The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

BAHAMASAIR expects to fully take over servicing Vision Airlines' Grand Bahama routes in December 2012 as part of a two-phased arrangement, the airline's managing director told Tribune Business yesterday, adding that the state-owned carrier was holding its own on domestic routes with load factors averaging in the high 60 per cents.

Henry Woods told Tribune Business of the Vision arrangement: "It's a two phased project. The first phase is a wet lease arrangement, whereby the operation will commence as Bahamasair with another operator's aircraft and crew.

"We hope to take it over fully ourselves, but it will be a Bahamasair operation. All ticket sales and reservations will be through our system. It will be a Bahamasair brand programme. In December of this year, we hope to take it over fully with our own aircraft and crew."

He added: Everything is set. Right now, Vision is providing equipment with 150 seats. Our aircraft will be utilising 120 seats."

Vision Airlines began flights to Grand Bahama last November 11, providing direct non-stop service from five US cities. Its competitive low fares were expected to bring an additional 100,000 seats annually to Grand Bahama in its first phase of operations.

The carrier did not perform up to expectations, with tourism executives telling Tribune Business that the airline's service to Grand Bahama was operating at about 30 per cent load factors - far below the 65 per cent expectation.

Bahamasair will take over Vision's routes which include Richmond, Virginia; Raleigh/Durham North Carolina and Baltimore, Maryland. The new routes come into effect on May 17 from Baltimore, and May 18 from Richmond, Raleigh and Durham.

Domestically, Mr Woods said Bahamasair was holding its own with average load factors in the high 60 per cents. He told Tribune Business: "Domestically, we are holding our own. Right now, Grand Bahama, Abaco, Exuma, Long Island, Inagua are looking very well for us. Average load factors for those destinations is in the high 60 per cents.

"Things are going pretty good otherwise. We are holding very firm with the on-time performance, and customer service has continued to improve significantly. We are very optimistic about the future of Bahamasair in terms of the efficiency.

"Right now, things are average, but we anticipate that once we get through May there will be a big spike. The summer is also a peak season, so once we get to June we will be into the very high load factors because of vacations and that sort of thing, so from the third week of June to first week in September we are looking to a very robust period."

In a February 2012 interview with Tribune Business, Bahamasair's chairman said that despite being on target for a $21 million loss in its 2011-2012 financial year, the airline is trending in the right direction and eventually "may be able to get near break even if we can get all the pieces to fit".

J Barrie Farrington said the national flag carrier was currently on track to deliver operating results for the 12 months to June 30, 2012, that are "a little bit better than expected", despite being hit with a significant year-over-year increase in fuel prices and other key cost items.

Acknowledging the continuing financial challenges facing Bahamasair, Mr Farrington said the situation was summed up by the fact that its three main cost line items - aviation fuel, staff payroll and aircraft maintenance - collectively accounted for a sum equal to 86.5 per cent of top-line revenues for its 2010-2011 financial year.

That had increased from a 75 per cent ratio just two years earlier, and Mr Farrington admitted he was "not happy" that the national flag carrier was continuing to rely heavily on government subsidies, thus representing an annual drain on Bahamian taxpayers.

And he told Tribune Business that Bahamasair had warned the three trade unions representing its staff, all of whom are negotiating new industrial agreements with the 100 per cent state-owned carrier, not to expect "any improvements, certainly sizeable improvements" to existing wage and benefits packages.