The Tribune

By NEIL HARTNELL Tribune Business Editor SKY Bahamas expects to start seeing a return on its $270,000 investment in building its Marsh Harbour-West Palm Beach route in three months' time, telling Tribune Business it cost Bahamian-owned airlines twice as much to fly to the US than for foreign carriers to come here. Arguing that the competitiveness of Bahamian carriers was being impacted by failure to enforce regulations and an inconsistent aviation policy, Captain Randy Butler said American Airlines' Chapter 11 bankruptcy protection filing should be a "wake-up call" for the Government to create a 'level playing field' with foreign carriers. Confirming that Sky Bahamas was looking "at some other routes" after its latest service took off, Captain Butler told Tribune Business: "Just to get started from Marsh Harbour-West Palm Beach, the start-up costs are $64,000. "We're estimating that to build that route we will be at a 35-40 per cent load. We project that to build that route, with the investment in people, fuel and fees, for the next three months we're looking at an investment of $270,000 to build that. Describing the upfront costs as an "investment", rather than an expense, the Sky Bahamas president and chief executive added: "We believe that in 90 days, three months' time, we will get a good turn on that money, starting in March." Sky Bahamas' first flight from Marsh Harbour to West Palm Beach will take place this Saturday, and Captain Butler said the airline hoped to have the route "fully run" by December 16. However, lack of certainty when it came to enforcement of existing Bahamian civil aviation rules and regulations, and an inconsistent government policy, were taking their toll on Bahamian-owned airlines. "The Government's policy and actions continue to change, so your business model is not stable, and that leaves investors and bankers very nervous," Captain Butler told Tribune Business. "Every time you look around something has changed. Government policy is not stable. You read it in the papers every day." He contrasted the US approach to aviation regulatory enforcement with that of the Bahamas, pointing to the $25,000 bond Sky Bahamas had to pay upfront before it was permitted to fly into West Palm Beach. This was done to guarantee that any debts the carrier might leave at the airport there would be paid. Yet in the Bahamas, Captain Butler said bonds were never demanded of foreign airlines flying into this nation. "It's twice as expensive for us to operate in the US than it is for a foreign carrier to come into the Bahamas, and that puts you at a competitive disadvantage," he told Tribune Business. "There's no bonding requirement to come here. The regulations in the US are being enforced. The regulations here are not being enforced. "Then the insurance requirements to go there are much more than the insurance requirements to come here. I would find that in certain cases, it costs us 35-40 per cent more, because you're flying into the US and the insurers believe you have larger exposure because of suing and the litigious environment there." Captain Butler alleged that "more than 90 per cent of the airlines coming to the Bahamas" are not in compliance with this nation's Civil Aviation Safety Regulations, requiring foreign carriers to have operational specifications approved by Bahamian regulators. He also contrasted the US's insistence that all foreign carriers have a registered representative in that country with the Bahamian approach, which did not enforce such a stipulation. Suggesting that American Airlines' Chapter 11 bankruptcy filing showed the Government that it could not "put its eggs in one basket" in terms of relying on foreign carriers for the bulk of airlift, Captain Butler urged the administration to provide Bahamian-owned airlines with similar concessions. "The impact of American Airlines is one the things to wake up government to empower and assist airlines like Sky Bahamas, so we can bring some of the tourist business and fly from the US east coast stretch to the Bahamas," he told Tribune Business. "This is also an opportunity for the Government to take a serious look at Bahamasair. Take a look at the mission of Bahamasair and give them the resources. Bahamasair should be operating in the cities serviced by Vision Airlines." Among the subsidies received by foreign airlines, Captain Butler said, were fuel price concessions, preferential airport access "in terms of slots and schedule", and the ability to start service into the Bahamas without obtaining the required Civil Aviation Department certification.