The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Nassau Airport Development Company’s (NAD) net loss rose more than eight-fold to $37.396m for the year to end-June 2021, exposing the full extent of COVID’s devastating travel impact.

The Lynden Pindling International Airport (LPIA) operator, unveiling its 2021 annual report, saw the ‘red ink’ soar from just $4.449m the previous year which only suffered a hit from the global pandemic in its final three months.

NAD’s total operating revenue plunged 63.4 percent year-over-year, declining from $80.69m for the 12 months to end-June 2020 (itself a much-reduced figure) to just $29.559m this time around. Income from the passenger facility fee, which is key to servicing NAD’s $345m long-term debt, fell by 72.5 percent or more than $30m to just $12.516m year-over-year,.

The significant decline, stemming from border closures, lockdowns and other restrictions that either halted or made international and domestic air travel extremely difficult, helped drive NAD’s total aeronautical revenues to a near 70 percent decline, falling from $64.295m in 2020 to just $19.909m last year.

Total commercial operations revenue also fell, albeit by slightly less, suffering a 41.2 percent decline to $9.65m compared to $16.395m the year before. While the various COVID-related closures and restrictions saw NAD’s operating expenses fall by nearly 60 percent, to $12.162m as opposed to $29.99m, operating income finished down 65.7 percent for the year at $17.397m.

Walter Wells, who has since stepped down as NAD chairman following the recent general election, wrote in the annual report that the airport operator had endured an up-and-down year that was dictated by protocols and measures to mitigate COVID-19’s spread.

Recalling the initial tourism relaunch, which coincided with the start of NAD’s financial year on July 1, he wrote: “We saw a soft rebound in overall numbers in July 2020 with a total of 30,176 passengers travelling through our facilities.

“This amount doubled the total passengers processed between April to June of 2020. However, the numbers were still down 85 percent from the same period in fiscal year 2019. During the previous peak summer travel period, LPIA processed more than 200,000 in July 2019.”

The Bahamas subsequently closed its borders again as a result of the COVID ‘second wave’, and NAD’s passenger numbers were “down more than 90 percent year-over-year” heading into its second quarter, which contains the October-December period including Thanksgiving and Christmas.

“The pent-up demand by passengers in our traditional markets and amended travel protocols contributed to a slight bump in traffic in the second quarter. A total of 53,020 travellers were processed at LPIA between October and December 2020 compared to more than 450,000 travellers for the same period in 2019,” Mr Wells added.

NAD then received a further boost from the Royal Caribbean and Crystal Cruises home porting in Nassau. “In June 2021, LPIA passenger numbers topped 100,000 for the first time since the onset of the global pandemic,” he said.

“By the end of the fiscal period, our industry saw some signs of recovery. Seat capacity grew from the third quarter to the fourth quarter, up 36 percent. In addition to all existing airline partners returning to service during the fiscal period, LPIA welcomed new service by Frontier Airlines in June 2021. Our tourism partners also announced plans for Virgin Airways to commence new service to London in the fall of 2021.”

Vernice Walkine, NAD’s president and chief executive, revealed that the airport operator had installed more than 250 protective COVID barriers where passengers and staff interacted in a bid to keep The Bahamas’ major gateway as safe as possible.

“The Ministry of Tourism & Aviation worked directly with cruise lines to facilitate home porting from Nassau/ Paradise Island, with the first passengers scheduled to arrive in June 2021,” she added.

“We seized the opportunity and, in the first month, passenger movement at LPIA was up more than 620 percent year-over-year from June 2020. We also recovered more than 50 percent of the traffic seen in June 2019.”

NAD staff had to work reduced periods, and at lower pay, during the height of the COVID-19 pandemic and associated restrictions. “With mounting uncertainty in the industry and drastically reduced revenue for a prolonged period, we found ourselves in a tenuous financial position,” Ms Walkine wrote.

“During this time we called on our team members, asking them to make tremendous personal and financial sacrifices as the company navigated its way through the pandemic. As an executive management team, we made it a point to have one-on-one conversations to check-in with team members, thanking them personally for their commitment to this airport and to what we have built here at NAD.”

NAD’s financial statements show it twice took advantage of the Government’s tax deferral and credit initiative to support its payroll, obtaining a $300,000 non-reimbursable VAT credit for both its 2020 and 2021 financial years. The first was spread over the April to June period, at $100,000 per month, with the second structured similarly over the July to September quarter.

The airport operator was also able to reverse $2.8m in previously recorded loss provisions on its accounts receivables after the Government paid down its $10m debt by $9.1m via two payments, one worth $4.5m and other some $4.6m. They were paid within a week of each other, on October 13 and October 2020, respectively.