The Tribune

By NEIL HARTNELL Tribune Business Editor SKY Bahamas is "reviewing daily" whether it will reduce its US flight schedule or withdraw from that market completely, its president telling Tribune Business yesterday that load factors on some flights were down to 15-20 per cent. Captain Randy Butler said the Bahamas-based airline's international ambitions with the Florida market were being squeezed from multiple directions, the lower cost structures enjoyed by rival foreign carriers - together with subsidies and incentives offered by the Bahamian government - enabling them to "advertise their pricing at 50 per cent less than what we're doing". As a result of entering the Florida-Bahamas aviation market, Sky Bahamas was being required to put up bonds with the likes of Fort Lauderdale International Airport and increase its insurance coverage, but this nation was not demanding the same of foreign carriers coming here. This, Captain Butler said, resulted in an 'uneven playing field' working against his company. "We can't expand the US flights because of some of the things that are happening," Captain Butler told Tribune Business, also pointing to the support and incentives that the Government was giving the likes of Bahamasair/Vision Airlines, Silver Airways (the post-Chapter 11 bankruptcy, renamed Gulfstream) and Sun Air. "The Government is supporting them, putting them on their website, giving them incentives we don't have," he added. Captain Butler told Tribune Business that Sky Bahamas' relatively strong inter-island routes in the Bahamas were effectively subsidising the airline's currently loss-making US/Florida routes, and the latter's performance was pushing management towards making a decision as to whether to persist with service to that market. "Domestically, we're doing good," he confirmed. "Bahamians love the service we're giving; international people are looking for the price. On the international routes, we're down sometimes to 15-20 per cent load factors. On the domestic, we're doing an average of 65 per cent. "I'm spending a lot of money keeping the US side going, so we're thinking about reducing that, reducing the frequency, and we may look at not going to the US at all. We're still looking at the numbers. My accountant is looking at it with me, and they're red numbers right no." Captain Butler said it was possible Sky Bahamas would continue with its US routes through the summer, as it wanted to honour all existing contracts in place. "We're reviewing it daily," he added. "It has an effect on how many people we can employ in a bad economy. We're in the middle of being squeezed on all sides. We're still paying Customs duties, all kinds of things are coming out daily, and we're trying to keep 120 people employed and give connectivity to some islands. We're the only show on Cat Island." Sky Bahamas currently serves Fort Lauderdale with flights from Nassau, Freeport and Abaco on four days a week, Thursday, Friday, Sunday and Monday, with two flights from each destination. Captain Butler also disclosed to Tribune Business that the relatively high costs involved had deterred Sky Bahamas from providing services between the Bahamas and West Palm Beach, as the airline was already paying $64,000 per month to cover its fixed charges on existing US routes. Giving an insight into the fees levied on airlines by airports, the Sky Bahamas chief executive said he was paying around $250,000 to just three. His airline paid $110,000 per month in fees to the Nassau Airport Development Company (NAD) for using the facilities at Lynden Pindling International Airport (LPIA), some $70,000 at Grand Bahama International Airport, and a sum equivalent to the latter in Fort Lauderdale. "If the Bahamas would enforce its regulations, like making foreign carriers comply with operational specifics and coming up with standards for insurance, the same as the US requires of us, we'd have a level playing field to operate on," Captain Butler told Tribune Business. "What is happening to us is not unusual. We're not unique. We like not to be unreasonable, and have to get creative."