By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Bahamasair's chairman yesterday warned the airline will "close down" without an increase in taxpayer subsidies after its top-line was cut by $22m due to Hurricane Dorian and COVID-19.
Tommy Turnquest, speaking after the national flag carrier was ordered to cease commercial flights into the US, told Tribune Business that revenues for the 2020 financial year that just closed at end-June were likely to be down 24 percent year-over-year - from $92m to $70m.
With taxpayers already pumping an eight-figure sum annually into Bahamasair to keep it flying prior to COVID-19, Mr Turnquest said "you don't have to be a rocket scientist" to realise that a further cash call on the Public Treasury beyond the $19m provided in the 2020-2021 budget will be forthcoming.
He added, though, that the government's decision to halt all the carrier's commercial flights into Florida as a means to prevent Bahamians bringing COVID-19 home could actually end up saving the airline money.
Bahamasair's chairman said the airline had been poised to "aggressively" cut back its services into Orlando with effect from yesterday, given that it had been transporting just six passengers both ways in its 60-70 seater ATR planes.
Acknowledging that the prime minister had effectively "made the decision" for Bahamasair, Mr Turnquest said it may "be 2021" when the airline returns to Florida if the state fails to get its COVID-19 outbreak under control before year-end.
He explained that the carrier appeared poised to lose four of the five months it relies upon to minimise Bahamian taxpayer exposure, with the only peak traffic period remaining in 2020 being the November/December period containing the Thanksgiving and Christmas holidays.
"Bahamasair would have a boom for five months, and those five months are what carries Bahamasair for the year," Mr Turnquest said, referring to Easter and the June-August summer period.
"For October, November and December last year, Grand Bahama and Abaco were out of the mix because of Hurricane Dorian. We estimate probably a loss of around $8m as a result of that shortfall. Then we were in lockdown in mid-March with the COVID-19 virus."
Bahamasair previously estimated that it lost $10.5m as a result of its near-three month shutdown, as it was forced to cover staff salaries and other overheads on zero revenue income. Mr Turnquest confirmed that the full consequences of that combined $18.5m hit will be felt in the results for its just-closed 2020 financial year.
"In the financial year ending on June 2019, our revenues were $92m," Mr Turnquest told Tribune Business. "This year it's going to be around $70m." The latest lockdown, coming just three weeks into the airline's new financial year, means the COVID-19 direct impact will also be felt in its 2021 financial results for at least the first quarter.
"Depending in when we're back up, we may get a bump at Thanksgiving and Christmas if the US gets the situation under control," he added. "If they don't it will be 2021." While there have been no discussions with government yet, Mr Turnquest said an increase in the Public Treasury subvention to fill growing financial holes was inevitable if it wanted to keep the national flag carrier in the air.
"There's an increase in subvention or we close down. You don't need to be a rocket scientist to figure that out," he told Tribune Business. "We'd just got started, and the loads were really, really low. For example, last week Tuesday or Wednesday, we took six people to Orlando and brought six people back in a 60-70 seater ATR.
"That's just straight losing money. In the summer months, we would normally go into Orlando three times a day. Sometimes, on a good weekend, we'd squeeze in four flights; the loads were that good going into Orlando in the summer months. You put those current load factors against three to four flights that were just chock-a-block.
"The Florida routes, we really weren't making any money anyway since we restarted because the loads were low," Mr Turnquest continued. "Even to Fort Lauderdale we were around 40-60 persons on a 120-seater aircraft, so we were around 40-50 percent load factors, sometimes 60-70 percent, but very rarely.
"They [the Government] have made the decision for us. We save money by not going there. We've been going in every day to Orlando since July 1, and were going to cut back on that aggressively from today [yesterday]. We were going to cut back to four times a week."
Mr Turnquest added that Bahamasair will also have to contend with the loss of its routes to and from Freeport for the time being, after the Government suspended all domestic aviation into and out of that island to counter the surge in COVID-19 cases on that island.
"That's going to cause some financial strain," he conceded. "We've still got Marsh Harbour and Rock Sound in Eleuthera. The load factors on both those flights have not been bad. We've been running two flights a day into each of those. They're surprisingly better than we thought but it's still a struggle."
Comments
pileit 4 years, 4 months ago
So, will the government finally use this opportunity to do what needs to be done, or will they kick the can down the road for another 5 years? Shut the airline down. Subsidize worthy local airlines for domestic routes, reopen the flag carrier for international flights only, homogeneous fleet, simplified route, supplement tourist travel ourselves as opposed to laying prostrate before Delta.
DDK 4 years, 4 months ago
Bahamasair has been a HUGE drain on The Public Purse for decades, .but without it, a reliable carrier would have to be ready, willing and able to service our archipelago or the Country as we know it would collapse. I do not believe an amalgamation of different companies would cut it. Whether we like it or not, our national flag carrier is under obligation to our citizens to provide inter-island service. It is just a crying shame that our successive governments are so damned inneficient and corrupt. Subsidizing 'worthy' local carriers would just be more of the same with multiple headaches and disasters instead of just the one!
tribanon 4 years, 4 months ago
Killing Bahamasair may be the only good thing the deadly Communist China Virus does for the Bahamian people. Our government should be in the business of regulating airlines and not operating one. The risk and disruption to intra-Bahamas (inter-island) travel should be minimal because the vacuum created by Bahamasair's demise would likely be quickly filled by several competitive and much more efficient private sector operators that require no taxpayer funding. Besides, most of us relish the idea of Tommy T and many other useless souls at Bahamasair no longer being able to suck on the public purse.
bogart 4 years, 4 months ago
Bahamasair allegedly having "boom months" periods making money is netted out at year end figures showing perpetual annual losses in excess appears of 15 million or more. Officials must be not skilled wid running business all dese decades.
At these times the annual repeated easy charitable subvention of money withdrawn annually for Bahamasair will be gouging, ripping out money from other people areas like maintenance and improvments to Medical, Infrastructure-fixing critical bridges, seawalls, roads, BPL, etc and working miracles from less revenues to main services to whole population.
Bloated overstaffed Bahamasair needs to be closed. Govt likely to still lose less money from operating airline AND LESS than 8 figure annual losses Bahamasair repeatedly manages to do and instead give Coupons to reduce travel ticket (coupons can also used to market other accomodations eateries shopping etc) to travellers to certain areas govt and Peoples Committee determines most important.
moncurcool 4 years, 4 months ago
So let it close. How is it WesternAir can survive without government subsidy and Bahamasair wants more subsidy. Maybe the good from this pandemic is it will cost government to streamline and maybe we get to cut the loss making albatross around our necks of Bahamasair.
Economist 4 years, 4 months ago
Shut it down.
Put us out of our missery.
We are a tired people, tired of paying and paying and never seeing any return.
hj 4 years, 4 months ago
Shut it down. Enough with all the corrupt and inneficient government entities
bogart 4 years, 4 months ago
Repeated repeated, repeated legislated by Govt to repeatedly pour tens of millions of Taxpayers money into Bahamasair needs to stop. The Bahamas needs to have Anti Trust Laws, Anti Competition Laws and RICO laws to stop and jail persons who restrict competition of businesses. It is a wrong activity for person(s) to be complicit in activity resulting to be pouring Taxpayers money under the cover of legal govt to restrict, impair, reduce competition profits, damage push them out of business, bancrupt etc., the operators of similar businesses with private sector owners and shareholders like similar airlines, entities etc.
JackArawak 4 years, 4 months ago
Shut it down - and to use a very tired expression the MP's love to use.....''let the chips fall where they may"
stopthehypocrasy 4 years, 4 months ago
FINALLY!! Shut the darn thing down, let private enterprise flourish and pick up the flights. It should have been closed 30 years ago!
Sign in to comment
OpenID