The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Sky Bahamas has incurred costs worth $4.2m "and counting", it was revealed yesterday, as it continues to battle Bahamian regulators over the rejection of its Air Operator Certificate (AOC).

Captain Randy Butler, the airline's president and chief executive, told Tribune Business he is refusing "to lay down and play dead" after the Bahamas Civil Aviation Authority (BCAA) formally confirmed its decision to deny renewal of the permit that allows it to carry fare-paying passengers.

Revealing that Sky Bahamas continues to exist as a company in name, and on paper, only following the near three-month prohibition on offering commercial flights, Captain Butler confirmed he is now beginning the appeals process in a bid to overturn the regulator's decision.

He described the impact of the BCAA's actions as "heartbreaking" for Sky Bahamas' employees, who had all "gone home", as well as creditors, vendors and partners who were either owed monies or relied upon the airline's continued operations.

Revealing that he had spent $200,000 of his own monies to "pay bills" and reimburse Sky Bahamas employees, Captain Butler said the airline's enforced shutdown had cost "hundreds of thousands of dollars" as well as endangering his own personal reputation.

Again warning that he may have to resort to legal action, Captain Butler's first appeal must go to the Bahamas Civil Aviation Authority's Board, which is chaired by former Central Bank governor, Wendy Craigg.

This move has been triggered by Captain Charles Beneby, the BCAA's director-general, issuing a September 19, 2019, notice giving Sky Bahamas some 14 days - a period that runs out this Thursday - to appeal the regulator's decision not to renew the airline's AOC.

"The Civil Aviation Authority of The Bahamas hereby denies Sky Bahamas application for an Air Operator Certificate, as it has determined in all the considered circumstances and communications between the Authority and the applicant's accountable manager (Captain Butler) and its attorney that, pursuant to schedule 12.025 (b) (1) that Sky Bahamas Airlines is not properly or adequately equipped or able to conduct safe operations in commercial air transport," the notice, signed by Captain Beneby, states.

The exact same language was used by Captain Beneby in explaining why the BCAA had decided not to renew the AOC for Butler's Aviation, another company operated by Captain Butler. The Sky chief, reiterating that both companies had fully complied with all safety and other findings made by the regulator, suggested the notice was issued because the BCAA had run out of reasons to justify the non-renewals.

Describing the situation as "very challenging", Captain Butler said: "We have to go through the system. The goal is the system is supposed to self-correct. If the Board finds there is no cause they'll self-correct. But to self-correct after three months, what's that do for you?

"We would have lost hundreds of thousands of dollars, your reputation is on the line, and we've gone three months down the road and the Board finds no cause. What do you do? Staff have gone home, creditors are calling on you, my partners in the hangar operations are impacted, my US operations are impacted, my insurance is impacted and my group medical insurance impacted.

"Everything has been impacted by a decision, finding that has no merit. I must now sit and wait for the Board to make a decision while lives have been impacted." Captain Butler expressed his "faith" in the "honourable people" on the BCAA's Board, voicing optimism that they would reach a just conclusion.

The BCAA's decision not to renew Sky Bahamas' AOC was based on the section in its schedules that permits it to deny such an application on the basis that "the applicant is not properly or adequately equipped, or is not able to conduct safe operations in commercial air transport".

Vehemently rejecting this reasoning, Captain Butler admitted that Sky Bahamas effectively still exists only on paper or as a name. "We're still a legitimate company," he told Tribune Business, "but our AOC has not been renewed.

"Man, essentially what I can say to you is: Everyone's gone home. There's no more work. There's no more flights. We've not operated since July 8. I've spent about $200,000 paying bills and reimbursing people at Sky Bahamas.

"If the AOC is renewed it will take us a little bit to get going with some fresh capital in there. I haven't gone into how much because this may become a legal matter."

Captain Butler added that Sky Bahamas' remaining aircraft, which are all leased, are "still there but the owners are ready for them". While no lease termination notices have yet been received, he said the owners could only wait so long if the airline is not flying.

"It's heartbreaking that so many lives have been impacted in so many ways," he told this newspaper, "but I;m not ready to lay down and play dead. We will fight this to the end. It will not only benefit Sky Bahamas but many other operators so that this does not happen again.

"I've been in this for a long time. I've been a regulator, I've been an operator. Aviation is very important to this country, and the world is looking at The Bahamas because of Dorian and everything else."

Asked how much his battle with the BCAA has cost, Captain Butler replied: "So far we're north of $4.2m and the costs have not stopped. It's continuing." Reiterating that Sky Bahamas has "complied with any and all inspections", he added that there were no legal issues outstanding while any and all adverse findings had been dealt with "way before" the AOC renewal date.

"We're going to go through all the historical facts and the requirements in law and regulations, and how we met them and were in compliance with them at all times," he told Tribune Business of Sky Bahamas' approach to the Board appeal.

However, Dionisio D'Aguilar, minister of tourism and aviation, and others have suggested that Sky Bahamas' problems have been of its own making long before the AOC issue came into play, and that it was in financial difficulties long beforehand

They have pointed to the action taken by Nassau Airport Development Company (NAD), which has been in dispute with Sky Bahamas over a long-standing six-figure sum in passenger facility user fees and security fees allegedly owed by the airline.

It emerged last year that the airline owed NAD some $621,691 as at January 9, 2018, although this was cut to $454,015 by June 29 last year. NAD at the time had threatened to terminate the airline's licence to operate at LPIA over the arrears.

Captain Randy Butler downplayed the issue when it surfaced last year. He recently told Tribune Business that the carrier had paid some $1m to NAD over the past year in an effort to catch up, blaming some arrears in free flights provided to political party members in the run-up to the 2017 general election.

However, NAD has now obtained a Supreme Court Order, dated July 23, where Justice Diane Stewart required Sky Bahamas to "cease all operations at the Lynden Pindling International Airport (LPIA) and vacate property leased to it" by NAD within 14 days. However, NAD subsequently gave Sky Bahamas some 90 days to vacate in an August 9 letter.