The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamasair is aiming to "take advantage of the COVID-19 crisis" to open up more Latin American tourism markets via development of a Mexico City route, its chairman revealed yesterday.

Tommy Turnquest told Tribune Business the national flag carrier's recent leasing of a second Boeing 737-700 jet had given it the fleet capability to start re-examining a potential route that the Ministry of Tourism first asked it to explore some 18 months ago prior to the pandemic.

"We're trying to do as much as we can to take advantage of the crises and find some opportunities," he said of the cash-strapped airline. "One of the things we're excited about is that the Ministry of Tourism, through research of the Immigration cards - they mine data from those cards - believes there is a very profitable market coming out of Latin America through Mexico City.

"We couldn't go to Mexico City because of the high altitude with the 727-500s we had. When we got the 737-700 aircraft we could make the trek non-stop. The challenge, though, was to begin to explore that market with just one aircraft. If we had maintenance issues, had problems, there was no redundancy, no back-up.

"Now we have the second 737-700, we're able to look at long haul markets like that which we're going to open up working with the Ministry of Tourism. They had spoken to us about that [Mexico City] 18 months ago, but we couldn't serve that with the aircraft we had. Now we have the aircraft we're looking at that again."

Mr Turnquest said Bahamasair was also exploring other US markets that could be opened up as tourism gateways to The Bahamas. "The legacy carriers go into Dallas, Houston, the greater New York area, Charlotte and so on," he added. "We have to justify our existence, and some of these opportunities are why we still exist.

"We can go into Nashville, Tennessee; Cleveland, Ohio, and open up new markets. We're quite excited in terms of looking at that as the tourism industry begins to rebound, and we hope to be part of that. We've been looking at opportunities, and sharpening our pencil in terms of costs and structure. We've been bleeding money over the months."

Many observers would argue that Bahamasair was "bleeding money" throughout its history, and long before COVID-19 arrived, although the pandemic has worsened its challenges with the airline earning zero revenue to cover monthly costs of around $7m in several months since March 2020.

However, while its detractors will question why Bahamasair is seeking to expand given the losses inflicted annually on taxpayers, Mr Turnquest yesterday pointed out that the national flag carrier is mandated by the Government to act as a "loss leader" in developing virgin overseas tourism markets to the point where they become profitable and can be taken over by other commercial carriers.

He added that it also has to carry the burden of providing transportation links and connectivity on unprofitable Family Island routes that privately-owned airlines will likely ignore, thereby deserving a subsidy that will now far exceed the $19m allocated in the 2020-2021 Budget.

"The answer to your question is we cannot survive without it," Mr Turnquest said of Bahamasair's annual taxpayer subsidy. "Everyone in the company realises the serious nature of the business, or precarious nature of the business.

"Everyone realises we have to put our best foot forward and improve on customer service, improve on reliability of the schedule. All of these things work if we work together. We've looked at the operating deficiencies here and shared them company-wide, talking to everyone. Before it was only the top talking to each other, but now we have more people engaged in the business we're in. We think that's a very positive thing coming out of this."

Mr Turnquest, though, also argued that Bahamian taxpayers are "paying for" the decision by the former Christie government not to provide a government guarantee on the nine-figure loan taken out to purchase the airline's ATR fleet in 2016.

The absence of such a guarantee, he added, meant the interest rate attached to the loan was higher than if the Government had backed it. And with Bahamasair's cash flow and revenues having dried up due to COVID-19, taxpayers are having to cover the monthly $5-$6m repayments payments.