The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamasair needs an additional $11.2 million taxpayer subsidy to get it through the 2012-2013 fiscal year, the national flag carrier having seen its half-year net loss increase by 19.4 per cent year-over-year.

Philip Davis, the Deputy Prime Minister, said the increase in net losses for the July-December period, which rose from $9.8 million in 2011 to $11.7 million last year, resulted mainly from “challenges associated with an aged fleet of aircraft along with increases in airport and fuel charges”.

Addressing the House of Assembly during the Mid-Year Budget debate, he added that Bahamasair had generated $37.4 million in revenues for the first half of its 2012-2013 financial year. This sum, though, was dwarfed by $49.1 million in operating expenses.

And Mr Davis revealed that Bahamasair’s total subsidy for the 2012-2013 financial year was now likely to exceed the sum the airline originally sought in the May Budget.

“During the 2012-2013 Budget preparation exercise, Bahamasair had requested $28 million in subvention funding and $18.6 million was approved,” the Deputy Prime Minister said.

“The Budget re-forecast for Bahamasair is under review, as it is estimated that additional subvention funding in the amount of $11.2 million will be needed to cover a shortfall of $5.5 million from the previous year’s budget, a shortfall of $3.9 million for operations in the current fiscal year, along with personal emolument increases resulting from the recent grant of increments to Bahamasair’s employees in accordance with the terms of agreements with the relevant unions.”

On a more positive note, Mr Davis said the International Air Transport Association’s (IATA) September 2012 biennial safety audit of Bahamasair’s flight operations, maintenance and customer services “did not reveal any major negative findings. IATA recertification has therefore been issued through December 2014”.

He added that a plan to change Bahamasair’s business model had been presented by the airline’s management to his Ministry.