The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedi.net

A Bahamian aviation executive has warned that taxes threaten to "stagnate" this nation's aviation sector, with private domestic carriers "holding on for dear life".

Captain Randy Butler, Sky Bahamas chief executive, told Tribune Business: "We have to look at these taxes. If you look at the domestic travel, it's stagnant because of the cost to just get around to the islands. We need to have a vision for this industry to determine where we are going and what we are trying to build."

Captain Butler pointed to a recent Caribbean Development Bank (CDB) study of the region's aviation sector, titled Air Transport Competitiveness and Connectivity, which identified three areas for reform. One was the reduction of taxes and fees/charges, which will lower airfare costs and boost passenger demand.

The Sky Bahamas chief added: "Every domestic airline is considering what they are doing. The only reason some of them have not gone out of business is because they are holding on for dear life. The Government needs to have a plan. We know what the problems are and we have to do something about it.

"When you look at a lot of these Family Island airports you see the deterioration. We have domestic carriers competing with Bahamasair, which is being subsidised by the Government. We have to decide where we are going with this industry before it's too late. Right now we're basically paying people to come here with these promotions and incentives. If we are able to make the fares reasonable people will come and the Family Islands will grow."

During a panel discussion at the State of the Industry Tourism (SOITC) last week, it was acknowledged that taxes and fees account for up to 50 percent of airline ticket costs in the Caribbean.

Tracy Cooper, Bahamasair's managing director, agreed with comments made by Diane Shurland, Antigua-based legal counsel for fellow regional airline, LIAT, during a panel discussion at the State of the Industry Tourism Conference (SOITC).

Ms Shurland said: "It is near impossible to encourage people to travel and support the tourism industry if you have growing taxes, fees and charges. It is near 50 percent of your ticket costs. Look at the description of your charges and judge for yourself. It makes the industry extremely difficult."

Responding to that point, Mr Cooper said: "At Bahamasair our ticket prices to Miami and Fort Lauderdale are around $300-$350, and out of that $152 is taxes. In some instances, if we are having promotions it's not even a 50/50 thing. We are not actually pairing the price of the ticket or the revenue that comes to Bahamasair; it is actually less than the tax on the ticket."