The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Government was yesterday again urged to take a serious look at the Bahamian aviation industry, one senior airline executive telling Tribune Business that continued fee increases could effectively tax local carriers out of business.

Sky Bahamas chief executice, Captain Randy Butler ,commenting on the Nassau Airport Development Company’s (NAD) latest impending fee increases, said domestic airlines remained challenged, citing “predatory prices” underwritten by taxpayer subsidies to Bahamasair.

NAD has announced that effective January 2013, landing fees, terminal fees, aircraft loading bridge fees and aircraft parking fees would increase by 3 per cent respectively.

The Lynden Pindling International Airport (LPIA) operator has projected that its fee increases for 2012 and 2013 will still leave it in a competitive cost position against its regional counterparts, with total airport-related fees 1.5 per cent below the Caribbean average.

“NAD is doing what it has to do. Their numbers are down, I believe,” Captain Butler told Tribune Business.

“NAD is trying to meet certain targets, and I don’t know if they’re considering really what is happening in the domestic market. You have domestic airlines that have at least 600 people employees who could lose their jobs if this kind of thing continues to happen.

“We want the Government to take a look at the sector - not in isolation but as a whole - so we could then sit down and put measures in place that would appropriately deal with the issues that we have.

“We have a lot of money in the sky with this Flight Information Region, where we could get some money to support the industry and you don’t have to tax people out of the industry. There have already been airlines that have been taxed and put out of the airport, or are gone.”

 Captain Butler added: “We are business people. When the fees come we have to pass them on because we can’t compromise when it comes to safety. You have government imposing landing fees, on the Family Islands, security fees.

“You have terminal fees, rent, passengers paying facility fees, and now we are paying a terminal fee that is based on how many seats you have on your aircraft, landing fees and parking fees. In some of the cases the services that we pay for are not being delivered.”

Captain Butler charged that predatory prices underwritten for Bahamasair by taxpayer subsidies were putting privately-owned airline companies at a disadvantage from a cost perspective.

“If you look at the last three years, Bahamasair has not increased their fees but they have gotten more subsidies from the Government,” said Captain Butler.

“Bahamasair kind of sets the fee structure and the other airlines don’t have much choice but to follow. We have to pass it on to the customer and cut our bottom line.

“The government continues to increase its subsidies to Bahamasair, and that’s OK if they could bring all the people, but you are talking about an airline that only has a few aircraft and cannot bring all the people, so you’re impeding he growth of the islands. Predatory practices continue to happen.”