaking on condition of anonymity, added: "People are furious and feel we've been blindsided. There was no input."

Bimini Airport Development Partners has secured a 30-year lease concession to operate and manage the island's airport with a commitment to invest over $80m in its transformation.

Mike Schutt, a Bimini Airport Development Partners director, yesterday told Tribune Business that the consortium is "open to dialogue" with the aviation community over the fees and their level. He confirmed that the 2025 fee rises were what it is projecting "at a minimum to keep up with inflation", and pledged that the revenues will generated will finance the creation of a "safe, secure and quality airport".

However, when this newspaper mentioned the aviation industry push back over BADP's planned fees, Mr Schutt said the Government and Airport Authority would be better placed to address the issue. "I think I would defer primarily to the Government and Airport Authority and any primary commentary they may want to provide," he added.

"What I can say is we're really focused on making sure the airport in Bimini is a safe and secure environment that is in full compliance with Bahamian and international regulations. We're trying to make sure we set the airport up to make the capital improvements that are necessary so people fly into a safe and secure environment.

"There's a fee element that comes with it but that's all directed into making sure we have a quality and safe and secure place." Dr Kenneth Romer, The Bahamas' director of aviation, did not return Tribune Business calls and messages seeking comment before press time on the Bimini fees.

However, Mr Schutt signalled that the charges had been evaluated and benchmarked against those levied at other airports although he did not identify which. He added that this work had been carried out "in conjunction" with the Airport Authority, with the fees and their amount also based on Bimini airport's specific needs.

"We're always open to dialogue, and we want to work with our customers in implementing this and make sure we're delivering that safe, secure and quality airport in the best possible way," Mr Schutt said of the fees and project. "We understand the folks flying in there are our customers. We're open to dialogue and collaboration."

As for the planned fee increases in 2025, Mr Schutt added: "We'll be evaluating everything on a yearly basis at a minimum to keep up with inflation so that's kind of what we've anticipated at this point for next year."

The private aviation market, despite being populated by wealthy individuals and companies, is extremely sensitive to any kind of price changes. Despite having relatively deep pockets, many pilots and plane owners dislike being "nickel-d and dime-d" and, if they perceive or feel a jurisdiction is taking advantage of or exploiting them because of their assumed, they have the freedom to fly elsewhere.

Mr Gardner, the Bahamas flying ambassador, who is also director of CST Flight Services, which provides flight co-ordination and trip support services to the private aviation industry throughout the Caribbean and Latin America, told Tribune Business of the Bimini fees: "I would say it's the law of supply and demand. I think most general aviation operators will not be pleased.

"They will not understand that, after all the fee increases over the years for airport improvements that never happened, there are going to be more and larger fees. They're going to wonder why. Because they own their own aircraft they will go to where they feel welcome and, ultimately, the losers will be Bahamians on the island that depend on tourism.

"They will become dependent on the commercial airlines. How do you start charging money without putting a penny down? It's death by 1,000 cuts." Mr Gardner voiced concern that the Bimini fees could be repeated across multiple other Bahamian islands as the Government seeks private capital/investors to upgrade up to 14 other airports, all of whom will seek to make a return on their investment via user fees.

Another aviation industry source, speaking on condition of anonymity, added: "To charge all those fees before you make any difference in the services you offer is brazen. We knew they were coming. This administration is pushing really hard, but they don't understand the price sensitivity of absolutely everything.

"All they think of aviation is if you can afford a plane you can afford this. The straw is beginning to break the camel's back. They're doing what they did to the yachting industry. Death by 1,000 cuts. My number one problem is that they've given people nine days' notice before this starts. And you've got six days to process this."

Airlines will now have trouble going back to customers for more money to meet these fees when it comes to travel pre-sold for after May 6. "I feel like it's a systematic take down bit by bit by fees," the source added. "We don't have the product to keep people coming back and charging more."

Mr Schutt, meanwhile, added that "preliminary work" has already started at Bimini airport, and the consortium plans to "ramp up" and make "good progress" in May and June after its first shipment of construction materials arrived on island last week.

Reaffirming that first phase construction involves a $30m investment, and is scheduled to be completed in 12 months, Mr Schutt said: "There's improvements around the runway, navigational lights, safety and security improvements, the expansion of the apron to accommodate more and larger planes, and a significant expansion of the terminal building."

Pledging that the works will generate "significant" construction employment that will be "substantially" Bahamian, he added: "It will be a more comfortable and better experience for passengers coming into Bimini and The Bahamas through that airport and exiting through that airport.

"For tourism and the economy on Bimini the benefits will be substantial because, once we make those improvements, it will allow us to add international direct flights to Bimini. We've started conversations with the airlines about that, and we expect significant growth in tourists coming into Bimini over the years.

"There's a lot of interest. There's currently some significant kind of threshold elements that we need to resolve for US and Canadian-based airlines to be willing to fly here with larger planes. By addressing those items we will really unlock capacity that does not exist today." Mr Schutt declined to identify the "items" he was referring to.

Bimini Airport Development Partners is owned by Phoenix Infrastructure, a US-based infrastructure advisory and investment firm with offices in Washington D.C and New York, and Plenary Group, another US infrastructure group. An airport and fixed-base FBO operator called Avports will be the Bimini airport’s management and operating partner.