The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

TOURISM Minister Obie Wilchcombe said he was extremely concerned that the Bahamas might lose tourism business due to US airline cutbacks, given that this nation was still trying to rebound to its 1.8 million pre-recession stopover numbers.

“My concern is that if the airlines are reacting to the point where there is consideration for withdrawal, then my concerns are extreme, because we have to make sure that we are building our business and not losing any business that we do have now,” Mr Wilchcombe said of the aviation industry’s response to the 2013-2014 Budget tax increases.

“We are rebuilding, we are in a renaissance. We are in a process of recovery, and so to ensure that we can get back to the numbers we had pre-recession, we have to make sure we strengthen our relationship with the airline industry, continue our dialogue for the opening of new routes and, at the same time, understand that there is a balance that has to be maintained between the high costs of running the airline, on one hand, and and the high costs of travelling.

“If we don’t have the balance, then I think it’s going to create a problem for the industry. Any additional taxes that they claim might have that effectual damage to their pricing and servicing, I think we have to be very concerned about that.”

Airlines representing 90 per cent of US airlift into the Bahamas have warned they may cut their services due to the Budget’s tax increases.

A June 28, 2013, letter to Customs Comptroller Charles Turner from the Airlines for America coalition, which represents key operators such as Jet Blue, Delta and American Airlines, warned that its members “may be forced to reconsider their service levels to the Bahamas”.

The letter, which has been obtained by Tribune Business, expressed particular unhappiness at the late notice provided by Customs to the airline industry of the tax /fee increases.

Keith Glatz, Airlines for America’s (A4A) vice-president of international affairs, warned Mr Turner in no uncertain terms that the new charges threatened his members’ “exceedingly slim profit margins” and could “undermine the desire to stimulate the Bahamas’ economy”.

Mr Wilchcombe responded: “If the airlines decide that they are angered and cannot sustain the cost, then obviously it is going to hurt us tremendously, so we have to find that middle ground to ensure that we don’t have the negatives being experienced by the airlines while, at the same time, we have to make sure that we continue to run the country.

“We are going to sit and talk with the airlines because we were up to 1.8 million tourists, and air arrivals were still under the 1.3 million mark in the last year. We are trying to get back to 1.8 million and beyond to ensure that we have the air transport inventory together with the hotel inventory, and that has to have a happy meeting place.”

With 400,000 extra airline seats needed to supplement Baha Mar when it becomes operational in 2015, Mr Wilchcombe said it was important to maintain a good relationship with the airlines.

“We have some announcements to make very soon. We believe that we have secured additional airlift from some of the major carriers, and new airlift. In the next few days or so I intend to have some dialogue about that,” said Mr Wilchcombe.