The Tribune

By NEIL HARTNELL Tribune Business Editor The Bahamian air transport market's competitiveness is not being impaired by the fact over two-thirds of its international routes are serviced by just one carrier, a draft national aviation policy revealing that their air fares were not more expensive than routes served by multiple carriers. The Bahamas' draft national aviation policy, a copy of which has been seen by Tribune Business, said the Bahamas' proximity to the US, and the fact American airlines competed on a nationwide rather than route-by-route basis, had helped to keep air fares to this nation competitive even on routes dominated by just one carrier. A market outlook survey, conducted as part of the policy, disclosed that Lynden Pindling International Airport (LPIA) served 22 international routes, some 12 of which were to the US and five to the Caribbean. Of the remainder, three went to Canada, another to Panama City via Copa Airlines and to London. Yet 15 of these 22 markets, some 68.1 per cent, were serviced by just one carrier, raising concerns that the lack of competition might lead to higher air fares and poorer services when compared to routes to the Bahamas serviced by multiple carriers. "Competition on a market level is somewhat limited," the report said. "Fifteen out of 22 markets are operated by just one carrier, while the remaining seven markets see two or more airlines each. "A conclusion about competition levels shouldn't be drawn by just looking at the number of carriers on single markets, since competition on the US market takes place nationwide rather than on a route-by-route basis, especially considering the proximity of the South Florida area to the Bahamas. "While it may seem to be a lack of competitiveness, air fares in these markets are not higher than air fares on routes served by more than two airlines. "As an example, although Delta is the only airline operating the Atlanta-Nassau route, American Airlines also offers flights from Atlanta via Miami, that only add a couple of hours to the trip. The same thing applies for direct flights from Cleveland, that can be substituted with connecting flights through New York." And the report added: "A quick search on the Internet reveals that return non-stop fares from markets with only one carrier are similar than fares from markets with two or more airlines. "The competitiveness of the US market coupled with the geographical location of Nassau relative to those markets with many airlines make the carriers compete against each other even on markets where they are the only operators, and place a downward pressure on fares." The draft Bahamian national aviation policy, meanwhile, said the national flag carrier, Bahamasair, was "well-positioned" on routes where it was competing with foreign airlines. To south Florida, Bahamasair enjoyed a 44 per cent market share compared to the foreign airline share of 56 per cent, the survey said, while to Orlando it held a dominant 65 per cent market share. "The South Florida market comprises four airlines, Bahamasair, American Airlines, JetBlue and Spirit Airlines flying between Nassau and Miami and Fort Lauderdale," the draft national aviation policy said. "Bahamasair is the only carrier operating to both cities, with American Airlines flying only to Miami and the remaining US carriers just to Fort Lauderdale. JetBlue is Bahamasair' sole competitor in the Orlando market, while Providenciales is operated by Air Turks & Caicos and British Airways besides the Bahamian carrier. "In the United States markets, Bahamasair's capacity share is between 44 per cent and 65 per cent, which is more than satisfactory considering the intense competition it experiences. The capacity share is slightly behind (30 per cent) in the smaller Providenciales market, and is partly explained by the large aircraft deployed on the route by British Airways." When it came to Freeport, some 70 per cent of its international seat capacity went to south Florida, Fort Lauderdale accounting for a 51 per cent share. Charlotte was a distant second, according to the report, with 9 per cent, followed by Washington, Raleigh and Richmond with 4 per cent each. American Airlines, now in Chapter 11 bankruptcy, has a 37 per cent market share of Freeport's international airlift, with Vision Airlines - at the time the report was written, it had yet to begin its service - projected to take a 26 per cent market share. Continental Airlines was shown by the report as having 11 per cent, with Bahamasair some 10 per cent. When it came to Marsh Harbour, south Florida in the shape of Miami and Fort Lauderdale accounted for 68 per cent of international seat capacity. The other 32 per cent is accounted for by West Palm Beach. In terms of airline share of the Marsh Harbour market, American Airlines and Continental led the way with 41 per cent and 42 per cent, respectively. Bahamasair accounted for the remaining 17 per cent. "The Bahamas air transport sector is well developed, and includes a wide arrange of services that are offered in competitive market conditions," the Bahamas' draft national aviation policy said. "Most international services connect the country with the United States, and only a few provide non-stop links with other countries. This situation is explained by the size of the local market, which cannot sustain non-stop international services to many destinations. "Nevertheless, the significant number of flights that connect Bahamas with the US, the short distance between the countries (especially to the South Florida area), and the number of destinations that can be reached from there, allow connections to virtually anywhere in the Americas or Europe with just one stop in the journey."