The Tribune

• Flying Ambassador says $28 fee proposal ‘flawed’

• Warns charge ‘certainly won’t be well received’

• Others slam move as ‘discriminatory, drastic’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An aviation industry executive yesterday warned the Nassau Airport Development Company’s (NAD) plan to levy a $28 fee on all arriving international private plane passengers was “a slippery slope”.

Rick Gardner, director of CST Flight Services, which provides flight co-ordination and trip support services to the private aviation industry throughout the Caribbean and Latin America, told Tribune Business that the airport operator’s proposal was akin to “death by a thousand cuts”.

A member of The Bahamas Civil Aviation Council as well as a Bahamas Flying Ambassador, he argued that general aviation or private plane traffic was often “singled out as easy prey” for fee increases whenever airports needed to

raise money.

While conceding that he was still assessing NAD’s proposals, Mr Gardner said he feared the benchmarking exercise employed by the Lynden Pindling International Airport (LPIA) operator to justify the $28 (VAT inclusive) fee was “flawed for a number of reasons” including the aircraft chosen, although he declined to go into further details.

While NAD has justified the fee on the basis that private aviation passengers need to contribute their fair share to LPIA’s upgrades, and that it is needed to help finance $30m in improvements to pavements, lighting and other infrastructure, Mr Gardner said these persons typically used Odyssey and Jet Aviation’s facilities rather than the airport’s commercial passenger terminals.

And he pointed out that the greater amount of “wear and tear” inflicted on the LPIA’s runways was likely to come from heavier, faster commercial airlines rather than private jets. Mr Gardner said he planned to share his views on the proposed fee increase with the US Aviation Owners and Pilots Association, the largest grouping of its kind, for which he acts as their Bahamas representative.

And he is not alone. Another prominent figure in Bahamian aviation, speaking on condition of anonymity, described the NAD proposal as “discriminatory against smaller planes and general aviation”. They also branded it as “drastic and baseless”.

Mr Gardner, meanwhile, told Tribune Business: “I saw that last night. I think the analysis is flawed for a number of reasons. I saw a few things in there that are fundamentally incorrect, in my opinion, and I was going to prepare a response to that pointing out where I see the discrepancies in what was presented. 

“It’s death by 1,000 cuts. Any time you raise fees, nobody is happy. I need more time to review it in detail. Will it affect general aviation? Any time you raise fees it has an effect. Whether it’s a fraction of one percent, one hundredth of one percent or 10 percent, I can’t tell you, but it certainly won’t be well received. Any time you raise fees, it’s not good.

“I’m sure they’re [NAD] hurting for money because of COVID. They don’t have the same commercial passenger revenue. General aviation is always an attractive target. It is always an easy prey. When you need money you go after them.”

Private aviation and pilots are one of the tourism niches that rebounded most swiftly from the COVID-19 pandemic. With a customer base consisting largely of higher net worth individuals who spend more money in The Bahamas, the ability of private planes to visit Family Islands where there are no commercial aviation facilities also helps to spread the wealth.

While some observers will likely argue that such passengers will easily be able to afford and absorb such a fee, Mr Gardner said: “What people fail to realise, and I’ve seen this process in many, many states, is the economic impact of general aviation passengers is orders of magnitude greater than commercial airline passengers.

“If you are interested in the economic impact of tourism you have to look at things differently as opposed to trying to make the numbers work for a private airport operator. If you make it less appealing for them to come, the economic downside is disproportionate.

“The country is an archipelago. The airlines cannot service all the airports. General aviation is a perfect fit for The Bahamas,” Mr Gardner added, “because it brings its own transportation. It’s not dependent on the commercial airlines to provide lift to Deadman’s Cay, Sandyport and New Bight, all the destinations that don’t have a commercial airport.

“All they need is a nice runway. They don’t care about a nice terminal, duty free shopping and retail. All they [private plane passengers] want to do is get from the plane to the seat of the taxi in the quickest and most expedient manner possible.”

And Mr Gardner, citing the example of Costa Rica, said: “When you try to single out general aviation as a means of subsidising, whatever you want to call it, you have to be careful because I have previously seen general aviation traffic to destinations where they raised fees drop-off. It’s a slippery slope.

“I am worried about the country. As a Bahamian flying ambassador I worry about driving tourism to The Bahamas so the restaurant owner, the taxi driver and the fishing boat captain.... the people that live off this tourism enjoy the economic benefits. I’ve seen this approach in too many countries and I’m worried.”

NAD, in justifying the new fee, said: “LPIA typically has a mix of both commercial traffic (approximately 60 percent of landings) and general aviation or private aircraft traffic (approximately 40 percent of landings) operating from the airport.

“Notwithstanding the significant percentage of general aviation landings, revenue attributable to all general aviation operations at the airport accounted for an average of only 11 percent of total aeronautical revenue respectively in financial year 2018, 2019 and 2020 (excluding NAD’s passenger facilities charge).

“General aviation’s average contribution inclusive of the passenger facility charge was 3.29 percent for financial year 2018, 2019 and 2020,” the airport operator added. “The majority of aeronautical revenue comes from commercial passenger fees (61 percent) and commercial landing fees (24 percent).

“Presently, no passenger fees are assessed to general aviation (non-commercial) passengers. Passenger fees typically go toward capital and other airport improvements and to support the airport’s debt service obligations.

“With the implementation of a general aviation airport improvement fee, general aviation operations will begin to contribute a fairer share of the revenue required for the capital improvements, maintenance and debt servicing of the airport.”

Turning to how the fee income generated will be used, NAD added: “The proposed AIF fee will be used to assist the funding of planned investments at the airport. At this time, it is anticipated that some $30mwill need to be invested in airside infrastructure improvements inclusive of pavement surfaces and lighting among other needs.

“Asphalt has a life of 20 years and as such fees implemented should cover these capital costs in part over that period. The increase in general aviation revenues is meant to fund needed major construction projects to better serve general aviation passengers and reduce their delay impact on commercial flights and passengers.”