The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Government has not looked at slashing Bahamasair's 600-strong staff despite the airline's increasing reliance on taxpayers to cover its $3.5m monthly payroll, a Cabinet minister said yesterday.

Dionisio D’Aguilar, minister of tourism and aviation, speaking outside the Cabinet Office, said: “Every airline in the world is reeling from a reduction in revenue. In fact, the Government has a number of agencies that get most of their revenue from user fees.

"Even in the aviation sector you have NAD (Nassau Airport Development Company), you have Nassau Flight Services, you have the Airport Authority and you have Bahamasair. And then, outside of the aviation sector, you have BPL (Bahamas Power and Light) and other public corporations that have been significantly impacted by the fact people aren’t travelling and they don’t have any employment.

"All of these agencies are impacted by the fact that travel has been significantly reduced, and the Government is exploring options on when and how to restart and relaunch Bahamasair, but understand that even in the United States there has been a substantial decrease in the amount of service, and vast amounts of people have exited the [aviation] business," Mr D'Aguilar continued.

"So it’s very difficult all around and concerning. All of those agencies around government that rely on user fees for the majority of their revenue used to get a tiny government subvention to top it up or to cover some losses. But, in this particular instance, we’re being hit in all areas by these corporations that generate most of their revenue from user fees.”

Mr D’Aguilar said Bahamasair is “absolutely” struggling to make its employee payroll because it has virtually no revenue coming in to support its costs. Its international routes remain suspended, which has forced the airline to rely on a domestic market that has been made even thinner by the 14-day mandatory quarantine imposed on travellers coming from the main hub of New Providence.

“They are having to rely almost exclusively on the Government to subsidise their weekly payments," the minister added. "So you can see it is not flying, or it has very little business, and there is just no way that it can support the fixed costs of that airline, which are very, very substantial.”

Mr D’Aguilar, meanwhile, said the effort to monetise Bahamian airspace by levying overflight fees on all aviation traffic passing through it is “going according to plan".

He added: "When you pull the trigger on how you are going to bill, how it is going to work, there is a six-month consultation period where you speak to all of the players in the market to advise them on what you are intending to do. So, it’s a little more complex here because even though we own our airspace, we have managers of that airspace that are not Bahamian.

"The Americans manage 75 percent of our airspace, and the Cubans manage 25 percent of our airspace, and what was happening was persons were paying the managers directly. So what we’re trying to do is say, no, we own it, it is our building, it is our space, you pay us and then we will deal with them.

"We had to come up with a plan," Mr D'Aguilar said. "We had to come up with a pricing strategy; how to charge people to go over our airspace, into our airspace from an international destination and domestic travel, and how to address all of those three different types of travel through our airspace.

"We hired a consulting firm. We got all of that straight and now we are out in the market advising people of our plan and our strategy, and we will see how it takes us, but certainly in the first quarter of next year we are hoping to introduce it.”